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Acme's COO is considering implementing a Pull-based system for one of its major consumer product lines. This product line is made by an autonomous Business
Acme's COO is considering implementing a Pull-based system for one of its major consumer product lines. This product line is made by an autonomous Business Unit with its own facilities and operations. However, they share the Distribution network with the rest of Acme's Business Units. Many of the key components are sourced from Vietnam and China, with sub-assemblies done in Shenzhen and the final assembly in Texas. The cumulative lead times from the first supply to Acme's distribution facilities are long and demand at the retail level is variable. Acme's COO now wants to focus on building a "lean" supply chain with as much of a "just-in-time" operation as possible to maintain low inventory levels. What of the following is a major risk or disadvantage of Acme implementing such a Pull-based system: A short-term supply disruption in Vietnam and China could result in inventory stockouts in Acme's markets The Texas unit may have too much inventory as a result of the supply chain operations It will be difficult for Acme to distribute its supply between Vietnam and China, and build redundancy into its supply base The "lean" supply chain will allow Acme to respond rapidly to changing demand patterns
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