CSCP CSCP Global Supply Chain Networks Questions and Answers 4

Question 1

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

Accepted Answer

DDP

Answer

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

Question 2

Which item is NOT normally included in landed cost?

Accepted Answer

The importer's advertising budget

Answer

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

Question 3

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

Accepted Answer

In which country profits are recognized and taxed

Answer

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

Question 4

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

Accepted Answer

Double

Answer

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

Question 5

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

Accepted Answer

Consolidating shipments to gain transportation economies of scale

Answer

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

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