C. Inventory carrying costs will increase along with freight costs due to increasing delivery transit times. When implementing a global sourcing strategy, companies typically face longer lead times and delivery transit times due to the distances involved in international shipping. This can result in higher inventory carrying costs, as safety stock levels may need to be increased to account for potential delays or disruptions in the supply chain. Additionally, freight costs may also rise due to the increased distances that goods must be transported.
Economies of scale can still be achieved through global sourcing if shipments are consolidated at the shipping origin, reducing the overall cost per unit. Customer loss due to outsourcing core operations is more of a strategic decision and not directly related to the specific risks of global sourcing.
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