CPM Global Sourcing and International Procurement

Question 1

Which Incoterm places the maximum responsibility on the seller, requiring them to deliver goods to the buyer's named destination with all costs and risks covered?

Accepted Answer

DDP (Delivered Duty Paid)

Answer

DDP (Delivered Duty Paid) requires the seller to bear all costs and risks including import duties, taxes, and delivery to the final destination, making it the term most favorable to the buyer.

Question 2

When a U.S. company imports goods from a foreign supplier, which government agency is primarily responsible for assessing and collecting import duties?

Accepted Answer

U.S. Customs and Border Protection (CBP)

Answer

U.S. Customs and Border Protection (CBP) is the federal agency responsible for assessing, collecting, and enforcing import duties and customs regulations at the border.

Question 3

A Harmonized Tariff Schedule (HTS) code is used in international trade primarily to:

Accepted Answer

Classify products for the purpose of assessing import duties

Answer

HTS codes are standardized numerical codes used to classify imported goods so that the correct tariff rate can be applied by customs authorities.

Question 4

Which of the following is the primary purpose of a Letter of Credit (L/C) in international purchasing transactions?

Accepted Answer

To guarantee payment to the seller upon presentation of complying documents

Answer

A Letter of Credit guarantees the seller payment from the buyer's bank once the seller presents documents proving compliance with the L/C terms, reducing payment risk in international trade.

Question 5

The total landed cost of an internationally sourced product includes which of the following components?

Accepted Answer

Purchase price, freight, insurance, duties, taxes, and other import-related costs

Answer

Total landed cost encompasses all costs incurred to bring goods to the buyer's location, including purchase price, international freight, insurance, customs duties, taxes, and handling fees.

CPM - Certified Purchasing Manager Practice Test

CPM - Certified Purchasing Manager Practice Test

CPM Global Sourcing and International Procurement