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CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment

Himalaya Textiles, an Indian firm, buys raw cotton from several suppliers. Its management studies how receiving, storing and issuing cotton to production can be made cheaper without hurting quality. Which value chain activity is being examined?

The activity is inbound logistics. It covers receiving, storing and internally distributing raw materials to production. Procurement is different, as it deals with purchasing of inputs and supplier terms, while outbound logistics deals with delivering finished goods to customers.

  1. AInbound logisticsCorrect
  2. BOutbound logistics
  3. CProcurement
  4. DService

Explanation

Receiving, storing and distributing inputs to production is inbound logistics, a primary activity. Procurement (a support activity) concerns the purchasing function and supplier dealings, not handling of inputs. Outbound logistics concerns finished goods going to customers.

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