Certified Supply Chain Professional (CSCP) Practice Exam

What does return on supply chain fixed assets measure?

1. The profit generated from supply chain management costs

2. The return an organization receives on its invested capital in supply chain fixed assets

3. The overall revenue generated by the supply chain

4. The total costs associated with supply chain operations

The correct answer is: The return an organization receives on its invested capital in supply chain fixed assets

Return on supply chain fixed assets measures the efficiency and effectiveness of an organization’s investments in its fixed assets that support supply chain activities. This includes capital investments in property, plant, and equipment specifically used for supply chain operations. By calculating this return, organizations can better understand how well their invested capital is being utilized to generate profits relative to those fixed assets. This metric is crucial for assessing whether the assets are being managed effectively to support the overall business strategy and to ensure that the supply chain is not only operational but also contributes positively to the organization’s profitability. Monitoring this return allows companies to make informed decisions regarding asset allocation, operational improvements, and potential divestitures of underperforming assets.