Certified Supply Chain Professional (CSCP) Practice Exam

Which costs are detrimental to reverse logistics?

1. Repair fees

2. Sales from warranties

3. Transport costs

4. Recycle fees

The correct answer is: Transport costs

Transport costs are detrimental to reverse logistics because these costs can significantly impact the overall efficiency and profitability of the reverse supply chain. In the reverse logistics process, products are returned from the consumer back to the manufacturer or retailer, and this often requires additional transportation expenditures, which can be substantial. When managing reverse logistics, companies must consider the various elements involved in transporting returned items, including pickups from customers, handling, storage, and reprocessing or refurbishing products to resell. If transport costs are high, they can offset the potential savings or profits gained from reselling refurbished items or recycling products, ultimately reducing the viability of reverse logistics operations. Efficiently managing transport costs is crucial to maintaining a sustainable and profitable reverse logistics process. By focusing on optimizing transportation routes, consolidating shipments, and leveraging local resources, companies can mitigate these costs and improve their overall reverse logistics performance.