GLP Financial Management & Cost Control Flashcards
6 cards from real GLP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 GLP Financial Management & Cost Control flashcards as text
In supply chain finance, what is 'supply chain financing' (reverse factoring) primarily designed to achieve?
Answer: Extend payment terms for buyers while giving suppliers access to early payment at a low discount rate
Reverse factoring lets buyers extend payment terms while a financial institution pays suppliers early at a small discount, improving cash flow for both parties.
What does 'freight absorption pricing' mean for a logistics provider?
Answer: The provider includes freight costs within the product price, absorbing them as a cost of doing business
Freight absorption pricing means the seller incorporates shipping costs into the product price rather than billing freight separately, effectively absorbing them.
Which capital budgeting technique calculates the discount rate that makes the net present value (NPV) of all cash flows from a logistics investment equal to zero?
Answer: Internal Rate of Return (IRR)
IRR is the discount rate at which an investment's NPV equals zero, used to evaluate whether a logistics project's return exceeds the cost of capital.
A logistics manager wants to reduce distribution center overhead costs. Which strategy reallocates fixed overhead costs to specific activities based on actual resource consumption?
Answer: Activity-based costing (ABC)
Activity-based costing assigns overhead to cost objects based on the activities that drive resource consumption, revealing the true cost of specific logistics processes.
What is the main financial risk associated with using spot market freight rates instead of contracted carrier rates?
Answer: Price volatility and unpredictable transportation costs
Spot rates fluctuate with market supply and demand, making budgeting difficult and exposing shippers to sudden cost spikes during tight capacity periods.
Which financial document shows a logistics company's assets, liabilities, and shareholders' equity at a specific point in time?
Answer: Balance sheet
The balance sheet provides a snapshot of what a company owns (assets), what it owes (liabilities), and the residual value for owners (equity) at a specific date.