Which of the following indicators is most appropriate to use as a measure of supply chain utilization?

Which of the following indicators is most appropriate to use as a measure of supply chain utilization?

A. Production equipment productivity

B. Net asset turnover

C. Value-added productivity per employee

D. Upside flexibility

View Answer

Answer: B

Explanation:

Context: Measuring supply chain utilization involves understanding how effectively resources are

used in the supply chain.

Options Breakdown:

A. Production equipment productivity: This measures the efficiency of production equipment but not overall supply chain utilization.

B. Net asset turnover: This ratio measures how efficiently a company uses its assets to generate sales, reflecting overall supply chain utilization.

C. Value-added productivity per employee: This focuses on employee productivity rather than supply chain utilization.

D. Upside flexibility: This measures the ability to increase production when needed but does not reflect utilization.

Correct Answer Justification: Net asset turnover is an appropriate indicator of supply chain utilization as it reflects the efficiency of asset use in generating revenue.

Reference: Financial performance metrics in supply chain management Textbooks on supply chain efficiency and utilization