CTS CTS Supply Chain & Intermodal Transportation 2 — Questions and Answers
Question 1: In a hub-and-spoke distribution network, what is the primary advantage over a point-to-point network?
- Faster delivery times for all shipments
- Consolidated volume reduces per-unit costs and improves load factors (Correct answer)
- Eliminates the need for warehousing
- Reduces regulatory compliance requirements
Correct answer: Consolidated volume reduces per-unit costs and improves load factors
Hub-and-spoke networks consolidate freight at central hubs, allowing carriers to achieve higher load factors and lower per-unit transportation costs through economies of scale.
Question 2: A carrier's on-time delivery performance drops from 97% to 88%. Using the SCOR model, which process area would a CTS focus on to investigate root causes?
- Plan
- Source
- Deliver (Correct answer)
- Return
Correct answer: Deliver
The SCOR Deliver process encompasses order management, transportation, and delivery execution, making it the primary focus area for diagnosing on-time performance failures.
Question 3: Which type of warehouse operation involves receiving inbound shipments and immediately transferring them to outbound vehicles with minimal or no storage time?
- Bonded warehousing
- Cross-docking (Correct answer)
- Drop shipping
- Milk run distribution
Correct answer: Cross-docking
Cross-docking transfers freight directly from inbound to outbound docks, often within hours, eliminating long-term storage and reducing handling costs.
Question 4: What does the term 'landed cost' include when importing goods into the United States?
- Only the purchase price and ocean freight
- Purchase price, freight, insurance, duties, taxes, and all fees to the destination (Correct answer)
- Only duties and brokerage fees
- Carrier rate plus fuel surcharge
Correct answer: Purchase price, freight, insurance, duties, taxes, and all fees to the destination
Landed cost is the total cost of a product at the buyer's door, encompassing purchase price, international freight, insurance, import duties, taxes, and all ancillary fees.
Question 5: A shipper using a third-party logistics provider (3PL) notices the 3PL is managing relationships with multiple carriers on the shipper's behalf. Which 3PL service model does this describe?
- Asset-based 3PL
- Transportation management outsourcing (Correct answer)
- Fourth-party logistics (4PL)
- Dedicated contract carriage
Correct answer: Transportation management outsourcing
Transportation management outsourcing is a 3PL service model where the provider manages carrier relationships, procurement, and execution on behalf of the shipper.
Question 6: Which inventory management metric measures the number of times a company's entire inventory is sold and replaced over a given period?
- Days Sales Outstanding (DSO)
- Fill rate
- Inventory turnover ratio (Correct answer)
- Carrying cost percentage
Correct answer: Inventory turnover ratio
Inventory turnover ratio (Cost of Goods Sold ÷ Average Inventory) shows how efficiently a company manages inventory by measuring how many times stock is cycled through in a period.
CTS CTS Supply Chain & Intermodal Transportation 2
In a hub-and-spoke distribution network, what is the primary advantage over a point-to-point network?