CIPS L4M7 Exam Practice Test Instant Access

Question 1

An organization might find it more beneficial to lease and use an asset over a predetermined period. After this period, the lessee has the right to secure outright ownership of the asset by paying an agreed amount; otherwise, the asset would be repossessed by the lessor. Which of the following is an advantage of leasing?

ALong-term commitment to pay installments even if not using the asset

BCosts are known and agreed in advance

CThe usage of the asset is usually capped

DThe total cost of ownership is not applicable as the asset is leased

Answer : B

Leasing allows an organization to predict costs accurately, as installment payments are pre-agreed. This makes financial planning simpler, which is especially beneficial in whole-life asset management where minimizing upfront capital expenditure is often a priority. Leasing also reduces the risk associated with asset obsolescence.

Question 2

Which of the following are warehouse layouts that allow the cross aisle to meet picking aisle at angles different from 90 degrees?

1. 'Fan' shaped layout

2. Herringbone-shaped layout

3. U-shape layout

4. L-shape layout

A1 and 2 only

B3 and 4 only

C1 and 3 only

D2 and 3 only

Answer : A

In a traditional warehouse, storage racks are arranged to create parallel picking aisles, perhaps with one or more cross aisles to allow workers to move quickly between picking aisles. This structure forces workers to travel rectilinear distances (north-south and east-west) to picking locations.

Kevin R. Gue and Russell D. Meller proposed alternative aisle designs:

- The 'Fan' shaped layout (or ''Flying V''). This layout maintains parallel picking aisles, but al-lows the cross aisle to take on a different shape. If travel begins and ends at the bottom of the V, Gue and Meller expected distance to retrieve a single pallet is 10% less in this warehouse than in an equivalent traditional design.

- The Herringbone-shaped layout (or commonly referred as Fishbone layout) combines the verti-cal picking rows of a traditional warehouse with a second set of horizontal picking rows, divided by a V-shaped diagonal alley crossing the entire warehouse. This simple modification to the typical warehouse design allows employees (e.g. a forklift driver) to increase travel speed between picking locations. Efficiency gains achieved through a layout reconfiguration would reduce picking cost up to 23% compared to an equivalent warehouse using a traditional configuration.

Reference

Aisle Design - Kevin Gue

LO 1, AC 1.1

Question 3

Do all types of warehouses require access to daylight to reduce the cost of electricity?

ANo, because only ventilation can help to reduce the humidity in the warehouse

BNo, because some types of stock are sensitive to sunlight

CYes, because sunlight sterilises inventories in damp conditions

DYes, because organisation's need for artificial lighting and heating will reduce

Answer : B

The design of a building should consider the advantages of natural light as this can reduce the cost of artificial lighting and improve the environmental performance of the building. Daylight entering the building can also help reduce heating costs. Unfortunately some stocks react badly to direct sunlight, and some stock reacts badly to extreme of temperature or may require a specific temperature for storage. Some stock may require a warmer temperature than the ambient temperature and other stocks may require cooler temperature. For example, fabric and garment are sensitive to direct sunlight as ultraviolet light catalyses a reaction between the water present in all fabrics and atmospheric oxygen to create hydrogen peroxide. This is a bleaching agent and breaks down the chemical bonds that give dyes their colour.

LO 1, AC 1.1

Question 4

A procurement manager (PM) is purchasing a piece of capital equipment that requires toxic chemicals in its operation. The PM has included end-of-life packaging costs in the whole-life costing calculation. Was it appropriate to include this?

AYes, because the chemicals will need to be packaged and labeled for correct disposal

BNo, because the disposal of chemicals at the end of life does not impact the whole-life cost

CYes, because it is better to overestimate costs upfront just in case

DNo, because the chemicals can be disposed of without any cost

Answer : A

Including end-of-life packaging costs is essential when dealing with hazardous materials, as they often require special packaging and labeling for safe disposal. Whole-life asset management considers disposal costs in the total lifecycle cost to ensure compliance with regulations and prevent environmental harm.

Question 5

The Four Counties hospital in Norway is experiencing financial pressures. The procurement team is looking for the best approach to procure patient equipment that is critical and is often required at very short notice. Which of the following techniques would allow the hospital to access the stock at short notice, but without paying for it until it is used?

ADiscounted stocking

BVolume-based pricing

CConsignment stocking

DReference indices pricing

Answer : C

Question 6

To improve the security of a warehouse, alarm systems are commonly used. Which of the following is an important part of these systems?

ASensors

BFencing

CCCTV

DLighting

Answer : A

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.

Security alarm - Wikipedia

LO 1, AC 1.1

Question 7

Holding inventory is key to ensure that an organisation can maintain production and meet customer demands. Which of the following are classes of inventory? Select THREE that apply.

ARaw material

BMachines

CFinished products

DSub-assemblies

EScrap components

FForklift trucks

Answer : A, C, D

CIPS L4M7 Whole Life Asset Management Exam Practice Test