Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is an example of landed cost?

1. Employee salaries

2. Cost of cleaning supplies

3. Logistics costs such as transport and special handling

4. Monthly utility expenses

The correct answer is: Logistics costs such as transport and special handling

Landed cost refers to the total expense incurred to get a product to its final destination, which includes several components beyond just the purchase price. This comprehensive calculation typically encompasses costs such as transport, handling, customs duties, insurance, and any other charges that are associated with delivering goods to their final location. Logistics costs, including transport and special handling, exemplify this definition perfectly as they are integral parts of the total expenditure involved in moving goods from the supplier to the buyer. These costs can significantly influence pricing strategies, profitability, and overall supply chain management effectiveness, making it essential to understand their impact on landed cost. The other options, while they represent various expenses a business may incur, do not fit the definition of landed cost. Employee salaries are operational expenses related to personnel rather than the cost of acquiring goods. The cost of cleaning supplies pertains to general operational costs as well, not directly related to bringing a product to market. Lastly, monthly utility expenses are associated with the general operation of business facilities and do not relate specifically to the costs of procuring or transporting goods, which is the crux of landed cost analysis.