Certified in Logistics, Transportation and Distribution (CLTD) 2025 – 400 Free Practice Questions to Pass the Exam

Locating a manufacturing facility halfway between two ports is an effective strategy for an organization focused on competing on cost. This approach minimizes transportation costs and transit times, enabling efficient distribution of goods. By situating the facility strategically, the company can take advantage of lower shipping rates and reduced logistical complexities, directly impacting the overall cost structure.

This strategy allows for improved supply chain efficiency, as the organization can optimize both inbound and outbound logistics. By reducing transportation expenses, the company can maintain lower overall costs, which is essential for a cost-competitive strategy.

In contrast, outsourcing all operations may introduce complexities and hidden costs that could undermine cost competitiveness. Heavy investment in advertising is typically aligned with differentiation strategies rather than cost leadership, as it focuses on creating brand value rather than cost efficiency. Relying solely on local suppliers may limit sourcing flexibility or increase procurement costs due to a potentially smaller local supplier base, which conflicts with the goal of minimizing expenses.