CPIM Practice Exam

Why would a company choose air transport over water transport despite higher costs?

1. Air travel has a lower environmental impact.

2. Air transport allows for better product tracking.

3. Air shipping provides quicker delivery, reducing safety stock needs.

4. Air transport allows shipping larger volumes.

The correct answer is: Air shipping provides quicker delivery, reducing safety stock needs.

Choosing air transport over water transport primarily for quicker delivery is a strategic decision many companies make to enhance their supply chain efficiency. Speed is a critical factor in today’s fast-paced business environment, especially for perishable goods, high-demand items, or when responding to sudden market changes. Air transport significantly reduces lead times, allowing businesses to replenish inventory more frequently and respond rapidly to customer demand without the need for high levels of safety stock. By reducing the time products spend in transit, companies can better manage their inventory levels, lowering carrying costs and minimizing potential losses due to obsolescence or spoilage. This efficiency translates to improved cash flow and increased customer satisfaction, as end-users receive their orders more quickly. While air transport may indeed have a higher environmental impact compared to other forms of transport, and better product tracking is typically a benefit of modern logistics technology, the primary driver for using air transport remains the swift delivery that it provides, enabling companies to streamline their operations effectively.