A firm that is not on the cost-responsiveness efficient frontier can improve which aspects?

A firm that is not on the cost-responsiveness efficient frontier has the potential to improve both responsiveness and cost performance. The efficient frontier in supply chain management represents the optimal trade-off between cost and responsiveness. When a firm is not positioned on this frontier, it indicates that there are inefficiencies present.

Improving responsiveness involves enhancing the firm's ability to meet customer demands quickly, which may involve changes in processes, technology, or inventory management. Concurrently, by streamlining operations and reducing waste, the firm can also achieve better cost performance. Such improvements often complement each other, as more responsive systems can lead to lower costs if designed effectively, and vice versa; for instance, lowering inventory levels can enhance responsiveness and reduce holding costs.

Being off the efficient frontier signifies that the firm can make adjustments to its supply chain practices to achieve a better balance between the two attributes. Thus, the potential for improvement exists in both areas.