CSCP Logistics and Distribution 5 — Questions and Answers
Question 1: The total cost of logistics, including transportation, warehousing, inventory carrying, and order processing costs, is called:
- Total delivered cost
- Total cost of ownership
- Total logistics cost (Correct answer)
- Landed cost
Correct answer: Total logistics cost
Total logistics cost encompasses all costs associated with moving and storing goods through the supply chain, used to evaluate trade-offs between service levels and expenses.
Question 2: A milk run pickup schedule, where a truck visits multiple suppliers in a loop to consolidate partial loads, primarily reduces:
- Inventory carrying costs
- Inbound transportation costs (Correct answer)
- Warehouse space requirements
- Order processing time
Correct answer: Inbound transportation costs
Milk runs consolidate small pickups from multiple suppliers into one truck route, reducing inbound freight costs compared to each supplier making separate full-truck deliveries.
Question 3: In US domestic trucking, a Less-than-Truckload (LTL) shipment is typically defined as freight weighing:
- Under 150 lbs
- 150–10,000 lbs (Correct answer)
- 10,001–20,000 lbs
- Over 44,000 lbs
Correct answer: 150–10,000 lbs
LTL shipments typically range from 150 to 10,000 lbs (some carriers up to 15,000 lbs), sharing trailer space with freight from other shippers.
Question 4: A company decides to outsource all logistics functions to a single provider that manages warehousing, transportation, and customs brokerage. This is an example of:
- Vertical integration
- Horizontal integration
- 3PL outsourcing (Correct answer)
- Insourcing
Correct answer: 3PL outsourcing
Contracting all logistics functions to an external service provider is classic 3PL outsourcing, allowing the company to focus on its core business.
Question 5: Which performance metric measures the percentage of customer orders delivered complete, on time, and without damage?
- Order fill rate
- On-time delivery rate
- Perfect order rate (Correct answer)
- Customer satisfaction index
Correct answer: Perfect order rate
The perfect order rate measures orders that are complete, on time, undamaged, and correctly documented—representing the ultimate logistics service standard.
Question 6: Intermodal transportation uses standardized containers primarily to:
- Increase transit speed on each individual leg
- Eliminate the need for customs documentation
- Enable seamless transfer between modes without rehandling cargo (Correct answer)
- Reduce fuel consumption on ocean vessels
Correct answer: Enable seamless transfer between modes without rehandling cargo
Standardized intermodal containers allow freight to transfer between ships, trains, and trucks without unloading and reloading the cargo itself, reducing handling costs and damage.
Question 7: A company maintains a small stockpile of critical components at a supplier's facility, available for immediate release only when needed. This is best described as:
- Safety stock
- Consignment inventory (Correct answer)
- Kanban replenishment
- Bonded inventory
Correct answer: Consignment inventory
Consignment inventory held at a supplier's location remains the supplier's property until called off by the buyer, reducing the buyer's capital commitment while ensuring availability.
CSCP Logistics and Distribution 5
The total cost of logistics, including transportation, warehousing, inventory carrying, and order processing costs, is called: