What is Cost Responsiveness Frontier?
The cost responsiveness frontier is a graph, or visual representation, of the trade-off between efficiency and responsiveness. The graph shows cost on the x-axis and responsiveness on the y-axis. The graphical curve, which is called the efficient frontier, represents the cost and response time for different strategies. For a given level of responsiveness, the frontier shows the minimum cost.
When a business operates within the frontier, it can decrease its costs by taking appropriate actions while making no change in its responsiveness. The frontier curve changes over time as companies strive to improve supply chain efficiency by reducing costs and increasing responsiveness.