CIPS L4M7 Exam Questions Instant Access - No Installation Required

Question 1

Removal or disposal of assets should depend on an assessment of which of the following? Select TWO that apply.

AConsumer demand for the product

BThe current rate of interest for new equipment

CLocation of the equipment and accessibility

DThe total cost of the equipment

EType of equipment and incorporated components

Answer : C, E

Question 2

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?

ATurning circle of the forklift truck and the size of the pallet being carried

BDimensional depth and height of pallet racks

COverall height of the driver's cage of the forklift truck

DDimensional length and depth of the items on a pallet

Answer : A

Question 3

Which of the following are considerations for the socially responsible aspect of the disposal of goods?

Ensuring that the public is safeguarded from the short-term and long-term effects of the disposal

Ensuring that the organisation arranging for disposal gets value for money from the disposal process

Ensuring that there is limited damage to the environment caused by the disposal

Ensuring that the disposal of goods minimizes the risk and impact to the staff and community

A1 and 3

B1 and 4

C2 and 4

D2 and 3

Answer : B

Socially responsible disposal practices prioritize:

Public safety: Protecting individuals and communities from any adverse effects related to waste disposal.

Environmental responsibility: Minimizing ecological damage through responsible disposal methods.

These practices are fundamental to whole-life asset management, which emphasizes sustainability and ethical considerations throughout the lifecycle of assets.

Question 4

When using ABC analysis to classify inventory, which factors must be considered?

1. Demand uncertainty of each item

2. Cumulative percentage of items

3. Cumulative percentage usage value of items

4. Overall inventory turnover

A2 and 4 only

B1 and 4 only

C2 and 3 only

D1 and 3 only

Answer : C

ABC analysis is applied to stock and its management. It is based loosely on the Pareto principles, better known as 80/20 rule. Pareto principle is the theory that 80% of outcome results from 20% of inputs. For example, 80% of sales are to the top 20% of customers; 80% of spend on inventory is accounted for by the top 20% of stock items.

The ABC concept is based on Pareto's law. The following steps are carried out for the ABC analy-sis.

- Step 1: Compute the annual usage value for every item in the sample by multiplying the annual requirements by the cost per unit.

- Step 2: Arrange the items in descending order of the usage value calculated above.

- Step 3: Make a cumulative total of the number of items and the usage value.

- Step 4: Convert the cumulative total of the number of items and usage values into a percentage of their grand totals.

- Step 5: Draw a graph connecting cumulative % items and cumulative % usage value. The graph is divided approximately into three segments, where the curve sharply changes its shape. This indicates the three segments A, B and C.

LO 2, AC 2.1

Question 5

XYZ Ltd is looking for new office space overseas. To keep the overhead expense minimal, it chooses leasing rather than purchasing new office. In leasing contract, which of the following costs are most likely to be attributable to the lessee?

1. Disposal costs

2. Rentals

3. Operating costs

4. Vendor selection costs

A2, 3 and 4

B1, 2 and 3

C1, 3 and 4

D1, 2 and 4

Answer : A

A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment is also leased. Since the lessee does not own the asset, it is not responsible for disposing the assets, and therefore, disposal costs are not attributable to the lessee. The lessee usually incurs rentals and operating costs. Finally, a company should treat the lease the same as other contracts, which they must qualify the supplier.

LO 3, AC 3.1

Question 6

A warehouse manager is evaluating the use of Automated Guided Vehicles (AGVs) within a repetitive task environment. After reviewing their use and price, the manager decided to invest in several AGVs. Were they correct in doing this?

AYes, as it will reduce the costs of employing labour

BNo, as it reduces the flexibility of the warehouse operations

CYes, organisations must use high-tech solutions where possible

DNo, as they are only suitable for use in non-repetitive task environments

Answer : A

Question 7

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

A2 and 3 only

B2 and 4 only

C1 and 3 only

D1 and 4 only

Answer : D

ISO 18602:2013 is about Packaging and the environment --- Optimization of the packaging system. ISO 18602:2013 specifies requirements and a procedure for assessment of packaging to ensure that the weight or volume of its material content is optimized consistent with the functions of packaging. This is one of several options for reducing the impact of packaging on the environment.

It also provides methodologies and procedures for

- determining the amount and minimization of substances or mixtures hazardous to the environ-ment, and

- determining the amount of four heavy metals (lead, cadmium, mercury, hexavalent chromium) in packaging.

The optimum balance in this standard weighs the environmental impact of losses that may happen with no packaging or inadequate packaging against the environmental impact from excess packag-ing.

The process for packaging design, including material selection, is not part of ISO 18602:2013.

The procedure for applying ISO 18602:2013 is contained in ISO 18601.

LO 1, AC 1.3

CIPS Whole Life Asset Management L4M7 Exam Questions