A company redesigns its network so that Plant 1 and Plant 2 can each produce both Product A and Product B instead of being dedicated to only one product each. At the same time, demand for A and B tends to rise and fall together because both are driven by the same seasonal promotion. Which statement is most consistent with the lecture?

Question

Accepted Answer

The flexible network will still mitigate disruptive risk, but its benefit for recurrent demand risk is limited because that benefit depends on demands being uncorrelated or negatively correlated

Answer

The flexible network cannot mitigate disruptive risk, because dual sourcing only works with decentralized inventory

Answer

The flexible network will fully eliminate recurrent risk, because total capacity stays the same

Answer

The flexible network is less resilient than the dedicated network, because flexibility only helps when one plant fails permanently

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A company redesigns its network so that Plant 1 and Plant 2 can each produce bot...

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