To achieve the objective of increased profits, a company that implements supply chain tactics must effectively address the conflicts between…

To achieve increased profits, a company must balance inventory investment with order-fill rates. High

order-fill rates often require maintaining higher levels of inventory to meet customer demand

promptly, which can increase inventory holding costs. Conversely, minimizing inventory investment

might lead to stockouts and lower order-fill rates, resulting in lost sales and customer dissatisfaction.

Therefore, effective supply chain management involves finding an optimal balance where inventory

levels are sufficient to meet demand without incurring excessive costs, thus enhancing profitability.

This balance does not directly conflict with plant capacity, sales volume, or lead times as critically as

it does with order-fill rates.

Reference: Chopra, S., & Meindl, P. (2016). "Supply Chain Management: Strategy, Planning, and

Operation."