CSCP Logistics and Distribution 2 — Questions and Answers
Question 1: A company ships products from a central warehouse to regional distribution centers and then to retail stores. This network structure is best described as:
- Direct distribution
- Hub-and-spoke distribution (Correct answer)
- Cross-docking
- Drop shipping
Correct answer: Hub-and-spoke distribution
A hub-and-spoke model routes freight through central hubs (distribution centers) before sending it to final destinations (retail stores).
Question 2: Which transportation mode offers the lowest cost per ton-mile for bulk commodities over long distances?
- Truck
- Rail (Correct answer)
- Air
- Pipeline
Correct answer: Rail
Rail transportation has one of the lowest cost-per-ton-mile rates, making it ideal for bulk commodities over long distances.
Question 3: A retailer requires vendors to deliver products already on hangers and price-tagged, ready for the sales floor. This practice is called:
- Value-added logistics
- Floor-ready merchandise (Correct answer)
- Postponement
- Vendor-managed inventory
Correct answer: Floor-ready merchandise
Floor-ready merchandise (FRM) means products arrive pre-ticketed, pre-hung, and ready for immediate placement on the sales floor.
Question 4: The 'last mile' in logistics refers to:
- The final segment of a long-haul trucking route
- The delivery of goods from a distribution center to the end customer (Correct answer)
- The last step in a warehouse pick-and-pack process
- The final audit before shipment
Correct answer: The delivery of goods from a distribution center to the end customer
Last-mile delivery covers the final leg of a supply chain—from a distribution hub to the end consumer's location—and is often the most expensive segment.
Question 5: Under which Incoterm does the seller bear the maximum responsibility, delivering goods to the buyer's named destination and covering all costs and risks?
- EXW (Ex Works)
- FOB (Free on Board)
- DDP (Delivered Duty Paid) (Correct answer)
- CIF (Cost, Insurance, and Freight)
Correct answer: DDP (Delivered Duty Paid)
DDP requires the seller to deliver the goods to the named destination, paying all duties, taxes, and bearing all risks until delivery.
Question 6: A logistics strategy in which a manufacturer ships directly to the end customer on behalf of a retailer, bypassing the retailer's warehouse, is called:
- Cross-docking
- Drop shipping (Correct answer)
- Postponement
- Transshipment
Correct answer: Drop shipping
Drop shipping allows retailers to sell products without holding inventory; the manufacturer or wholesaler ships directly to the customer.
Question 7: Which metric measures how efficiently a warehouse utilizes its available storage space?
- Inventory turnover ratio
- Cube utilization rate (Correct answer)
- Order fill rate
- Receiving accuracy
Correct answer: Cube utilization rate
Cube utilization rate measures the percentage of usable warehouse cubic space that is actually occupied by inventory.
CSCP Logistics and Distribution 2
A company ships products from a central warehouse to regional distribution centers and then to retail stores.
This network structure is best described as: