The higher the supply chain profitability

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Reference no: EM131232301

(1) "The objective of every supply chain should be to maximize the overall value generated." The value generated is "supply chain surplus."

(2) "The higher the supply chain profitability, the more successful the supply chain."

These two claims taken together seem potentially problematic, as supply chain surplus and supply chain profitability are not the same thing. The problem is resolved by an additional claim:

(3) "For most profit-making supply chains, the supply chain surplus will be strongly correlated with profits."

Does claim (3) makes sense? Why, or why not?

Reference no: EM131232301

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