Certified Supply Chain Professional (CSCP) Practice Exam

What characterizes staple products in terms of demand and profit?

1. High demand and high profit

2. Steady demand and low profit

3. Unpredictable demand and high profit

4. Seasonal demand and variable profit

The correct answer is: Steady demand and low profit

Staple products are characterized by steady demand and typically lower profit margins. These are essential goods that consumers consistently need, such as basic food items, household products, or personal care items. The steady demand means that these products sell regularly and predictably, which helps businesses manage inventory and production processes effectively. The lower profit margin is often due to the high level of competition in the market, as many suppliers offer similar staple products. This competition pressures prices, leading to lower profits compared to more specialized or luxury items. Understanding the nature of staple products and their demand dynamics is essential for effective supply chain management, as it helps businesses forecast accurately and optimize inventory levels to meet consistent consumer demand while managing profit margins efficiently.