Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following can negatively impact reverse logistics operations?

1. Effective inventory management

2. Streamlined return processes

3. High handling costs

4. Low transportation costs

The correct answer is: High handling costs

High handling costs can indeed negatively impact reverse logistics operations. In reverse logistics, the process involves managing the return of products from the consumer back to the retailer or manufacturer. If handling costs are elevated, it increases the overall costs associated with processing returns, which can diminish profitability and efficiency in the supply chain. These high costs may stem from inadequate facilities, labor inefficiencies, or the need for specialized equipment to manage returns effectively, ultimately leading to a less responsive and more cumbersome reverse logistics operation. In contrast, effective inventory management and streamlined return processes typically enhance reverse logistics by ensuring that returned products are accounted for and processed efficiently, minimizing costs and maximizing recovery. Low transportation costs further facilitate smooth operations by enabling cost-effective movement of returned goods. Therefore, while high handling costs create a barrier to successful reverse logistics, the other options serve to support and improve the overall process.