Discuss ISM INTE Exam Topic 1 Question 19

A supply manager for a U.S. firm is tasked with negotiating domestic shipping terms. The terms must ensure that the supplier has liability for any damaged products and is responsible for filing any claims with the shipper. The terms must also allow the buying firm to pay the shipper directly for shipping costs. Which of the following will BEST accomplish this objective?

AFOB Origin, Freight Allowed

BFOB Origin, Freight Collect

CFOB Destination, Freight Collect

DFOB Destination, Freight Prepaid

Suggested Answer: A

Implementing a reverse supply chain requires first defining a consistent return process that can be integrated into the existing forward supply chain. This ensures that all franchisees follow the same procedures for handling returns, which enhances efficiency, customer satisfaction, and potentially reduces costs. Standardizing the return process also allows for better tracking and management of returned goods, improving overall supply chain performance. By addressing this foundational step first, MNO, Inc. can ensure a smoother implementation of the reverse supply chain. Reference:

* Rogers, D. S., & Tibben-Lembke, R. (2001). An Examination of Reverse Logistics Practic-es. Journal of Business Logistics, 22(2), 129-148.

* Blanchard, D. (2010). Supply Chain Management Best Practices. John Wiley & Sons.

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31 comments · newest first

Maurine 11 months ago

Just to clarify, the buyer pays the shipper directly with FOB Origin, right?

Keneth 12 months ago

I think FOB Destination, Freight Prepaid could work too.

Jeffrey 12 months ago

Wait, are we sure about that? Seems risky.

Melissa 1 year ago

Totally agree, that puts liability on the supplier.

Rashida 1 year ago

FOB Origin, Freight Collect is the way to go!

Elouise 1 year ago

I recall that FOB Origin means the buyer takes responsibility once the goods leave the supplier, which might not fit the requirements here.

Cammy 1 year ago

I practiced a similar question, and I feel like FOB Destination, Freight Prepaid could also work, but I’m not confident about the liability aspect.

Dean 1 year ago

I think FOB Origin, Freight Collect might be the right choice since it seems to align with the supplier being responsible for claims.

Queen 1 year ago

I remember discussing FOB terms in class, but I'm not entirely sure which one would put the liability on the supplier.

Shelba 1 year ago

This is a tricky one. I'm torn between A and D, but I think A might be the better choice since it puts the liability on the supplier. I'll double-check the details to be sure.

Cherrie 1 year ago

Okay, I think I've got this. The key is ensuring the supplier is liable for any damage and can file claims with the shipper, while also allowing the buying firm to pay the shipper directly. I'll go with option A, FOB Origin, Freight Allowed.

Pa 1 year ago

Hmm, I'm a bit unsure about the difference between FOB Origin and FOB Destination. I'll need to refresh my memory on those shipping terms.

Mammie 1 year ago

This seems like a straightforward question about shipping terms. I'll need to carefully review the details to determine which option best meets the requirements.

Albina 2 years ago

Personally, I'd go with option A. It just seems the most logical choice, you know? What do you think, should we grab a coffee after the exam and discuss it further? I'm buying, of course.

Jessenia 1 year ago

↳ replying to Albina

Sure, let's grab coffee after the exam. I'm in!

Rozella 1 year ago

↳ replying to Albina

I think option A is better because it puts the liability on the supplier.

Willard 1 year ago

↳ replying to Albina

Sure, I'd love to grab coffee after the exam. Thanks for offering to buy!

Chaya 1 year ago

↳ replying to Albina

That sounds like a good choice. I agree with you.

Margart 1 year ago

↳ replying to Albina

A) FOB Origin, Freight Allowed

Dallas 1 year ago

↳ replying to Albina

B) FOB Origin, Freight Collect

Keva 1 year ago

↳ replying to Albina

That sounds like a good choice. I agree with you.

Isabella 1 year ago

↳ replying to Albina

A) FOB Origin, Freight Allowed

Lina 2 years ago

I'm going with option B, FOB Origin, Freight Collect. It just seems the most straightforward to me. The supplier is liable, and the buying firm can pay the shipper directly. Easy peasy, lemon squeezy!

Jaime 2 years ago

Hmm, I'm not sure. Option D, FOB Destination, Freight Prepaid, could work too. The supplier is responsible for the shipping, and the buying firm doesn't have to worry about it. But then again, I'm not the shipping expert here.

Gilberto 2 years ago

Option C, FOB Destination, Freight Collect, seems like the way to go. The supplier is liable for any damage, and the buying firm can still pay the shipper directly. It's a win-win!

Madonna 2 years ago

I think option A, FOB Origin, Freight Allowed, is the best choice here. The supplier is responsible for the products until they're delivered, and the buying firm can pay the shipper directly for the shipping costs.

Glory 1 year ago

↳ replying to Madonna

I think option D, FOB Destination, Freight Prepaid, would be better. The buying firm can have more control over the shipping process and costs.

Emmanuel 2 years ago

↳ replying to Madonna

I agree, option A is the best choice. It ensures the supplier has liability for any damaged products and allows the buying firm to pay the shipper directly.

Sheldon 2 years ago

That's a good point, Maryann. Option D does make it easier for the buying firm to handle shipping costs directly.

Maryann 2 years ago

I disagree, I believe option D) FOB Destination, Freight Prepaid is better because the buying firm can pay the shipper directly for shipping costs.

Sheldon 2 years ago

I think the best option is A) FOB Origin, Freight Allowed because the supplier will have liability for damaged products and can file claims with the shipper.

ISM INTE Exam - Topic 1 Question 19 Discussion