What does the COO suggest ABC needs to adopt?

• A. A linear production model.
• B. A circular business model to be more sustainable.
• C. A price-skimming strategy.
• D. A centralized supply chain.

Answer: (B)

The main idea being tested is how adopting a business model can advance sustainability by keeping resources in use. The COO’s suggestion is to adopt a circular business model, which means designing products and processes so materials are kept circulating—through reuse, repair, remanufacture, and recycling—so the company reduces waste and extends the value of its resources.

This approach is best because it directly tackles environmental impact while often delivering long-term cost benefits, new revenue streams from recovered materials, and opportunities for innovative offerings like take-back or product-as-a-service models. It also helps the company meet regulatory pressures and improve its reputation with customers and stakeholders.

The other options don’t fit as well here. A linear production model follows a take-make-dispose path, which increases waste and resource use. A price-skimming strategy is about how to price products, not how the business operates or manages materials. A centralized supply chain concerns logistics and control but doesn’t inherently address sustainability or the looped use of resources.

So, adopting a circular model best aligns with sustainability goals and long-term value creation.