Practice Test Geeks(CPP) Certified Purchasing Professional Practice Test
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Global Sourcing & Import Regulations Flashcards

7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Global Sourcing & Import Regulations flashcards as text

  1. A buyer discovers that a supplier in a free trade agreement (FTA) country is using components sourced from a non-FTA country. What is the primary concern?

    Answer: Rules of origin compliance

    Rules of origin determine whether goods qualify for preferential FTA tariff rates; using non-qualifying components can disqualify the product.

  2. Which U.S. government agency is primarily responsible for enforcing import regulations and collecting customs duties?

    Answer: U.S. Customs and Border Protection (CBP)

    U.S. Customs and Border Protection (CBP) is the primary agency responsible for enforcing import regulations and collecting duties at the border.

  3. What does the term 'landed cost' include when evaluating global sourcing decisions?

    Answer: Purchase price, freight, insurance, duties, and all delivery costs

    Landed cost includes all costs to deliver goods to the buyer's facility: purchase price, freight, insurance, duties, taxes, and handling fees.

  4. A 'bonded warehouse' allows importers to:

    Answer: Store goods under CBP supervision and defer duty payment until goods enter commerce

    A bonded warehouse is a secure facility where imported goods can be stored under CBP supervision with duty payment deferred until the goods are released.

  5. Which Incoterm transfers maximum risk to the buyer at the earliest point in the shipment?

    Answer: EXW (Ex Works)

    Under EXW, the seller's only obligation is to make goods available at their premises; the buyer bears all costs and risks from that point forward.

  6. What is the purpose of an Importer Security Filing (ISF), commonly called '10+2'?

    Answer: To provide advance cargo information to CBP before ocean shipment arrives in the U.S.

    ISF (10+2) requires importers to submit specific cargo data to CBP at least 24 hours before loading at a foreign port for ocean shipments.

  7. When a purchasing professional conducts a total cost analysis for global sourcing, which hidden cost is most commonly underestimated?

    Answer: Inventory carrying costs due to longer lead times

    Longer lead times from global sourcing require higher safety stock levels, significantly increasing inventory carrying costs that are often overlooked.