CIPS L4M7 Exam Practice Test Instant Access

Question 1

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 2

A procurement manager is sourcing some high-value equipment for their organisation. What are the elements comprising whole-life costing that they need to consider?

AAcquisition, purchase, usage, and end-of-life costs

BAcquisition, purchase, maintenance, and indirect costs

CProduct pricing, contract admin, and staffing costs

DPurchase pricing, usage, and sales costs

Answer : A

Whole-life costing includes all costs from acquisition to disposal, ensuring comprehensive financial planning. Essential components include:

Acquisition and purchase costs: Initial costs incurred to procure the equipment.

Usage costs: Operational expenses, including energy and consumables.

End-of-life costs: Disposal, recycling, or decommissioning expenses.

Whole-life asset management aims to minimize these costs over an asset's lifecycle, ensuring value and performance.

Question 3

Which of the following would be considered independent demand items of stock for a supplier that is manufacturing laboratory imaging equipment? Select TWO that apply.

AOffice consumables for the organisation

BEnergy consumption for the organisation

CCompleted finished goods

DRaw materials required for production

EMachinery spares for the production lines

Answer : A, C

Question 4

Hi-Tech Products Inc. (HTP) has just opened a new state-of-the-art distribution centre. It has invested heavily in new technology that will help manage, store, and identify stock items and their locations quickly and continuously. Its investment uses wireless technology. HTP will be using which of the following?

ARadio Frequency Identification (RFID)

BABC classification management

CHandheld scanning devices

DBarcodes

Answer : A

Question 5

SpeedyCar GmbH is a vehicle manufacturer that is launching a new electric vehicle onto the market, replacing a previous diesel vehicle. There is a lot of equipment in the manufacturing site to be changed, some new machinery to replace older machinery, and some production equipment to decommission. The costs of decommissioning would include which of the following?

ACosts to upgrade electric vehicle charging facilities

BDecontamination and cleaning costs for site areas

CSales and marketing costs of the new electric vehicle

DEngineering drawing fees for the new electric vehicle designs

Answer : B

Question 6

Which of the following best describes the term 'periodic review'?

AItems are reviewed and orders placed depending on requirements

BItems are reviewed when the Kanban is triggered

CItems are reviewed when the price is at its lowest

DItems are reviewed as part of an imprest system

Answer : D

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 imprest system is a form of financial accounting system. The most common imprest system is the petty cash system. The base characteristic of an imprest system is that a fixed amount is re-served, which after a certain period of time or when circumstances require, because money was spent, it will be replenished.

So the correct answer should be 'Items are reviewed as part of an imprest system'

LO 2, AC 2.3

Question 7

The only reason stocks become obsolete is because items have been held in stock for a very long time. Is this a valid statement?

AYes, because all obsolete items result from significant overstocking

BYes, because users assume that the items are no longer in stock

CNo, because stock held for a long time are called buffer stocks

DNo, because some items can become obsolete because of changes in consumer needs

Answer : D

CIPS Whole Life Asset Management L4M7 Exam Practice Test