Which of the following situations is an example of postponement?

Which of the following situations is an example of postponement?
A . Shipments are broken down into small groups for reshipment.
B . Shipments are consolidated immediately for reshipment.
C . Production begins after a customer order is received.
D . Partially assembled goods are assembled at a later stage.

View Answer

Answer: D

Explanation:

Postponement refers to delaying the final assembly or customization of a product until customer orders are received. This strategy allows companies to be more responsive to specific customer demands while reducing inventory costs and risks associated with finished goods. By keeping goods in a partially assembled state and completing the assembly later, companies can quickly adapt to changes in demand and provide customized products without holding large amounts of finished goods inventory.

Reference: Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2012). Supply Chain Logistics Management. McGraw-Hill. van Hoek, R. I. (2001). The rediscovery of postponement: a literature review and directions for research. Journal of Operations Management, 19(2), 161-184.