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Question 1 of 30
A consumer goods company is evaluating its supply chain to enhance sustainability and ethical practices. They are considering two different sourcing strategies: one that focuses on local suppliers who adhere to fair trade practices and another that relies on international suppliers with lower costs but questionable labor practices. If the company chooses the local sourcing strategy, they estimate a 20% increase in costs but a 50% increase in customer loyalty and brand reputation. Conversely, the international sourcing strategy would save them 15% in costs but could lead to a 30% decrease in customer loyalty due to negative perceptions. Given these factors, how should the company assess the long-term impact of each strategy on its sustainability goals and overall profitability?
Prioritize local sourcing despite higher costs due to the long-term benefits of customer loyalty and brand reputation.
Opt for international sourcing to maximize short-term profits, disregarding potential long-term consequences.
Implement a mixed sourcing strategy to balance costs and ethical considerations without fully committing to either approach.
Focus solely on cost reduction as the primary metric for evaluating sourcing strategies.

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