CIPS L4M7 Exam Questions Instant Access - No Installation Required

Question 1

A manufacturer has discovered that some of the stock in its storeroom is obsolete and now wishes to take the appropriate action. Should the manufacturer write the stock off?

ANo, the best approach would be to leave the stock where it is

BYes, as it has no value it must be written off

CYes, this will increase the sales for the period

DNo, it should be included with the closing stock

Answer : B

Question 2

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.

ARFID can be too expensive for many applications as compared to other tracking and identification methods

BRFID is a restriction in managing the updates of stocks during the transportation of products

CInterference has been observed to take place in RFID systems when devices such as hand-held, portable, two-way radios are in use

DRFID provides a much less robust type of security as compared to other forms of scanning system

EIt is difficult for an RFID reader to read the information where tags are installed in liquid or metal products

Answer : A, C, E

Question 3

Which ONE of the following correctly differentiates between obsolescent and redundant stock?

AObsolescent stock is in short supply, redundant stock has no current supplier with stock available

BObsolescent stock is damaged goods that need returning to suppliers, redundant stock is no longer stocked by the organization

CObsolescent stock has been updated by another item but can still be used, redundant stock is no longer used by an organization

DObsolescent stock has been supplied by a failed supplier, redundant stock requires quality testing before use

Answer : C

Obsolescent stock refers to items that are outdated but may still have some use. Redundant stock, on the other hand, is no longer useful or required by the organization. Effective whole-life asset management requires identifying and managing both types of stock to minimize waste and optimize storage.

Question 4

What is meant by the economic life of an asset?

AIt is the age beyond which it is not worth keeping an asset from a cost point of view

BIt is the point beyond which it is not possible to find anyone who has the skills to operate the asset

CIt is when the asset's effective performance is below the standard required by the organisation

DIt is the point beyond which it is not possible to obtain any spare parts for the asset

Answer : A

Question 5

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 pur-chased according to the bill of materials. These components are known as which of the following?

AIndirect items

BCapital goods

CDependent demand items

DIndependent forecast items

Answer : C

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.

LO 2, AC 2.1

Question 6

Which of the following lists all components, ingredients, and materials required to produce the final product?

AMaster schedule

BEngineering change notice

CPurchase order

DBill of materials

Answer : D

Master production schedule (MPS) plans items that have ''direct'' demand, or ''independent de-mand.'' With independent demand, the demand comes from sales orders, service orders, or fore-casts, and the demand comes directly from customer---or forecasted---requirements. It is the list that provides the timing of the production schedule and shows how much each machine can produce, how many shifts are used, etc.

A bill of materials (BOM) is a comprehensive inventory of the raw materials, assemblies, subas-semblies, parts and components, as well as the quantities of each, needed to manufacture a product.

LO 2, AC 2.3

Question 7

Which of the following factors should be considered in the choice of a warehouse location?

The type of barcoding that is used

The impact of local authority bylaws and regulations

The number of forklifts to be used

The nature of the items to be stored

A2 and 3 only

B1 and 3 only

C2 and 4 only

D1 and 2 only

Answer : C

Key considerations in choosing a warehouse location include:

Local regulations: Compliance with bylaws and other local authority requirements.

Nature of items stored: Warehouses for perishable or hazardous items may have specific location requirements.

These factors ensure the warehouse is compliant and suitable for the type of inventory stored, optimizing safety and operational efficiency, both crucial in whole-life asset management.

CIPS Whole Life Asset Management L4M7 Exam Questions