Which of the following is NOT a cost through the supply chain?

• A. Grape growing
• B. Distribution
• C. Packaging
• D. Transportation

Answer: (B)

Costs that pass through the supply chain are those directly tied to creating and moving the product as it flows from raw material to finished goods reaching the market. Grape growing is the raw material cost that starts the chain, packaging is required to transform and protect the product for sale, and transportation moves the product between stages within the chain, all of which add to the product’s cost as it progresses.

Distribution, however, is the function that gets the finished product to retailers and customers and is typically treated as a channel or logistics expense rather than a cost embedded in the product as it moves through the chain. In this framework, it doesn’t count as a cost that passes through the supply chain with the product, so it’s the one that isn’t considered a cost through the chain.