CPSM Logistics & Distribution 4 — Questions and Answers
Question 1: Which logistics KPI measures the percentage of orders shipped complete and on time without damage?
- Order fill rate
- Perfect order rate (Correct answer)
- On-time in-full (OTIF)
- Dock-to-stock cycle time
Correct answer: Perfect order rate
The perfect order rate captures all four dimensions: on time, complete, undamaged, and accurately documented.
Question 2: In a hub-and-spoke distribution network, the 'hub' primarily serves which function?
- Final delivery to end customers
- Consolidation and sorting of freight before outbound dispatch (Correct answer)
- Long-term inventory storage
- Customs clearance for imports
Correct answer: Consolidation and sorting of freight before outbound dispatch
Hubs consolidate inbound freight from spokes and sort it for efficient outbound delivery to destination spokes.
Question 3: Which incoterm transfers risk to the buyer once goods are loaded on board the vessel at the origin port?
- EXW
- FOB (Correct answer)
- CIF
- DDP
Correct answer: FOB
Under FOB (Free On Board), risk transfers to the buyer when goods pass the ship's rail at the named port of shipment.
Question 4: What does 'dwell time' represent in port and terminal logistics?
- Time a ship spends traveling between ports
- Time cargo spends waiting at a terminal before pickup (Correct answer)
- Time required to load a container
- Time goods spend in customs inspection
Correct answer: Time cargo spends waiting at a terminal before pickup
Dwell time is the period cargo sits idle at a terminal waiting to be picked up, and excessive dwell increases congestion and cost.
Question 5: A company switches from air to ocean freight for non-urgent shipments. This decision primarily targets which cost category?
- Warehousing costs
- Transportation costs (Correct answer)
- Inventory carrying costs
- Order processing costs
Correct answer: Transportation costs
Switching to ocean freight directly lowers transportation costs, though it may increase inventory in transit.
Question 6: Which distribution method involves goods being unloaded from inbound trucks and immediately loaded onto outbound trucks with minimal storage?
- Drop shipping
- Cross-docking (Correct answer)
- Postponement
- Consignment
Correct answer: Cross-docking
Cross-docking transfers goods directly from receiving docks to shipping docks, eliminating or minimizing storage time.
Question 7: Third-party logistics (3PL) providers most commonly offer which service bundle?
- Product design and manufacturing
- Transportation, warehousing, and fulfillment (Correct answer)
- Demand forecasting and market research
- Procurement and supplier development
Correct answer: Transportation, warehousing, and fulfillment
3PLs specialize in outsourced logistics services including transportation management, warehousing, and order fulfillment.
CPSM Logistics & Distribution 4
Which logistics KPI measures the percentage of orders shipped complete and on time without damage?