Supply chain surplus consists of what two components?

Supply chain surplus is fundamentally defined as the difference between the value generated for customers and the total cost incurred to create that value. This makes customer value and supply chain cost the two core components of supply chain surplus.

Customer value refers to the perceived benefit that a customer derives from a product or service, which can be expressed through the price they are willing to pay. On the other hand, supply chain cost encompasses all the costs associated with bringing a product to market, including procurement, production, distribution, and selling expenses.

By maximizing customer value while minimizing supply chain costs, organizations can enhance their overall surplus. This relationship highlights the balance that supply chain management aims to achieve in order to improve profitability and customer satisfaction.

In contrast, the other options do not accurately capture the essence of supply chain surplus. Customer satisfaction and supplier cost might relate to customer relationships and vendor management but do not directly correspond to the financial metrics of surplus. Product quantity and logistics expenses could be components of supply chain operations, yet they lack the broader perspective on value and cost. Finally, operations efficiency and market demand focus more on internal performance and market forces, which do not encapsulate the financial aspects of surplus as effectively as customer value and supply chain cost.