The goal of SCM is to increase customer service by increasing inventory and reducing costs.

• A. True
• B. False
• C. Not sure
• D. Only in some industries

Answer: (B)

The main idea is that SCM aims to balance service levels with total cost across the supply chain. Simply increasing inventory tends to raise carrying costs, tie up capital, and raise the chance of obsolescence, which doesn’t automatically improve service. True service improvements come from having the right inventory in the right place at the right time, achieved through optimizing safety stock, lead times, and replenishment—often while reducing overall costs. So the statement is false because the goal isn’t to grow inventory while cutting costs, but to maximize service at the lowest total cost. In practice, techniques like better forecasting, supplier collaboration, JIT, and safety-stock optimization improve service without indiscriminately increasing inventory.