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Logistics and Distribution Flashcards

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  1. A third-party logistics provider (3PL) that also manages supply chain strategy, IT integration, and network design is typically classified as a:

    Answer: 4PL

    A 4PL (fourth-party logistics provider) acts as a supply chain integrator, managing multiple 3PLs and overseeing the entire supply chain on behalf of the client.

  2. The practice of combining multiple small shipments from different suppliers into a single truckload destined for one customer is known as:

    Answer: Consolidation

    Consolidation merges smaller freight shipments headed to the same destination into one larger shipment to reduce transportation costs.

  3. Which type of warehouse arrangement stores products based on their frequency of movement, placing fast-moving items closest to shipping docks?

    Answer: Velocity-based slotting

    Velocity-based slotting assigns storage locations based on how frequently items are picked, reducing travel time for high-demand products.

  4. A shipper that regularly ships large volumes of freight and negotiates directly with carriers for preferential rates is called a:

    Answer: Beneficial cargo owner (BCO)

    A BCO (Beneficial Cargo Owner) is the importer or exporter that owns the goods and negotiates directly with ocean carriers, bypassing intermediaries.

  5. In reverse logistics, which activity involves restoring returned products to a like-new condition for resale at full or near-full price?

    Answer: Remanufacturing

    Remanufacturing involves disassembling a product, inspecting and replacing worn parts, and reassembling it to meet original specifications.

  6. The 'bullwhip effect' in distribution networks is most effectively dampened by:

    Answer: Sharing point-of-sale data across all supply chain partners

    Sharing real-time POS data with upstream partners reduces demand distortion because all parties base orders on actual consumer demand rather than forecasts.

  7. A logistics network design that locates distribution centers near population centers to enable same-day or next-day delivery is implementing which strategy?

    Answer: Decentralized distribution

    Decentralized distribution places DCs closer to end customers to reduce delivery lead times, enabling faster fulfillment at higher facility costs.