The do-it-yourselfer selected a gallon can of base paint from the shelf at the local hardware store and handed it to Keith, the cheerful clerk at the paint counter. Their eyes met briefly as the do-it-yourselfer silently handed over sample 150C-1, Musical Mist, to the clerk.

It was impractical to keep several gallons of every possible color on the shelves, so the paint manufacturer created a clever workaround. This workaround was a computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired shade, in this case, Musical Mist. The hardware store now only needed to stock the base paint, this machine, and a small supply of paint pigments to create the thousands of colors in its catalog.

This scenario is a prime example of:

A. Postponement
B. The bullwhip effect
C. Drop shipping
D. Vendor managed inventory

Postponement is a strategy that allows companies to delay certain activities until customer demand becomes more apparent. In this case, the hardware store does not need to keep large amounts of paint in stock to offer a variety of colors to its customers. Instead, the store only needs to keep the base paint and pigments on hand.

When a customer requests a specific color, the store can then use the computer-based system to create the desired shade.Postponement has several benefits in the supply chain. First, it allows companies to reduce inventory costs by not holding excessive amounts of finished goods.

Second, it can help to reduce the bullwhip effect, which occurs when small changes in demand at the end of the supply chain cause significant fluctuations in demand upstream. Finally, postponement can help to improve customer service by allowing companies to offer a wider range of options without increasing inventory levels.
In this scenario, the use of a computer-based system to create custom paint colors also illustrates the benefits of technology in the supply chain. By using technology, the hardware store can offer a wider range of colors to customers without incurring significant costs. Additionally, the system can be used to track inventory levels and ensure that the store always has the necessary supplies on hand.
Overall, the use of postponement and technology in this scenario is an excellent example of how companies can improve their supply chain operations while also providing better service to customers. Therefore option A is correct.

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