CIM Global Supply Chain Coordination 2 — Questions and Answers
Question 1: Which document serves as the primary contract between a shipper and an ocean carrier for international freight?
- Bill of lading (Correct answer)
- Commercial invoice
- Certificate of origin
- Packing list
Correct answer: Bill of lading
The bill of lading is both a receipt for goods and a contract of carriage between the shipper and the ocean carrier.
Question 2: What is the main purpose of a Customs Broker in global supply chain operations?
- To negotiate freight rates with carriers
- To prepare and file import/export documentation on behalf of importers and exporters (Correct answer)
- To inspect goods for quality at the port of entry
- To arrange warehousing at destination ports
Correct answer: To prepare and file import/export documentation on behalf of importers and exporters
Customs brokers are licensed professionals who prepare and file documentation required for customs clearance on behalf of their clients.
Question 3: In global supply chain management, what does 'nearshoring' refer to?
- Moving production to the domestic market
- Relocating manufacturing to a nearby country rather than a distant one (Correct answer)
- Outsourcing only non-core functions
- Consolidating all suppliers into a single region
Correct answer: Relocating manufacturing to a nearby country rather than a distant one
Nearshoring involves relocating business operations to a neighboring or nearby country to reduce logistics complexity and lead times.
Question 4: Which risk management strategy involves holding safety stock at multiple international distribution centers?
- Risk avoidance
- Risk pooling (Correct answer)
- Risk transfer
- Risk acceptance
Correct answer: Risk pooling
Risk pooling distributes inventory across multiple locations to reduce the impact of demand variability and supply disruptions.
Question 5: What is 'landed cost' in the context of global sourcing decisions?
- The purchase price of goods from a foreign supplier
- The total cost including purchase price, freight, insurance, duties, and customs fees (Correct answer)
- The cost of warehousing goods after they arrive at the destination
- The transportation cost from factory to port of origin
Correct answer: The total cost including purchase price, freight, insurance, duties, and customs fees
Landed cost encompasses all costs incurred to bring goods to the destination, including purchase price, freight, insurance, tariffs, and customs clearance fees.
Question 6: Which global inventory strategy positions finished goods inventory close to the end customer in multiple regional locations?
- Centralized distribution
- Decentralized distribution (Correct answer)
- Cross-docking
- Drop shipping
Correct answer: Decentralized distribution
Decentralized distribution places inventory in regional facilities closer to customers, reducing lead times at the cost of higher total inventory.
Question 7: What is the primary function of a Free Trade Zone (FTZ) in supply chain management?
- To eliminate all tariffs between participating countries permanently
- To allow goods to be stored, manipulated, or manufactured without paying customs duties until they enter the domestic market (Correct answer)
- To provide subsidized transportation between countries
- To enforce intellectual property protections for foreign manufacturers
Correct answer: To allow goods to be stored, manipulated, or manufactured without paying customs duties until they enter the domestic market
Free Trade Zones allow companies to defer, reduce, or eliminate customs duties on goods processed within the zone until they enter the domestic commerce.
CIM Global Supply Chain Coordination 2
Which document serves as the primary contract between a shipper and an ocean carrier for international freight?