Certified Supply Chain Professional (CSCP) Practice Exam

What does the drop ship model entail?

1. Manufacturers handle customer service directly

2. Retailers take customer orders and ship directly from manufacturers

3. Distributors receive stock before selling to retailers

4. Retailers maintain inventory before selling to customers

The correct answer is: Retailers take customer orders and ship directly from manufacturers

The drop ship model is characterized by retailers taking customer orders and shipping products directly from manufacturers or wholesalers to the customers, bypassing the retailer's physical inventory. This method allows retailers to offer a broader selection of products without the need to hold and manage stock themselves. By leveraging the manufacturers' or wholesalers' inventory, retailers can efficiently fulfill customer orders while minimizing costs associated with inventory management and storage. This model is advantageous because it simplifies the supply chain, reduces overhead and provides flexibility in product offerings, ultimately enhancing customer satisfaction with timely deliveries. Other options depict different supply chain practices that involve holding physical stock or managing customer service, which do not define the essence of the drop ship model.