Question 1

A manager would like to insure marine cargo for a 12-month period. Which of the following policies would be best to provide coverage for all of the shipment during this period?
A) Open
B) Special cargo
C) All-risks
D) Warehouse to warehouse

Accepted Answer

An Open policy is designed to cover all shipments over a specified period, typically 12 months, providing continuous coverage for multiple shipments without needing to insure each one separately.

Question 2

A company desires to improve its cash flow situation by postponing its customs duties payment until the last possible point in the supply chain. The company should consider using which type of warehouse?
A) Bonded
B) Contract
C) Third-party
D) Government

Accepted Answer

Bonded warehouses are storage facilities that are approved by government customs authorities for the storage of goods on which payment of duties is deferred until the goods are removed. By using a bonded warehouse, the company can store its imported goods without paying customs duties, thus improving its cash flow situation. The customs duties are only paid once the goods are removed from the bonded warehouse and enter the normal supply chain. Therefore, using a bonded warehouse allows the company to postpone its customs duties payment until the last possible point in the supply chain.

Question 3

Which Incoterm ® applies only to ocean transportation where the exporter is responsible to bring the goods to the port?
A) Ex works (EXW)
B) Free alongside ship (FAS)
C) Free on board (FOB)
D) Delivered at place (DAP)

Accepted Answer

Free alongside ship (FAS) applies only to ocean transportation where the exporter is responsible to bring the goods to the port. Ex works (EXW) means the buyer is responsible for all transportation costs, Free on board (FOB) means the seller is responsible for loading the goods onto the ship, and Delivered at place (DAP) means the seller is responsible for delivering the goods to a specified location.

Question 4

The practice of carriers charging all of their customers more during the peak harvest season is a type of pricing known as:
A) differential rates.
B) incremental rates.
C) distributive rates.
D) commodity rates.

Accepted Answer

The answer of The practice of carriers charging all of...

Question 5

To prevent the importing of certain luxury good so that a country can use its hard currency on essential goods, governments can refuse to issue a(n):
A) general average.
B) specific license.
C) explicit license.
D) import license.

Accepted Answer

The answer of To prevent the importing of certain luxury...

Question 6

A company wants to minimize tariff costs while avoiding the need to file for duty drawback. Which of the following practices would best achieve this objective?
A) Adopt Customs Trade Partnership Against Terrorism (C-TPAT) rules
B) Use foreign/free trade zones (FTZs)
C) Use an international third-party logistics (3PL) provider
D) Ship by free on board (FOB) terms

Accepted Answer

The answer of A company wants to minimize tariff costs...

Question 7

In an effort to increase their customer service levels and reduce order cycle time, a company is considering adding two additional warehouses to their overall operations. As a result, which of the following statements best reflects the cost impact of the additional warehouses?
A) Lower inventory costs and higher facility costs
B) Higher inventory costs and lower facility costs
C) Higher inventory costs and higher inbound transportation costs
D) Lower inventory costs and lower inbound transportation costs

Accepted Answer

Lower inventory costs and higher facility costsThe additional warehouses will allow the company to hold more inventory closer to customers, which will reduce order cycle time and improve customer service levels. However, the additional warehouses will also increase facility costs.

Question 8

Which of the following strategies would a logistics manager most likely choose in order to reduce transportation cost?
A) Outsourcing
B) Consolidating shipments
C) Engaging in a third-party logistics (3PL) partnership
D) Relying on multiple shipments

Accepted Answer

The answer of Which of the following strategies would a...

Question 9

A company currently has a significantly long lead time in determining the disposition of returned products. Which of the following non-procedural areas should the company look into as it performs a root cause analysis?
A) Financial department to see if the sales personnel are reluctant to charge the returns to sales
B) Quality department to see if the process for determining disposition is inefficient
C) Customer service department to see if they are taking a long time to address customer concerns
D) Material handling department to see if it is taking excessive time to handle defective product

Accepted Answer

The material handling department could be causing delays if it takes excessive time to handle defective products, impacting the lead time for determining the disposition of returns.

Question 10

Which of the following facility location techniques is equivalent to a break-even point?
A) Weighted-factor rating method
B) transportation problem model
C) Cost volume analysis
D) Center-of-gravity method

Accepted Answer

Cost volume analysis is equivalent to a break-even point as it determines the point at which the total costs incurred equal the total revenue generated, i.e., the point where there is neither profit nor loss. The other techniques mentioned do not directly involve determining a break-even point.

Question 11

Which of the following costs represents an example of a fixed cost in the motor carrier industry?
A) Vehicle registration
B) Fuel
C) Maintenance
D) Terminals

Accepted Answer

Vehicle registration is a fixed cost because it does not vary with the level of activity.

Question 12

An international organization has a pricing strategy that allows it to sell its product at different prices depending on the country where the product is sold. Which of the following unintended consequences is a result of this strategy?
A) Counterfeit products in the supply chain
B) Gray market products in the supply chain
C) Hostile takeover by a conglomerate
D) Decrease in profits due to variable revenues

Accepted Answer

The answer of An international organization has a pricing strategy...

Question 13

A company that utilizes barges as a major mode of transportation would typically navigate in:
A) global maritime routes
B) land bridges
C) inland waterways
D) intermodal transportation

Accepted Answer

The answer of A company that utilizes barges as a...

Question 14

When defining the business requirements of a new distribution center, one of the first requirements to be considered is the:
A) type of construction material needed.
B) customer service levels to be met.
C) calculation of the planned staffing levels.
D) development of the material handling equipment lists.

Accepted Answer

The answer of When defining the business requirements of a...

Question 15

An oil and gas company needs to ship petrol 1,000 miles from the port on entry to an inland refinery. Which of the following modes of transportation provides the best long-term, cost-efficient solution?
A) Rail
B) Trucking
C) Pipeline
D) Barge

Accepted Answer

A pipeline would be the most cost-efficient solution for transporting petrol over a long distance. It has lower operating and maintenance costs compared to trucks or barges and are not subject to delays caused by weather or traffic like rail and trucking. Additionally, pipelines have higher safety records and are better for the environment as they have lower carbon emissions.

Question 16

What facility location method has the advantage of analyzing both quantitative data and hard-to-evaluate criteria?
A) Center-of-gravity
B) Factor rating
C) Location and break-even analysis
D) Least-cost-per-lane

Accepted Answer

The factor rating method allows for the consideration of both quantitative data (such as transportation costs or labor availability) as well as hard-to-evaluate criteria (such as proximity to key customers or quality of life factors for employees). This makes it a comprehensive approach to facility location analysis.

Question 17

Which of the following types benchmarking would a company utilize in order to determine why a significant gap exists in its order fill rates?
A) Performance benchmarking
B) Process benchmarking
C) Product benchmarking
D) Strategic benchmarking

Accepted Answer

When a company wants to determine why a significant gap exists in its order fill rates, it would utilize process benchmarking to analyze the processes involved in order fulfillment and compare them with industry benchmarks and best practices. Performance benchmarking is used when a company wants to compare its performance with other companies in the industry, product benchmarking is used to compare specific products or services with similar products or services offered by competitors, and strategic benchmarking is used to compare a company's overall strategic approach with that of its competitors.

Question 18

In warehouse operations, picking process occurs when:
A) customer orders for product are ready to be shipped or to replenish a forward case or unit pick area.
B) immediately after a product is stored in a designated location in order to be shipped to the customer.
C) a Kanban signal arrives to replenish material in the workshop.
D) when a customer order needs to be replaced by a new product die to engineering changes.

Accepted Answer

The answer of In warehouse operations, picking process occurs when:
A)...

Question 19

Which of the following parties play an integral role during the transportation process?
A) Carriers, shippers, consignees, and financial institutions
B) Carriers, consignees, freight brokers, and financial institutions
C) general public, carriers, warehouses, and shippers
D) Government, general public, shippers, and consignees

Accepted Answer

The answer of Which of the following parties play an...

Question 20

A trucking company purchased a tractor-trailer for $150,000 to support its short-haul business. The tractor-trailer will be in service for 5 years before it will be sold at $55,000. With annual fuel costs estimated at $12,000, what is the annual depreciation for the vehicle?
A) $7,000
B) $11,000
C) $19,000
D) $30,000

Accepted Answer

The annual depreciation is calculated by subtracting the salvage value from the purchase price and then dividing by the number of years in service: ($150,000 - $55,000) / 5 = $19,000.

Exam 1: Certification in Logistics, Transportation and Distribution

A manager would like to insure marine cargo for a 12-month period. Which of the following policies would be best to provide coverage for all of the shipment during this period?

A company desires to improve its cash flow situation by postponing its customs duties payment until the last possible point in the supply chain. The company should consider using which type of warehouse?

Which Incoterm ® applies only to ocean transportation where the exporter is responsible to bring the goods to the port?

The practice of carriers charging all of their customers more during the peak harvest season is a type of pricing known as:

To prevent the importing of certain luxury good so that a country can use its hard currency on essential goods, governments can refuse to issue a(n) :

A company wants to minimize tariff costs while avoiding the need to file for duty drawback. Which of the following practices would best achieve this objective?

In an effort to increase their customer service levels and reduce order cycle time, a company is considering adding two additional warehouses to their overall operations. As a result, which of the following statements best reflects the cost impact of the additional warehouses?

Which of the following strategies would a logistics manager most likely choose in order to reduce transportation cost?

A company currently has a significantly long lead time in determining the disposition of returned products. Which of the following non-procedural areas should the company look into as it performs a root cause analysis?

Which of the following facility location techniques is equivalent to a break-even point?

Which of the following costs represents an example of a fixed cost in the motor carrier industry?

An international organization has a pricing strategy that allows it to sell its product at different prices depending on the country where the product is sold. Which of the following unintended consequences is a result of this strategy?

A company that utilizes barges as a major mode of transportation would typically navigate in:

When defining the business requirements of a new distribution center, one of the first requirements to be considered is the:

An oil and gas company needs to ship petrol 1,000 miles from the port on entry to an inland refinery. Which of the following modes of transportation provides the best long-term, cost-efficient solution?

What facility location method has the advantage of analyzing both quantitative data and hard-to-evaluate criteria?

Which of the following types benchmarking would a company utilize in order to determine why a significant gap exists in its order fill rates?

In warehouse operations, picking process occurs when:

Which of the following parties play an integral role during the transportation process?

A trucking company purchased a tractor-trailer for $150,000 to support its short-haul business. The tractor-trailer will be in service for 5 years before it will be sold at $55,000. With annual fuel costs estimated at $12,000, what is the annual depreciation for the vehicle?