Supply Chain Management & Logistics Flashcards

Which incoterm places the MAXIMUM responsibility on the seller, including delivery to the buyer's named destination with all duties paid?

Answer: DDP (Delivered Duty Paid)

DDP requires the seller to bear all costs and risks until the goods are delivered to the buyer's named destination, including import duties and taxes.

What is the primary advantage of a 'hub-and-spoke' distribution network over a direct shipping network?

Answer: Reduced total transportation costs through freight consolidation

Hub-and-spoke consolidates shipments at central hubs to achieve fuller loads and lower per-unit transportation costs, though it may add transit time.

In supply chain finance, 'reverse factoring' (supply chain financing) primarily benefits:

Answer: Small suppliers by giving them access to early payment at favorable rates

Reverse factoring allows suppliers to receive early payment on invoices at low interest rates (based on the buyer's credit rating), improving supplier cash flow.

A supply chain manager calculates a Days Inventory Outstanding (DIO) of 90 days. Compared to an industry benchmark of 45 days, this indicates:

Answer: The company holds excess inventory relative to industry peers

A DIO of 90 days versus a 45-day benchmark means the company takes twice as long to sell its inventory, indicating excess stock and potentially higher holding costs.

Which routing strategy is used to determine the most efficient sequence of stops for a delivery vehicle serving multiple customers?

Answer: Vehicle Routing Problem (VRP) optimization

The Vehicle Routing Problem (VRP) is an optimization technique that determines the most cost-effective routes and stop sequences for a fleet of delivery vehicles.

What is the key operational difference between a 'distribution center' (DC) and a traditional 'warehouse'?

Answer: A DC focuses on rapid product movement and order fulfillment while a warehouse emphasizes long-term storage

Distribution centers are designed for high-velocity product flow and order picking, while traditional warehouses primarily serve a long-term storage function.

In supply chain management, 'supply chain resilience' refers to a network's ability to:

Answer: Absorb disruptions and rapidly return to normal or improved operating levels

Supply chain resilience is the capacity to anticipate, adapt to, and recover from disruptions while maintaining continuous supply of goods and services.