ISM Exam INTE Topic 1 Question 19 Discussion

Actual exam question for ISM's INTE exam

Question #: 19
Topic #: 1

[All INTE Questions]

A supply manager for a U.S. firm is tasked with negotiating domestic shipping terms. The terms must ensure that the supplier has liability for any damaged products and is responsible for filing any claims with the shipper. The terms must also allow the buying firm to pay the shipper directly for shipping costs. Which of the following will BEST accomplish this objective?

AFOB Origin, Freight Allowed

BFOB Origin, Freight Collect

CFOB Destination, Freight Collect

DFOB Destination, Freight Prepaid

Show Suggested Answer

Suggested Answer: A

Implementing a reverse supply chain requires first defining a consistent return process that can be integrated into the existing forward supply chain. This ensures that all franchisees follow the same procedures for handling returns, which enhances efficiency, customer satisfaction, and potentially reduces costs. Standardizing the return process also allows for better tracking and management of returned goods, improving overall supply chain performance. By addressing this foundational step first, MNO, Inc. can ensure a smoother implementation of the reverse supply chain. Reference:

* Rogers, D. S., & Tibben-Lembke, R. (2001). An Examination of Reverse Logistics Practic-es. Journal of Business Logistics, 22(2), 129-148.

* Blanchard, D. (2010). Supply Chain Management Best Practices. John Wiley & Sons.

by Rocco at Dec 10, 2024, 08:08 PM

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Madonna

10 days ago

I think option A, FOB Origin, Freight Allowed, is the best choice here. The supplier is responsible for the products until they're delivered, and the buying firm can pay the shipper directly for the shipping costs.

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Sheldon

17 days ago

That's a good point, Maryann. Option D does make it easier for the buying firm to handle shipping costs directly.

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Maryann

22 days ago

I disagree, I believe option D) FOB Destination, Freight Prepaid is better because the buying firm can pay the shipper directly for shipping costs.

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Sheldon

24 days ago

I think the best option is A) FOB Origin, Freight Allowed because the supplier will have liability for damaged products and can file claims with the shipper.

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