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Question 532 - CSCP discussion

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Which of the following inventories includes reverse logistics costs?

A.
Anticipation
Answers
A.
Anticipation
B.
Hedge
Answers
B.
Hedge
C.
End of lease
Answers
C.
End of lease
D.
Decoupling
Answers
D.
Decoupling
Suggested answer: C

Explanation:

The inventory that includes reverse logistics costs is end of lease. End of lease inventory refers to the products or assets that are returned to the owner or lessor at the end of a lease contract1. Reverse logistics costs are the expenses associated with moving and managing products or materials in the opposite direction of the normal supply chain flow, such as returns, repairs, recycling, or disposal2. End of lease inventory involves reverse logistics costs because the owner or lessor has to transport, inspect, refurbish, resell, or dispose of the returned products or assets3. The other types of inventory do not include reverse logistics costs. Anticipation inventory is the inventory that is held in advance of expected demand, such as seasonal or promotional demand4. Hedge inventory is the inventory that is held to protect against unforeseen events, such as price fluctuations, supply disruptions, or demand surges5. Decoupling inventory is the inventory that is held to buffer the dependencies between different stages of the supply chain, such as production, distribution, or sales6. These types of inventory are part of the forward logistics process, where products or materials move from the source to the destination, and do not incur reverse logistics costs.

asked 16/09/2024
Colin Ng
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