IDAT Administration and Logistics 3 — Questions and Answers
Question 1: Which shipping term means the seller bears all risk and cost until goods are delivered to the buyer's named destination?
- FOB Shipping Point
- FOB Destination (Correct answer)
- CIF
- EXW
Correct answer: FOB Destination
FOB Destination means the seller retains ownership and risk until the goods arrive at the buyer's specified location.
Question 2: A bill of lading (BOL) is best described as:
- A vendor's price quote for requested goods
- A legal document issued by a carrier acknowledging receipt of cargo for shipment (Correct answer)
- An internal request form to procure supplies
- A customs declaration for international imports
Correct answer: A legal document issued by a carrier acknowledging receipt of cargo for shipment
A bill of lading is a carrier-issued document that serves as a receipt for cargo, a contract of carriage, and a document of title.
Question 3: What does 'EOQ' stand for in inventory management?
- End of Quarter
- Economic Order Quantity (Correct answer)
- Estimated Outbound Quality
- Export Order Quota
Correct answer: Economic Order Quantity
EOQ (Economic Order Quantity) is the optimal order size that minimizes the total costs of ordering and holding inventory.
Question 4: In administrative operations, a 'standard operating procedure' (SOP) is used to:
- Set salary ranges for administrative staff
- Provide step-by-step instructions to ensure consistent task completion (Correct answer)
- Authorize capital expenditure requests
- Track employee attendance records
Correct answer: Provide step-by-step instructions to ensure consistent task completion
An SOP documents the routine steps for performing a task consistently and correctly across an organization.
Question 5: Which logistics concept involves consolidating small shipments from multiple suppliers into one larger shipment?
- Drop shipping
- Cross-docking
- Freight consolidation (Correct answer)
- Reverse logistics
Correct answer: Freight consolidation
Freight consolidation combines multiple smaller shipments into a single larger load to reduce per-unit shipping costs.
Question 6: A 'requisition' in an organization typically initiates which process?
- Employee performance review
- The purchasing cycle by requesting goods or services (Correct answer)
- Vendor payment and accounts payable settlement
- Disposal of obsolete equipment
Correct answer: The purchasing cycle by requesting goods or services
A requisition is an internal request that triggers the purchasing process by formally notifying procurement of a need.
Question 7: Which performance metric measures the percentage of customer orders fulfilled completely and on time?
- Inventory turnover ratio
- Perfect order rate (Correct answer)
- Gross margin return on inventory
- Days sales of inventory
Correct answer: Perfect order rate
The perfect order rate tracks the proportion of orders delivered in full, on time, undamaged, and with correct documentation.
IDAT Administration and Logistics 3
Which shipping term means the seller bears all risk and cost until goods are delivered to the buyer's named destination?