GLP Financial Management & Cost Control Flashcards

Which pricing model charges customers a flat rate based on shipping zones and weight brackets, regardless of actual carrier cost fluctuations?

Answer: Zone-based flat-rate pricing

Zone-based flat-rate pricing provides predictable charges by using predetermined rate tables tied to distance zones and weight, shielding customers from market volatility.

What is the primary purpose of a logistics audit in financial management?

Answer: To verify that carrier invoices match contracted rates and identify billing errors or overcharges

A logistics audit compares carrier invoices against negotiated contracts and shipment data to recover overcharges and ensure billing accuracy.

Which document summarizes the projected income, expenses, and profitability of a logistics operation over a fiscal year?

Answer: Pro forma income statement

A pro forma income statement projects anticipated revenues and expenses to forecast profitability for future planning periods.

Fuel surcharges in transportation billing are typically indexed to which benchmark?

Answer: The U.S. Department of Energy weekly retail diesel fuel price

Most carriers tie fuel surcharges to the U.S. DOE's weekly retail diesel price index, adjusting rates as fuel costs rise or fall.

What is 'demurrage' in the context of logistics cost management?

Answer: A fee charged for detaining a container beyond the free-time period at a port or rail facility

Demurrage is a charge assessed when a shipper or consignee retains a container beyond the allotted free days at a terminal, incentivizing faster cargo release.

Which cost-reduction strategy involves consolidating multiple small shipments from different shippers into one full truckload to lower per-unit freight cost?

Answer: Freight consolidation

Freight consolidation combines smaller shipments into a single full load, spreading the fixed trucking cost across more units and reducing the per-unit freight rate.