CSCP Questions Bank

Selecting the appropriate mode of transportation in a global supply chain requires understanding the characteristics and limitations of each option:

• Rail Transportation Variability: Rail transportation's availability, specifications, and geographic reach can vary significantly by country. Factors influencing this include:
• Cost Considerations: While rail can be cost-effective for certain types of cargo and distances, its variability in availability and specifications means that it may not always be the optimal choice.
• Comparison to Other Modes:

References

• "Global Logistics and Supply Chain Management" by John Mangan, Chandra Lalwani, Agustina Samanta
• "Logistics & Supply Chain Management" by Martin Christopher
• "The Handbook of Logistics and Distribution Management" by Alan Rushton, Phil Croucher, Peter Baker

A freight invoice is a bill issued by a carrier detailing the charges for transportation services provided. It itemizes the cost associated with the shipment, including the base freight rate, fuel surcharges, accessorial charges, and any other fees applicable. The shipment manifest lists the cargo being transported, and a bill of lading (B/L) serves as a receipt and contract of carriage. A letter of credit (L/C) is a financial document ensuring payment for shipped goods. Therefore, the freight invoice specifically represents the carrier's method of charging for transportation services.References:

• "Freight Invoice Definition." Investopedia.
• "Transportation Documentation." CSCMP (Council of Supply Chain Management Professionals).

When considering storage locations for high volume products, the primary factor is velocity, which refers to the speed at which inventory moves through the supply chain. High-velocity products are those that are sold and restocked frequently, so their storage locations should be optimized to ensure quick and efficient handling and transportation. This minimizes handling time and costs, reduces stockouts, and improves overall supply chain efficiency. Storage locations should be strategically chosen to support fast turnover and easy access to these high-demand products. References: Lambert, D. M., & Cooper, M. C. (2000). Issues in Supply Chain Management, Industrial Marketing Management.

The bullwhip effect refers to the phenomenon where small fluctuations in demand at the consumer level cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer, and raw material supplier levels. One effective method to minimize the bullwhip effect is reducing lead time. Shorter lead times allow for more frequent and smaller replenishment orders, which align more closely with actual demand patterns and reduce the impact of demand variability. This helps in smoothing out the supply chain and reducing excess inventory and stockouts. Outsourcing noncore activities, reducing SKUs, and increasing factory inventory do not directly address the issue of demand amplification like reducing lead times does.

References:

• Lee, H. L., Padmanabhan, V., & Whang, S. (1997). The Bullwhip Effect in Supply Chains. MIT Sloan Management Review.
• Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill.