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CIPS
CIPS Level 6 Professional Diploma in Procurement and Supply
L6M10
Global Logistics Strategy Questions and Answers

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Questions # 1:

What is the role of precedent in the decision-making of international courts and arbitration tribunals?

Options:

Precedent is binding and must be followed uniformly.

Precedent is deployed inconsistently and is not binding.

Precedent is the primary source of international law.

Precedent is excluded and has no relevance.

Answer

Explanation

Precedent ininternational law is used inconsistentlyand is not always binding, similar to domestic Common Law systems. [P-120]

Questions # 2:

A multinational technology company operates in a highly competitive industry with rapidly changing technology. They release new product versions frequently, and their products have short lifecycles. Which of the following global logistics strategies would be most suitable for this company?

Options:

Dynamic and flexible supply chain network

Centralized inventory management

Traditional organizational structure

Static supply chain network

Answer

Explanation

Adynamic and flexible supply chain networkhelps companies manage rapid product changes and short product lifecycles. [P-95]

Questions # 3:

What is the term used to describe the physical separation of different parts of a production process in global logistics?

Options:

Globalization

Integration

Disintegration

Fragmentation

Answer

Explanation

Fragmentationallows different parts of production to occur in different countries, forming international production networks. [P-108]

Questions # 4:

Which of the following contracts is responsible for setting out the rights and obligations of the carrier and the shipper regarding the transportation of goods?

Options:

Insurance contract

Contract of finance

Contract of carriage

Sales contract

Answer

Explanation

Thecontract of carriagedefines the rights and obligations of both the carrier and the shipper in the transportation of goods. [P-122]

Questions # 5:

Under what conditions does the United Nations Convention on Contracts for the International Sale of Goods (CISG) typically apply to international sales contracts?

Options:

Only when both transacting parties are residents of contracting countries

When the contract is exclusively for the sale of services

When the transacting parties explicitly choose the CISG in their contract

When the transacting parties have not specified any applicable law

Answer

Explanation

TheCISG applies by defaultwhen the contract does not explicitly specify an applicable legal framework. [P-125]

Questions # 6:

What does the concept of separability of the flow of goods and the flow of ownership refer to?

Options:

It signifies the ability to distinguish between the ownership of goods and their physical location.

It highlights the importance of independent suppliers in foreign countries.

It implies that multinational firms cannot engage in foreign direct investment.

It means goods and ownership must always be physically located together.

Answer

Explanation

Theseparability of goods and ownershipmeans that goods may bephysically located in one place, while ownership remains with an entity elsewhere. [P-111]

Questions # 7:

Which factors can be used to calculate the duty on imported goods in international trade? (Select ALL that apply)

Options:

The weight and dimensions of the goods

The value of the goods based on the invoice value

The country from which the goods are imported

The country's currency used for payment

The type of goods based on the harmonized system of classification

Answer

B, C, E

Explanation

Duties on imported goods are calculated based oninvoice value, country of origin, and type of goods (harmonized classification). Weight, dimensions, and currency are not primary factors. [P-134]

Questions # 8:

A multinational corporation decides to divest ownership of its subsidiaries, vendors, and suppliers to focus on product strategy. What term best describes this strategic shift?

Options:

Fragmentation

Vertical disintegration

Outsourcing

Integration

Answer

Explanation

Vertical disintegrationoccurs when corporationsdivest their ownership of subsidiaries and suppliersto focus on innovation. [P-107]

Questions # 9:

What is one approach Sarah, an experienced exporter, can take to minimize the risk of disputes over the interpretation of an international sales contract?