CEC Supply Chain & Fulfillment 4 — Questions and Answers
Question 1: What is 'dead stock' in an ecommerce inventory context?
- Inventory that has been written off after theft or damage
- Products that have never been sold and are unlikely to sell, tying up capital (Correct answer)
- Items returned by customers in non-resalable condition
- Products discontinued by the manufacturer but still listed online
Correct answer: Products that have never been sold and are unlikely to sell, tying up capital
Dead stock refers to unsold inventory that is no longer expected to sell, representing tied-up capital and ongoing storage costs.
Question 2: A merchant using Amazon FBA (Fulfillment by Amazon) sends inventory to Amazon's warehouse. Who picks, packs, and ships customer orders?
- The merchant's own team using Amazon's shipping labels
- Amazon's fulfillment centers handle all picking, packing, and shipping (Correct answer)
- A 3PL designated by the merchant ships from Amazon warehouse addresses
- Customers self-fulfill by collecting from Amazon pickup lockers
Correct answer: Amazon's fulfillment centers handle all picking, packing, and shipping
With FBA, Amazon's fulfillment centers manage all warehousing, pick-and-pack, shipping, and even customer service for those orders.
Question 3: What is the purpose of an ASN (Advance Shipping Notice) in supply chain operations?
- Notifying customers of a price increase before checkout
- Informing the recipient of an incoming shipment's contents, quantity, and expected arrival time (Correct answer)
- Authorizing a supplier to ship below minimum order quantities
- Canceling a purchase order before goods are manufactured
Correct answer: Informing the recipient of an incoming shipment's contents, quantity, and expected arrival time
An ASN is sent by the shipper to the receiver before a shipment arrives, enabling preparation of receiving dock and inventory systems.
Question 4: Which fulfillment model gives an ecommerce brand the most control over the customer unboxing experience?
- Dropshipping from the supplier
- Amazon FBA fulfillment
- In-house fulfillment from a branded warehouse (Correct answer)
- Using a commodity 3PL with standard packaging
Correct answer: In-house fulfillment from a branded warehouse
In-house fulfillment allows complete control over packaging, inserts, branding, and the unboxing experience that builds brand loyalty.
Question 5: What is 'zone skipping' in parcel shipping?
- Avoiding high-cost shipping zones by using alternate carriers
- Consolidating parcels and injecting them closer to their final destination, bypassing upstream zones (Correct answer)
- Skipping address verification for domestic shipments
- Using flat-rate boxes to avoid zone-based pricing
Correct answer: Consolidating parcels and injecting them closer to their final destination, bypassing upstream zones
Zone skipping transports consolidated shipments via ground freight to a hub near the delivery zone, then injects them into last-mile delivery, reducing costs.
Question 6: In ecommerce, what does 'shrinkage' refer to in the context of inventory management?
- Products that physically shrink in storage due to temperature changes
- Inventory loss due to theft, damage, administrative errors, or supplier fraud (Correct answer)
- The reduction in product size during repackaging for shipping
- A planned reduction in SKU count to streamline the catalog
Correct answer: Inventory loss due to theft, damage, administrative errors, or supplier fraud
Shrinkage is the difference between recorded and actual inventory, caused by theft, damage, miscounts, or supplier shortages.
Question 7: Which supply chain risk is most directly associated with single-sourcing from one supplier?
- Higher unit costs due to lack of competition
- Supply disruption vulnerability if that supplier experiences issues (Correct answer)
- Reduced product quality due to complacency
- Longer lead times compared to multi-sourcing
Correct answer: Supply disruption vulnerability if that supplier experiences issues
Single-sourcing creates concentration risk; if the sole supplier has production issues, natural disasters, or financial problems, your entire supply can be disrupted.
CEC Supply Chain & Fulfillment 4
What is 'dead stock' in an ecommerce inventory context?