O Level Commerce: Logistics in Commerce — Practice Questions

These questions practise Topic 4, Logistics in commerce, of Cambridge O Level Commerce (7100, 2026-2028). They cover the functions and methods of transport, choosing a method for a given situation, containerisation and transshipment, warehouse functions and types, and warehouse automation.

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs — examination boards hold copyright in their own papers. Use these alongside the official past papers available free from your board.

Related: Logistics in Commerce study guide | Logistics in Commerce revision notes

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Section A - multiple choice

1. Which is the main disadvantage of rail transport for a manufacturer? [1] A it cannot carry heavy loads B goods usually need road transport at each end C it is faster than air D it can only carry liquids

2. A small grocer drives to a large warehouse, pays for goods and takes them away. The warehouse is a: [1] A bonded warehouse B cold store C cash and carry D regional distribution centre

3. Delivering goods “in the right amount” is which function of transport? [1] A time B place C quantity D security

Section B - structured questions

4. Hill Dairy makes yoghurt in a rural area and sells it to supermarkets in a city 150 km away. (a) Recommend a method of transport for Hill Dairy. Justify your answer. [4] (b) Explain why Hill Dairy might need a cold storage warehouse. [2]

5. Compare rail and road transport for moving 500 tonnes of coal a day from a mine to a power station 400 km away. [6]

6. Pearl Jewellers sends diamond necklaces from Antwerp to customers in Dubai. Explain two factors that make air transport the most suitable choice. [4]

7. (a) Describe what is meant by containerisation. [2] (b) Explain why containerisation reduces the cost of insurance. [2] (c) Explain one disadvantage of containerisation for a country with only small ports. [2]

8. Explain what is meant by transshipment and why it is used. [3]

9. A toy importer brings in most of its stock in August for sale in December. (a) Explain two functions of warehousing for the importer. [4] (b) Explain why the importer might use a bonded warehouse. [3]

10. Explain what logistics postponement means, using an example. [3]

11. A supermarket chain plans to replace three small warehouses with one regional distribution centre that uses robotics and automated sorting. Evaluate this decision. [8]

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Answers

1. B. [1]

2. C. [1]

3. C. [1]

4. (a) Road, using refrigerated trucks [1]: door-to-door delivery to each supermarket [1]; suitable for a medium distance of 150 km [1]; flexible delivery times to keep yoghurt fresh [1]. (b) Yoghurt is perishable and must be kept cold [1], so it needs refrigerated storage before delivery to prevent spoiling [1].

5. [6] Rail: carries very heavy loads in one train; lower cost per tonne over 400 km; less congestion and fewer emissions per tonne; a fixed route is no problem between a mine and a power station, which may both have rail sidings. Road: flexible, but would need many trucks a day, raising fuel and labour costs, congestion and road damage. Conclusion: rail is more suitable for a regular, bulky, long-distance flow.

6. Any two explained: security - necklaces are very valuable and air cargo is closely controlled [2]; urgency - customers expect quick delivery [2]; nature of goods - small and light, so the high air cost per kilogram is a small share of their value [2]; distance - long international journey made quickly [2]. [max 4]

7. (a) Packing goods into standard-sized metal containers [1] that are moved between ships, trains and trucks without unpacking [1]. (b) Sealed containers reduce theft and damage [1], so the risk to the insurer is lower and premiums fall [1]. (c) Small ports may lack the cranes and deep water for container ships [1], so goods must be transshipped or the country is bypassed, raising costs [1].

8. Transferring goods or containers from one ship or vehicle to another during the journey [1], usually at a hub port [1], so that large ships can serve main routes while smaller ships or trucks reach final destinations [1].

9. (a) Any two explained: links with demand - stock is built up before the December peak [2]; protecting supply - goods are available even if later shipments are delayed [2]; price stability - goods can be released steadily [2]. [max 4] (b) Imported toys can be stored without paying customs duty at once [1]; duty is paid only when goods are released for sale [1], which helps the importer’s cash flow (or avoids duty if goods are re-exported) [1].

10. Delaying final stages such as labelling, packing or assembly until customer orders are known [1], often at a warehouse near the market [1]; e.g. printers stored without the country-specific plug and manual, which are added when the destination is known [1].

11. [8] Benefits of an RDC: fewer, fuller deliveries to shops; central stock control; shops need less back-room space. Benefits of automation: lower labour costs; less human error and better picking accuracy; improved inventory control and customer service. Drawbacks: very high investment in the building and robots; job losses and staff resistance; breakdowns could stop supplies to all shops; longer journeys to some shops. Conclusion: likely to be worthwhile for a large chain with high volumes, provided there is a back-up plan for system failures.

A note on exam technique for this topic

When recommending a transport method, name it, then use at least two facts from the scenario linked to syllabus factors. For an 8-mark evaluation, give developed points on both sides and a conclusion that says whether the business should go ahead and under what conditions.

Frequently asked questions

Which warehouse types does 7100 name? Bonded, cold storage, cash and carry, and regional distribution centres (RDCs).

What are the benefits of warehouse automation in the syllabus? Lower labour costs, less human error, improved picking accuracy, improved inventory control and improved customer service.

Can a question ask me to choose between two methods? Yes. Compare them on the factors in the scenario and give a clear recommendation.

Official syllabus

Cambridge O Level Commerce (7100) syllabus for 2026, 2027 and 2028 - official syllabus PDF.