APICS Certified Supply Chain Professional (CSCP) — Question 247

A company imports subassemblies to complete as finished goods. A substantial portion of this product goes to the export market. The organization might best reduce its expenses for the product by:

Answer options

• A. changing its harmonized tariff codes.
• B. creating a free trade zone (FTZ).
• C. using the same broker to handle imports and exports.
• D. negotiating free alongside ship (FAS) Incoterms® for its imports.

Correct answer: C

Explanation

Using the same broker for handling both imports and exports can streamline processes and reduce overall costs due to economies of scale. The other options may not directly address expense reduction in the same effective manner; for instance, changing tariff codes or creating an FTZ can be complicated and may not guarantee lower expenses, while negotiating Incoterms primarily affects shipping terms rather than brokerage costs.