What best describes the role of a distribution network in meeting service levels?

• A. To configure facilities and the flow of goods to meet service levels at minimum cost
• B. To maximize number of facilities regardless of service
• C. To optimize only plant locations
• D. To increase lead times intentionally

Answer: (A)

The distribution network is designed to position facilities and control how goods flow through them so customer service targets—like product availability, on-time delivery, and short lead times—are met at the lowest total cost. This means deciding how many and where facilities should be, how large they are, and how inventory moves from plants to distribution centers to customers, including transportation modes, routing, and inventory policies. The goal is to balance responsiveness (speed and reliability) with efficiency (cost control), since adding facilities can improve service but raise fixed costs, while consolidating can cut costs but may degrade service. This integrated approach best describes shaping both the locations and the movement of goods to achieve service levels at minimum cost. The other options fall short because they either focus only on plant locations, or try to maximize facilities without regard to cost, or seek to extend lead times, which would harm service levels.