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L4M7 Exam Name: Whole-life Assets Management Full version: 135 Q&As Full version of L4M7 Dumps Share some L4M7 exam dumps below. 1. In the periodic review system, the order quantity is the same for each order. Is this statement true? A. No, the next order quantity must be larger than the previous one B. No, the inventory position at each review point differs from each other C. Yes, in periodic review system items are reviewed when the Kanban is triggered 1 / 22 https://www.certqueen.com/L4M7.html D. Yes, the order quantity should be equal to economic order quantity Answer: B Explanation: Fixed-Time Period System (or Periodic Review system) is the inventory management system in which inventory is checked in fixed time periods, T, and the quantity ordered varies. The system also contains a target inventory level, R, which is restored when order received. The order quantity is calculated as: Q=RCIP where: Q = order quantity R = target inventory level IP = inventory position Inventory position (IP) is equal to inventory on-hand plus quantity on order minus backorder (if any) The order quantity varies because the inventory position at each review point differs from each other. LO 2, AC 2.3 2. To improve the security of a warehouse, alarm systems are commonly used. Which of the following is an important part of these systems? A. Sensors B. Fencing C. CCTV D. Lighting Answer: A Explanation: 2 / 22 The most basic alarm consists of one or more sensors to detect intruders, and an alerting device to indicate the intrusion. However, a typical premises security alarm employs the following compo-nents: - Premises control unit (PCU), Alarm Control Panel (ACP), or simply panel: The "brain" of the system, it reads sensor inputs, tracks arm/disarm status, and signals intrusions. In modern system, this is typically one or more computer circuit boards inside a metal enclosure, along with a power supply. - Sensors: Devices which detect intrusions. Sensors may be placed at the perimeter of the protected area, within it, or both. Sensors can detect intruders by a variety of methods, such as monitoring doors and windows for opening, or by monitoring unoccupied interiors for motions, sound, vibration, or other disturbances. - Alerting devices: These indicate an alarm condition. Most commonly, these are bells, sirens, and/or flashing lights. Alerting devices serve the dual purposes of warning occupants of intrusion, and potentially scaring off burglars. These devices may also be used to warn occupants of a fire or smoke condition. - Keypads: Small devices, typically wall-mounted, which function as the human-machine interface to the system. In addition to buttons, keypads typically feature indicator lights, a small multi-character display, or both.etc. - Interconnections between components. This may consist of direct wiring to the control unit, or wireless links with local power supplies. In addition to the system itself, security alarms are often coupled with a monitoring service. In the event of an alarm, the premises control unit contacts a central monitoring station. Operators at the station see the signal and take appropriate action, such as contacting property owners, notifying police, or dispatching private security forces. Such signals may be transmitted via dedicated alarm circuits, telephone lines, or the internet. Reference: Security alarm - Wikipedia LO 1, AC 1.1 3. Variability of holding costs 4. Which of the following is the definition of work in progress inventory? A. Inventory that has finished the production process B. Inventory introduced into production but not completed as of the stocktake date C. Inventory not yet introduced into the production process D. Obsolete inventory Answer: B Explanation: 3 / 22 Work in progress is the stock part-way through a manufacturing process; in the service sectors the term is also used for anything between order and delivery. Reference: CIPS study guide page 83 LO 2, AC 2.1 5. Which of the following best defines ‘exponential moving average’? A. A forecasting technique where the average is calculated by dividing the sum of the val-ues by the number of values B. A process by which the reorder of an item is triggered by the inventory level dropping to a predetermined level C. A process by which a decision is taken at a period end or review point to determine how much to reorder D. A forecasting technique where each demand is multiplied by a weighting factor Answer: D Explanation: An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average (SMA), which applies an equal weight to all observations in the period. Reference: CIPS study guide page 111-112 LO 2, AC 2.3 6. XYZ Ltd is a major distributor of electrical equipment protection products in the United States. XYZ found that there was a lack of communication between the company and its key supplier, leading to the supplier trying to predict distributor needs and distributor attempting to estimate lead times. Essentially, both the supplier and the distributor have different sets of information, spending time and money trying to predict what the other will do. To deal with this problem, XYZ Ltd decides to implement new inventory management method in which the supplier manage the replenishment of items for sale. Both parties are obliged to share information on variations in demand and stock levels for goods used for or sale. Which inventory management method is XYZ Ltd implementing? 4 / 22 A. Reverse logistics B. Floor-ready merchandise C. Vendor managed inventory D. Economic order quantity Answer: C Explanation: Vendor Managed Inventory (VMI) is a business model where the buyer of a product provides in- formation to a vendor of that product and the vendor takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location. Floor-Ready Merchandise can be defined as the merchandise that is pre-tagged, pre ticketed and pre-occupied with all the necessary details and information such as marked to their specifications for style, size, type, color and price, this information is required in the retail store and is done before it reaches the retail store. Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has been refined over time. The formula assumes that demand, ordering, and holding costs all remain constant. The full definition of reverse logistics, as according to The Council of Logistics Management, is the process of implementing, controlling, and planning the cost-effective flow of finished goods, raw materials, and in-process inventory. The flow is from the point of consumption (i.e. the customer) to the point of origin (i.e. the manufacturer), to properly dispose of these or to recapture value. In the scenario, XYZ solves the current situation by letting the supplier to management the inventory and sharing stock level information with the supplier. Vendor managed inventory is the most suitable answer. Reference: CIPS study guide page 154 LO 3, AC 3.1 7. In the Appendix A of a long-term supply contract of Bulk Drug Substance, both parties agree that "The reference price for Bulk Product at the specification, per gram, shall be US$10. The unit price for Bulk Product for a specific Purchase Order shall be computed by multiplyingthe above- specified reference price by two corrective factors, namely inflation correction factor and exchange rate correction factor". This pricing appendix is an example of...? A. Discounted pricing B. Fixed pricing 5 / 22 C. Volume-based pricing D. Adjustable pricing Answer: D Explanation: Price setting mechanisms fall into two main categories: fixed and variable. A fixed price mechanism is a straightforward concept which typically results in a relatively stable budget that can be forecast. Variable mechanisms have an element of variable pricing per unit bought. Setting a fixed price mechanism is in theory a relatively simple and straightforward concept, where the collector and the buyer agree on a fixed price for a specific material or mix of materials, for a certain length of time. All other pricing mechanisms that are not fixed have an element of variable pricing per unit bought. The most common variable pricing mechanisms can be divided into two groups: 8. Which of the following is the minimum aisle width for using standard counterbalanced forklifts? A. 4.9 ft - 5.2 ft B. 5.6 ft - 5.9 ft C. 6.9 ft - 7.2 ft D. 10.5 ft - 13.1 ft Answer: D Explanation: Minimum open aisle width for standard counterbalance forklift is 10.5-13.1 ft. You can look at the minimum aisle width for different equipment here, or calculate yourself with an instruction here. LO 1, AC 1.3 9. Stock decreases 10. A supplier delivers large quantities of inventory to its customer's store, but only charges for the goods as and when they are used. This can be described as...? A. Consignment stock B. Components inventory C. Multi-stage inventory D. Multi-echelon stock Answer: A Explanation: Consignment stock is stock legally owned by one party, but held by another, meaning that the 6 / 22 risk and rewards regarding to the said stock remains with the first party while the second party is re-sponsible for distribution or retail operations. Ownership of consignment stock is passed only when the stock is used (issued or sold in the case of a shop). Unused stock in a warehouse may be returned to the supplier when it concerns standard manufactured products. With customer specific items, agreements concerning returning products, should be negotiated. Reference: CIPS study guide page 31 LO 1, AC 1.1 11. A restaurant needs to buy a new freezer. The owner applies total cost of ownership model to calculate the life-time cost of the freezer. This equipment has a price tag of $1,000, the supplier can offer free delivery if the restaurant pays off immediately. Estimated electricity consumption of the freezer is $200 in 5 years. The supplier ascertains that the freezer is very durable, buyer doesn't need to care about maintenance costs. However, if the restaurant needs better protection from breakdowns, the warranty is free for the first 12 months after the purchase. This warranty package can be extended once for another 24-month period with the cost of $75. After 5 years, the buyer will be able to resell this freezer for $250. What would be the estimated total cost of ownership of this freezer if the restaurant owner buys the extended warranty package? A. $1,025 B. $1,200 C. $1,275 D. $1,525 Answer: A Explanation: The total cost of ownership would be the sum of all estimated costs. The costs are as the following: - Purchase price: $1,000 - Electricity consumption: $200 - Extended warranty: $75 Total expense = $1,000 + $200 +$75 = $1,275. Then subtract the resale price from this sum, the total cost of ownership is $1,025. Reference: CIPS study guide page 136-169 LO 3, AC 3.1 12. Many internal processes use the product codes as facilitators 13. Holding costs (carrying costs) are the costs associated with the storage and handling of 7 / 22 physical stock. There are two different types of holding costs: a. Costs related to the value of the goods: financial costs (i.e. the interest on the working capital tied up in inventory, which may be the bank borrowing rate or the company's target for return on capital); cost of insurance; losses due to product deterioration; losses due to obsolescence and redundancy of inventory; losses due to theft, accidental damage etc. b. Costs related to the physical characteristics of the inventory include the following: storage space; power, heat and lighting of the store; movement equipment; labour costs; administration costs. 14. Ranger Mobile Ltd is a emerging smartphone manufacturer. The manufacturer adopts the just-in-time method: First, the customers make orders, then it will decide which components to be purchased according to the bill of materials. These components are known as which of the following? A. Indirect items B. Capital goods C. Dependent demand items D. Independent forecast items Answer: C Explanation: Dependent demand is the requirement for stock item which is directly related to and therefore de-pendent upon the rate of production (examples are: raw materials, components, energy). The com-ponents in the scenario are dependent demand items. Independent demand is the requirement for stock item which is not directly related to, and is therefore independent of rate of production. Reference: CIPS study guide page 95-98 LO 2, AC 2.1 15. Which of the following can replace pallets as bases for unit loads but they require push pull accessories to retrieve or discharge unit load? A. Shrink wraps B. Post pallets C. Skids D. Slip sheets Answer: D Explanation: The system of slip sheet load handling involves the use of a thin sheet of material, the slip 8 / 22 sheet, as a base on which items are assembled as a unit load for handling, storage, and transport. The slip sheet is used in conjunction with a pallet, if desired, at certain stages in the distribution cycle. If all lift trucks in the cycle are equipped with the proper attachment, an appropriate slip sheet is the only material handling base required. Slip sheet requires special push pull accessories and usually use thin and wide forks. Skids are generally described as single-deck pallets and do not have bottom flatted layer which 9 / 22 makes them less bulky and cheaper than conventional pallets but also less universal in their use. Shrink wrap, also referred to as shrink film or shrink wrap, is a versatile polymer material used for the packaging of finished goods. Heat is applied to the film C by either a conveyor heat tunnel or an electric or gas heat gun C which catalyzes the film to shrink tightly around the item placed within. This process results in a clear, durable barrier of protection around the product. Post pallets have a simple metal structure with four uprights and substantial feat to take the load. These may be free standing, but many are designed for the feet to interlock with the posts of another post pallet so that the stack can be created. 10 / 22 Reference: CIPS study guide page 62 LO 1, AC 1.3 16. Which of the following best describes what happens when order volumes from customers increase and multiply through the supply chain? A. Pareto curve B. Opitz system C. Forrester effect D. Seasonal demand 11 / 22 Answer: C Explanation: The bullwhip effect (or Forrester effect) is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain. Seasonal demand: consumer interest in purchasing particular products only during a specific peri-od within the calendar year. OPITZ is a coding system used to form Groups in Group Technology philosophy of Manufacturing. The Pareto Curve is the shape created when the bars of a Pareto Chart are progressivelysummed and the points joined together. The final curve ends at 100% of items in the chart, which means that you can then draw a line across at 80% and 'bounce' it down to find the bar which, when combined with all bars to its left, will give 80% of all items. Reference: CIPS study guide page 112 LO 2, AC 2.3 17. Which costs in the following list are categorised as operation costs in the total cost of ownership model? Select TWO that apply. A. Decommissioning costs B. Costs of any person who operates the equipment C. Installation and configuration costs D. Delivery costs E. Costs of consumables Answer: B, E Explanation: Costs of operating an asset can widely vary. The following table is an example from Guide to Total Cost of Ownership, New Zealand Government: 12 / 22 Reference: CIPS study guide page 163-164 LO 3, AC 3.1 18. A retailer wants to improve its service level in inventory management from 95% to 97%. Which of the following is the best course of action? A. Increasing safety stock B. Expanding replenishment lead time C. Decreasing safety stock D. Holding more cycle stock Answer: C Explanation: For single items, an extra investment in inventory (higher levels of safety stock) will always in- crease customer service levels. Conversely, higher service levels imply larger quantities of safety stocks and an increased investment in inventory. (Procurement and Supply Chain 13 / 22 Management - 9th Edition) Reference: CIPS study guide page 104-105 LO 2, AC 2.2 19. One of the important outputs of an MRP system is the material requirement plan. This plan shows the net requirements for materials or components to make the final product. Which of the following best describes the net material requirements? A. Gross requirements + on-order - Inventory on-hand B. On order + Inventory on-hand C. Total requirements - order releases + amount on-hand D. Gross requirements - Inventory level - Scheduled receipt Answer: D Explanation: The net requirements are worked out using the following equation: Net requirements = Total requirements - Available inventory Where: Total requirements = Gross requirements Available inventory = Inventory on-hand + Units on-order In the other words: Net requirements = Gross requirements - Inventory on-hand - Units on-order Inventory on-hand is also known as Inventory level, whereas Units on-order can be called Scheduled receipt. Reference: CIPS study guide page 117 LO 2, AC 2.3 20. Effective utilization of labour & equipment’s 21. Which one of the following statements is true about radio frequency identification (RFID)? A. RFID tags require laser scanning. B. A passive RFID tag does not use an antenna C. An active RFID tag does not require a power source D. Normally passive RFID tags store ID numbers Answer: D Explanation: Radio frequency identification (RFID) are items which use radio technology to identify itself and its location subject to having appropriate hardware and software. RFID tags are made of three different components: an RFID chip, which is an integrated circuit (IC), an antenna, and a substrate. A RFID Reader is a device that uses radio-frequency waves to wirelessly transfer data between 14 / 22 itself and a RFID tag/label in order to identify, categorize and track assets. When combined with the right RFID software, a RFID reader can identify objects quicker, more accurately, at a reduced overall cost, and at various points of the object’s lifecycle. Passive RFID systems use tags with no internal power source and instead are powered by the electromagnetic energy transmitted from an RFID reader. Passive RFID tags are used for applications such as access control, file tracking, race timing, supply chain management, smart labels, and more. Active RFID systems have three essential parts C a reader or interrogator, antenna, and a tag. Ac-tive RFID tags possess their own power source C an internal battery that enables them to have ex-tremely long read ranges as well as large memory banks. Reference: CIPS study guide page 49-50 LO 1, AC 1.2 22. Which of the following are most likely the benefits of using unit loads? Select TWO that apply. Increase transport time of each item A. Minimise space utilisation B. Safer handling C. Unit loads must be placed on pallets D. Reduce handling cost of one unit Answer: B, D Explanation: The concept of a unit load is to create a stable and secure, easy-to-move group of stock that is fast to load and unload from vehicles. The advantages of unit load concepts are as the following: • More items can be handled at the same time, thereby reducing the number of trips required and, potentially, reducing handling costs, loading and unloading times, and product damage. • Enables the use of standardized material handling equipment. Reference: CIPS study guide page 60-61 LO 1, AC 1.3 23. Which of the following is the material handling equipment which uses the suction force to lift an item? A. Vacuum lifter B. Sack truck C. Dolly D. Pallet stacker 15 / 22 Answer: A Explanation: VACUUM LIFTER uses the vacuum pad which attaches itself to a product. The suction force al- lows the product to be lifted (and rotated and placed). Vacuum lifters are used for moving and positioning glass sheets, but are also seen lifting boxes, plastic sacks, sheets of building materials and pipework. Some models feature hydraulic arms which allow easy movement of the lifted load. The lifting system will have a number of sucker pads and vacuum capability which determines the maximum weights and largest items that can be lifted. DOLLY consists of stack and sets of wheels (either casters or rollers) under the stack that allow the dolly and the heavy object on top of it to move easily and smoothly. For moving in a straight line, rollers is ideal. If you want to move maneuverability, dolly with sets of casters will let you swivel and turn. 16 / 22 SACK TRUCK (hand truck) is an L-shaped box-moving handcart. It comprises a small base plat- form with two wheels at the base and a larger vertical structure. A small ledge to set objects on flat against the floor when the sack truck is upright. When moving, the truck and object are then tilted backward based on the vertical structure until the weight is balanced over the large wheels, making otherwise bulky and heavy objects easier to move. 17 / 22 18 / 22 PALLET STACKER is designed to lift and stack pallets. This one is fully mobile so can move easily around the warehouse. An operator would typically sit or stand while driving like a counter- balanced, reach or straddle lift truck. LO 1, AC 1.3 19 / 22 24. MRP system is the most suitable IT system to manage which type of items? A. Dependent demand B. Construction projects C. Independent demand D. Fast moving components Answer: A Explanation: Material requirement planning (MRP) is a production planning and material (inventory) control system used in manufacturing. Objectives of MRP are to ensure materials are available for production while minimising inventory and to plan production and procurement activities. Bill of materials (BOM) is an important component of MRP. BOM is also known as product structurer. This lists all the items that comprise each assembly and sub-assembly that make up the final product or end item. Therefore, MRP is commonly used to manage dependent demand stock. Reference: CIPS study guide page 116-119 LO 2, AC 2.3 25. Product codes link to products' characteristics 26. Which of the following is often created by each business and commonly used for the purpose of inventory management? A. SKU B. ISBN C. Harmonised system D. FDA product code Answer: A Explanation: Organisations oftencreate their own stock keeping unit (SKU) numbering system, which may or may not have a meaningful structure. Stock keeping unit is a number that is assigned to a product for the purpose of inventory management and is of tracking. In other words, a stock keeping unit is a unique identifier assigned to each product for easier and more efficient record keeping. An FDA (US Food and Drug Administration) product code describes a specific product and contains a combination of five to seven numbers and letters. The product code submitted with each FDA line item should match the actual product name and/or invoice description of the product. The International Standard Book Number is a numeric commercial book identifier which is in- 20 / 22 tended to be unique. Publishers purchase ISBNs from an affiliate of the International ISBN Agency. The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of tariff nomenclature is an internationally standardized system of names and numbers to classify traded products. Reference: CIPS study guide page 33 LO 1, AC 1.2 27. What are the contents of master production schedule in MRP system? A. The investment required for production B. How many final products will be made and when to make them C. The total number of labour required to produce the final product D. What components and materials are and when to purchase them Answer: B Explanation: A master production schedule (MPS) is a plan for individual commodities to be produced in each time period such as production, staffing, inventory, etc.[1] It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded.[2] This plan quantifies significant processes, parts, and other resources in order to optimize production, to identify bottlenecks, and to anticipate needs and completed goods. Since a MPS drives much factory activity, its accuracy and viability dramatically affect profitability. Typical MPSs are created by software with user tweaking. Reference: CIPS study guide page 116-119 LO 2, AC 2.3 28. Which of the following best describes available inventory (also known as inventory position)? A. The amount of inventory on hand B. The amount of inventory on hand plus the amount of inventory on order C. The amount of inventory on order only D. The amount of inventory on hand in excess of expected demand Answer: B Explanation: Available inventory (or Inventory position - IP) is equal to inventory on-hand plus quantity on order minus backorder (if any) Reference: CIPS study guide page 117 21 / 22 LO 2, AC 2.3 29. Figures 30. Cumulative percentage usage value of items 31. Reactive maintenance 32. Good-house-keeping. Reference: - Warehousing: Meaning, Objectives and Functions - CIPS study guide page 3 LO 1, AC 1.1 More Hot Exams are available. 350-401 ENCOR Exam Dumps 350-801 CLCOR Exam Dumps 200-301 CCNA Exam Dumps Powered by TCPDF (www.tcpdf.org) 22 / 22 https://www.certqueen.com/promotion.asp https://www.certqueen.com/350-401.html https://www.certqueen.com/350-801.html https://www.certqueen.com/200-301.html http://www.tcpdf.org
