Certified Supply Chain Professional (CSCP) Practice Exam

What is included in the concept of landed costs?

1. Quality, costs, and availability differences

2. Only the production costs

3. Shipping fees only

4. Purchase price only

The correct answer is: Quality, costs, and availability differences

Landed costs refer to the total costs associated with acquiring a product, including various elements beyond just the initial purchase price. This comprehensive view is critical for supply chain professionals as it allows for a better understanding of the total expenditure associated with sourcing goods. The correct choice highlights that landed costs include quality, costs, and availability differences. Quality considerations inform the value and appropriateness of a product, while costs encompass all expenses incurred during the purchase process, such as shipping, tariffs, insurance, and handling. Additionally, availability differences pertain to the variability in the timing and reliability of receiving the products, which can significantly impact overall costs and supply chain efficiency. By evaluating these components, businesses can make more informed decisions about suppliers, manage budgets effectively, and assess overall profitability. Recognizing these factors as part of landed costs helps in achieving a complete understanding of the financial implications of sourcing decisions.