CIPS Whole Life Asset Management - L4M7 Exam Practice Test
Which of the following factors should be considered when decommissioning and disposing of a machine at the end of its useful life? Select TWO that apply.
Correct Answer: A,C
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What term describes the method used to account for inventory, where the most recently produced items are recorded as sold first?
Correct Answer: B
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Which of the following are critical factors that must be considered when evaluating warehouse or storage locations?
* The cost of the proposed location
* Who owns the storage location or warehouse
* Access to transport networks
* The number of windows in the building
* The cost of the proposed location
* Who owns the storage location or warehouse
* Access to transport networks
* The number of windows in the building
Correct Answer: A
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The optimum balance in the standard ISO 18602:2013 (Packaging and the environment - Optimi-zation of the packaging system) considers which of the following factors?
1. Environmental impact of losses due to lack of packaging
2. The process for packaging design, including material selection
3. Procedures and requirements for packaging that are suitable for organic recycling
4. Environmental impact of excess packaging
1. Environmental impact of losses due to lack of packaging
2. The process for packaging design, including material selection
3. Procedures and requirements for packaging that are suitable for organic recycling
4. Environmental impact of excess packaging
Correct Answer: C
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Which of the following are the different types of inventory that a manufacturing company usually has?
1. Work in progress
2. Economic order quantity
3. Raw materials
4. Finished goods
1. Work in progress
2. Economic order quantity
3. Raw materials
4. Finished goods
Correct Answer: D
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A supermarket calculates that the average holding cost for an item is $1.50 per cubic meter per day. A beer pallet which has volume of 0.5 cubic meter will be stored for 5 days. What is the holding cost of this beer pallet?
Correct Answer: D
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A meaning of 'decommissioning a piece of equipment' is to...
Correct Answer: B
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Which of the following is the formula for calculating the re-order level?
Correct Answer: D
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RFID uses radio frequencies for the purpose of identification and tracking of assets. Which of the following are disadvantages of using RFID? Select THREE that apply.
* RFID can be too expensive for many applications compared to other tracking and identification methods
* RFID tags have a limited amount of memory and are less effective than other product tracking systems
* It is difficult for an RFID reader to read the information where tags are installed in liquid or metal products
* Interference has been observed to take place in RFID systems when devices such as hand-held, portable, two-way radios are in use
* RFID provides a much less robust type of security compared to other forms of scanning systems
* RFID is a restriction in managing the updates of stocks during the transportation of products
* RFID can be too expensive for many applications compared to other tracking and identification methods
* RFID tags have a limited amount of memory and are less effective than other product tracking systems
* It is difficult for an RFID reader to read the information where tags are installed in liquid or metal products
* Interference has been observed to take place in RFID systems when devices such as hand-held, portable, two-way radios are in use
* RFID provides a much less robust type of security compared to other forms of scanning systems
* RFID is a restriction in managing the updates of stocks during the transportation of products
Correct Answer: B
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A company does not have enough space to hold inventory to satisfy an external foreign market. Therefore, the board of directors has decided that the company would buy stock in bulk and pay a fee for storage to a third- party warehouse provider local to the foreign market. This would allow the company to focus on other aspects of the business. The stock will be called off as and when required. Which of the following strategies is being pursued by this company?
Correct Answer: D
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A procurement manager has been asked to justify the purchase of a large piece of capital equipment valued at
£500,000 to internal stakeholders. The procurement manager decided to prepare the justification using a comprehensive formal business case due to the value of the purchase. Were they correct in doing this?
£500,000 to internal stakeholders. The procurement manager decided to prepare the justification using a comprehensive formal business case due to the value of the purchase. Were they correct in doing this?
Correct Answer: C
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Which of the following is the definition of work in progress inventory?
Correct Answer: B
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When designing the layout of a warehouse or stores area, one of the factors to consider is the width of the aisles between the racking. Which of the following is a main consideration when calculating the aisle width?
Correct Answer: C
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The managing director requires action to be taken to improve the organization's profitability and has asked for suggestions to enable this to be achieved. The procurement manager has said that a just-in-time (JIT) system should be introduced. Would such a system improve profitability?
Correct Answer: D
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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?
Correct Answer: B
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