Which of the following industries typically has the highest supply chain cost as a percentage of sales?

• A. Grocery retail
• B. Financial services
• C. Software development
• D. Luxury automobile manufacturing

Answer: (A)

Verified step by step guidance

1. Step 1: Understand what 'supply chain cost as a percentage of sales' means. It refers to the total costs involved in producing and delivering a product or service, divided by the total sales revenue, expressed as a percentage. This includes costs like procurement, production, transportation, warehousing, and distribution.
2. Step 2: Analyze the nature of each industry listed. Grocery retail involves physical goods that are perishable, require extensive logistics, storage, and frequent restocking, which typically leads to high supply chain costs.
3. Step 3: Consider financial services and software development. These industries are service-based with minimal physical goods, so their supply chain costs (like infrastructure and technology) are generally lower relative to sales.
4. Step 4: Evaluate luxury automobile manufacturing. While it involves complex production and supply chains, the high price of the product means supply chain costs as a percentage of sales tend to be lower compared to grocery retail.
5. Step 5: Conclude that grocery retail usually has the highest supply chain cost as a percentage of sales due to the nature of its products and logistics requirements.