CSCP CSCP Global Supply Chain Networks Questions and Answers 2 — Questions and Answers
Question 1: Which strategy involves establishing production facilities in multiple countries to reduce dependency on a single region?
- Vertical integration
- Geographic diversification (Correct answer)
- Demand pooling
- Channel consolidation
Correct answer: Geographic diversification
Geographic diversification spreads manufacturing across regions to mitigate risks from localized disruptions.
Question 2: What is the primary purpose of a foreign trade zone (FTZ) in global supply chain operations?
- Eliminating all import taxes permanently
- Deferring or reducing customs duties on imported goods (Correct answer)
- Providing free labor for assembly operations
- Guaranteeing faster shipping times
Correct answer: Deferring or reducing customs duties on imported goods
Foreign trade zones allow companies to defer, reduce, or eliminate customs duties on goods that are stored, assembled, or manufactured within the zone.
Question 3: In global supply chain management, what does the term 'landed cost' include?
- Only the purchase price of the product
- Purchase price plus domestic shipping only
- Total cost including product price, shipping, duties, taxes, and insurance (Correct answer)
- The cost of warehousing at the destination
Correct answer: Total cost including product price, shipping, duties, taxes, and insurance
Landed cost represents the total price of a product once it has arrived at the buyer's door, including all transportation, duties, taxes, and fees.
Question 4: Which Incoterm places the maximum obligation on the seller, covering all costs and risks to the buyer's destination?
- EXW (Ex Works)
- FOB (Free on Board)
- DDP (Delivered Duty Paid) (Correct answer)
- CIF (Cost, Insurance, and Freight)
Correct answer: DDP (Delivered Duty Paid)
DDP requires the seller to bear all costs and risks of delivering goods to the named destination, including duties and taxes.
Question 5: What is a key challenge of managing inventory in a global supply chain network with long lead times?
- Reduced need for safety stock
- Higher inventory carrying costs and increased risk of obsolescence (Correct answer)
- Simplified demand forecasting
- Lower transportation costs
Correct answer: Higher inventory carrying costs and increased risk of obsolescence
Long lead times force companies to hold more safety stock, increasing carrying costs and the risk that inventory becomes obsolete before it is sold.
Question 6: Which risk mitigation approach involves qualifying and maintaining relationships with backup suppliers in different regions?
- Sole sourcing
- Multi-sourcing (Correct answer)
- Backward integration
- Demand shaping
Correct answer: Multi-sourcing
Multi-sourcing establishes relationships with multiple suppliers across different regions to ensure continuity if one source is disrupted.
CSCP CSCP Global Supply Chain Networks Questions and Answers 2
Which strategy involves establishing production facilities in multiple countries to reduce dependency on a single region?