Logistics and Supply Chain Foundations
Scope and core vocabulary
GLA 10 questions typically test whether you can distinguish logistics from supply chain management and whether you can apply total-cost thinking. Logistics is the operational work of moving and storing goods-transportation, warehousing, inventory, packaging, and information flows. Supply chain management is broader: it aligns suppliers, producers, distributors, and customers. A frequent trap is treating the two terms as interchangeable. Another is optimizing one cost centre, such as freight, while ignoring inventory carrying cost, order-processing cost, or lost-sales cost.
Know these concepts: customer service level, order cycle time, perfect order, push versus pull, postponement, third-party logistics (3PL) and fourth-party logistics (4PL), and the bullwhip effect. The bullwhip effect is the amplification of demand variability upstream; it is caused by forecast updating, order batching, price promotion, and rationing. Questions often ask you to identify the cause, not just the name.
Worked example. Carrier A quotes $2,000 and takes five days. Carrier B quotes $2,300 and takes three days. Inventory carrying cost is $150 per day of transit. B's extra freight is $300. The two-day saving is 2 × $150 = $300, so the options break even on cost before considering stockout risk and customer service. If carrying cost were $200 per day, B would be $100 cheaper in total. Rule of thumb: compare total landed cost and service, never the freight rate alone.
Traps to watch: assuming the lowest rate wins; confusing a 3PL with a carrier; and treating service level as a cost-free promise.
Transportation Management
Modes, rates, and documents
Transportation questions test mode selection, rate calculation, and document literacy. Know the five modes-road, rail, air, water, and pipeline-and their trade-offs in cost, speed, capacity, and reliability. Intermodal combines modes under one bill of lading. A bill of lading is a receipt, contract of carriage, and document of title; a freight bill is the carrier's invoice. Do not confuse either with a commercial invoice or with Incoterms.
Rate basics: rates are often quoted per hundredweight (cwt) and depend on weight, density, freight class, distance, and accessorials. LTL carriers apply minimum charges, fuel surcharges, and accessorials such as liftgate, inside delivery, and detention. Truckload economics depend on utilization, empty miles, and backhaul. A classic trap is comparing a per-mile rate without normalizing for weight or cube.
Worked example. An LTL shipment weighs 1,200 lb and is rated at $18 per cwt with a $95 minimum. Chargeable revenue weight is 1,200 ÷ 100 = 12 cwt. Line-haul charge = 12 × $18 = $216. Because $216 exceeds the $95 minimum, the minimum does not apply. Add a 22% fuel surcharge: $216 × 0.22 = $47.52, for a total of $263.52. If the shipment weighed 400 lb, the line-haul would be $72, so the $95 minimum would set the charge.
Rule of thumb: always compute chargeable weight, check the minimum, then add surcharges. Traps include ignoring accessorials, treating average transit time as a promise, and assuming the fastest mode is always best.
Inventory and Demand Management
Inventory, demand, and replenishment
Candidates must understand inventory's competing costs and the math behind replenishment. Carrying cost includes capital, storage, obsolescence, insurance, and shrinkage. Ordering cost includes setup, administration, and inbound freight. EOQ balances these two, but EOQ is an order quantity, not a safety stock. Safety stock protects against demand and lead-time variability; reorder point triggers replenishment. ABC analysis prioritizes by annual value, not by SKU count. Cycle counting improves accuracy without a full shutdown.
Demand concepts: independent versus dependent demand, forecast error, seasonality, and the bullwhip effect. Vendor-managed inventory and just-in-time shift responsibility and risk; they do not eliminate inventory.
Worked example. Daily demand is 40 units, lead time is five days, and safety stock is 120 units. Reorder point = (40 × 5) + 120 = 320 units. A common trap is to answer 200 units by forgetting safety stock, or to multiply by weeks without converting units. If demand variability rises, safety stock must rise even when average demand is unchanged.
Service level is not the same as fill rate. A 95% cycle service level means a 95% probability of not stocking out during a cycle; fill rate is the percentage of demand met from stock. Questions often swap these definitions.
Rule of thumb: write the replenishment formula with units attached-units per day × days + buffer units. Traps include treating EOQ as safety stock and applying ABC by item count.
Warehousing and Materials Handling
Warehouse flow and handling
Warehousing questions focus on flow, slotting, and productivity. Understand receiving, put-away, storage, picking, packing, and shipping. Cross-docking moves goods from inbound to outbound with little or no storage; transloading changes the mode of conveyance. Slotting places high-velocity items in accessible locations. ABC slotting typically puts A items-roughly 20% of SKUs producing about 80% of picks-nearest to shipping or in golden-zone locations.
Picking methods include discrete, zone, batch, and wave. Zone picking can reduce travel but adds consolidation. Batch picking reduces trips but increases sortation. Cube utilization measures space use, but 100% cube is rarely efficient because of honeycombing, accessibility, and safety.
Worked example. A warehouse has 10,000 SKUs. Annual pick analysis shows 2,000 SKUs account for 80% of picks. Those A items should be slotted in the most accessible locations; the remaining 8,000 should be slotted by velocity and complementarity. If travel is 55% of pick time, reducing travel is the highest-leverage improvement. A common trap is slotting by SKU number or by unit cost rather than by pick frequency.
Rule of thumb: measure the percentage of pick time spent travelling; then slot to reduce it. Traps include assuming automation always pays, ignoring ergonomics, and confusing cross-docking with storage.
Trade Compliance and Documentation
Trade terms, classification, and compliance
This domain tests the documents and rules that govern cross-border movement. Incoterms 2020 define delivery, risk transfer, and cost allocation between buyer and seller; they do not govern title, payment, or product liability. Know the difference between FCA, FOB, CIF, DAP, and DDP. Under DAP the seller delivers to the named place but the buyer clears import; under DDP the seller also pays import duty and taxes. A classic trap is treating FOB as "freight prepaid" or using Incoterms to decide when title passes.
Classification: the Harmonized System (HS) code determines duty. Classify by the goods' objective characteristics, not by marketing names. Export controls may require a license, an ECCN, or restricted-party screening. A certificate of origin states origin; it does not by itself prove eligibility for a free-trade-agreement preference-origin rules must be met. Customs valuation generally uses transaction value, with adjustments for assists, royalties, and certain transport costs.
Worked example. A seller in Country A agrees to DDP delivery to a buyer in Country B. The seller pays freight, insurance, import duty, and import clearance. If the parties instead choose DAP, the buyer bears import duty and clearance. The price should change accordingly. Rule of thumb: read the three-letter term, the named place, and the version year; then allocate cost and risk separately.
Traps: assuming the invoice currency determines duty; confusing a packing list with a commercial invoice; and treating "origin" as the country of shipment rather than where the good was produced.
Performance, Risk, and Sustainability
Metrics, risk, and responsible operations
Performance questions test whether you can define a metric precisely and use it. On-time-in-full (OTIF) measures delivery timing and quantity. The perfect order rate is stricter: on time, complete, damage-free, and with correct documentation. Calculate it by multiplying component rates, not averaging them. Fill rate measures demand met from stock; order accuracy measures correct items and quantities; dwell time measures how long equipment or inventory waits.
Risk management identifies, assesses, mitigates, and monitors. Exposure is often expressed as probability × impact. Mitigation includes dual sourcing, safety stock, modal diversification, visibility tools, and contractual remedies. Resilience is not the same as redundancy; redundancy adds capacity, while resilience adds the ability to recover.
Sustainability: Scope 1 emissions are direct; Scope 2 are purchased energy; Scope 3 are value-chain emissions. Reverse logistics handles returns, repairs, recycling, and disposal. Ethics and compliance-anti-corruption, labour standards, and sanctions screening-are increasingly tested.
Worked example. A service has four perfect-order components: 95% on time, 90% complete, 98% damage-free, and 97% correct documentation. Perfect order rate = 0.95 × 0.90 × 0.98 × 0.97 ≈ 0.813, or 81.3%. Averaging the four numbers would wrongly give 95%. Rule of thumb: multiply independent pass rates; average only when the metric is explicitly an average.
Traps include treating OTIF as a perfect order, using average transit time without variability, and reporting a single KPI without its cost or service trade-off.