ISM INTE Exam - Topic 1 Question 1 Discussion

Actual exam question for ISM's INTE exam

Question #: 1
Topic #: 1

[All INTE Questions]

A firm engaging in low-cost country sourcing wants to assume the least amount of risk when importing goods into its own country. Which of the following Incoterms 2020 rules would be MOST useful in achieving this goal7

ACFR

BCPT

CEXW

DDAP

Show Suggested Answer

Suggested Answer: D

In the context of low-cost country sourcing and minimizing risk when importing goods, the selection of appropriate Incoterms 2020 rules is crucial.

DAP (Delivered at Place) is the most suitable Incoterm for a firm wanting to assume the least amount of risk. Under DAP, the seller is responsible for all costs and risks associated with delivering the goods to a specified destination, which includes transportation, export customs clearance, and any other logistical arrangements until the goods are made available for unloading at the buyer's location. This significantly reduces the buyer's risk as the seller handles most of the transportation and logistics.

Other Incoterms, such as:

CFR (Cost and Freight): The seller pays for the cost and freight to bring the goods to the port of destination. However, the risk is transferred to the buyer once the goods are loaded on the vessel.

CPT (Carriage Paid To): Similar to CFR, but can be used for any mode of transport. The seller covers transport costs to a specified destination, but the risk transfers to the buyer upon handing over the goods to the first carrier.

EXW (Ex Works): The buyer assumes all risks and costs from the seller's premises onward, making it the highest risk for the buyer.

Incoterms 2020 by the International Chamber of Commerce (ICC)

'A Guide to Incoterms 2020' by the International Trade Centre (ITC)

by Myra at Jun 30, 2024, 01:21 PM

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Kimi

3 months ago

Totally agree, DAP covers more ground for the importer.

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Anjelica

3 months ago

Wait, why would anyone choose EXW? Seems risky!

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Aracelis

4 months ago

CFR is decent, but not the safest option.

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Desire

4 months ago

I think EXW puts too much risk on the buyer.

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Luis

4 months ago

DAP is the best choice for minimizing risk!

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Hoa

4 months ago

I’m confused about DAP and CPT. I thought both were good for minimizing risk, but I need to double-check their specifics.

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Jamal

4 months ago

I practiced a similar question, and I feel like CFR and CPT also leave some risk on the buyer. DAP seems safer.

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Jonelle

5 months ago

I'm not entirely sure, but I remember EXW places the most risk on the buyer, so that can't be right.

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Kaitlyn

5 months ago

I think DAP might be the best choice since it puts more responsibility on the seller, reducing our risk.

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Veta

5 months ago

I'm a little confused by this question. I'll need to review the Incoterms 2020 rules more carefully to understand which one would be the best choice for the low-cost country sourcing scenario.

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Felix

5 months ago

Okay, I think I know the answer here. The Incoterm that would be most useful for minimizing risk is DAP, since the seller is responsible for delivering the goods to the buyer's named place of destination.

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Kerry

5 months ago

Hmm, I'm a bit unsure about the differences between these Incoterms. I'll need to refresh my memory on the key responsibilities and risks associated with each one.

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Cherry

5 months ago

This seems like a straightforward question about Incoterms. I'll need to carefully review the differences between the options to determine which one minimizes risk for the importing firm.

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Hayley

5 months ago

I'm pretty confident that the answer is DAP. This Incoterm places the most responsibility on the seller to deliver the goods to the buyer's location, which aligns with the goal of minimizing risk for the importing firm.

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Murray

5 months ago

I'm a little confused by all the different server options here. I'll need to review my notes on the EnterpriseOne architecture to make sure I understand which servers work together for AIS.

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Shawna

5 months ago

I think the answer is A. The AS Path will have the remote AS 65100 at the end, so the regex '.+ 65100' should match it.

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Lavonna

5 months ago

I'm feeling confident about this one. The question is asking for the minimum information, so I'll go with the combined option that covers both trends in repeat findings and noncompliance types.

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Glen

2 years ago

I agree with Dell, EXW is the best option for minimizing risk in low-cost country sourcing.

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Marsha

2 years ago

I'm pretty sure the answer is 'F. Carrier Pigeon'. Can't get much lower-risk than that, am I right? Just hope the little guy doesn't get lost along the way.

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Tamar

2 years ago

User2

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Dell

2 years ago

But with EXW, the buyer assumes the least amount of risk as the seller only makes the goods available at their own premises.

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Lynelle

2 years ago

I disagree, I believe the answer is A) CFR.

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Hollis

2 years ago

D. DAP all the way! It's like the Goldilocks of Incoterms - not too much risk, not too little, just right. Plus, it has a nice ring to it, don't you think? 'Delivered At Place' - sounds fancy!

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Dell

2 years ago

I think the answer is C) EXW.

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Joni

2 years ago

Hmm, this is a tricky one. I'm going to go with D. DAP. It just sounds like the most risk-averse option, you know? I'm not trying to take any chances on this exam.

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Gladys

2 years ago

CFR (Cost and Freight) and CPT (Carriage Paid To) both involve the seller arranging and paying for the main transportation, so I don't think those are the least risky options. EXW (Ex Works) puts too much risk on the buyer, so D. DAP is the way to go.

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Shanice

2 years ago

I would go with DAP as well to minimize risk when importing goods.

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Thora

2 years ago

DAP is definitely the least risky option for importing goods.

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Lavonda

2 years ago

EXW does put a lot of risk on the buyer, so I think DAP is the best option.

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Lavelle

2 years ago

I agree, CFR and CPT involve too much risk for the buyer.

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Josphine

2 years ago

I think the answer is D. DAP (Delivered At Place) puts the least amount of risk on the importer since the seller is responsible for delivering the goods to the buyer's location.

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Tonja

2 years ago

I think CPT could also be a good choice for reducing risk.

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Tonja

2 years ago

I agree, DAP is the best option for minimizing risk.

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