How can firms improve supply chain performance according to the cost-responsiveness efficient frontier?

Improving supply chain performance in the context of the cost-responsiveness efficient frontier refers to balancing cost efficiency with the ability to respond quickly to market demands. The correct choice emphasizes that firms can enhance their supply chain performance by increasing their responsiveness to customer needs without incurring additional costs. This approach encourages firms to innovate and streamline their processes, technology, and practices to better meet customer expectations quicker and more effectively, while maintaining or reducing existing cost structures.

Achieving this balance allows firms to operate efficiently while also being adaptable to changes in demand or market conditions. For example, employing just-in-time inventory practices could enhance responsiveness by reducing lead times and ensuring product availability without necessarily increasing costs. This ability to serve customers effectively while controlling costs is central to maintaining a competitive edge in the market.

In contrast, choices that suggest reducing supplier costs, outsourcing production, or limiting product offerings may not inherently improve responsiveness. While these strategies might lead to cost reductions or operational efficiencies, they could also compromise flexibility and customization, which are crucial for responding effectively to customer needs and market fluctuations. Therefore, the focus on enhancing responsiveness without incurring additional costs represents a strategic approach to improving overall supply chain performance.