CSCP Global Supply Chain Networks Questions and Answers Flashcards

Under which Incoterms 2020 rule does the seller bear all costs and risks, including import duties, to the buyer's named place?

Answer: DDP

DDP (Delivered Duty Paid) places maximum obligation on the seller, including import clearance and duties.

Which item is NOT normally included in landed cost?

Answer: The importer's advertising budget

Landed cost covers costs to get a product to its destination, not downstream marketing expenses.

A multinational sets prices for goods sold between its subsidiaries in different countries. This practice mainly affects:

Answer: In which country profits are recognized and taxed

Transfer pricing shifts where profit is reported, so it is regulated by tax authorities under arm's-length rules.

According to the square root law, if a company goes from 1 to 4 warehouses serving the same demand, total safety stock will roughly:

Answer: Double

Safety stock scales with the square root of the number of stocking locations, and √4 = 2.

What is the main advantage of a hub-and-spoke distribution network?

Answer: Consolidating shipments to gain transportation economies of scale

Hubs consolidate flows from many origins, enabling fuller loads and lower per-unit transport cost.

C-TPAT is a voluntary U.S. Customs and Border Protection program focused on:

Answer: Strengthening supply chain security against terrorism

C-TPAT partners adopt security practices and in return may receive fewer inspections and faster clearance.

An automaker acquires its main steel supplier. This is an example of:

Answer: Backward vertical integration

Acquiring an upstream supplier is backward vertical integration.