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CIPS L4M7 Exam Syllabus Topics:

Topic	Details
Topic 1	The use of automation in warehousing Palletisation and unit loads
Topic 2	Systems for product coding Bar coding The use of RFID technologies
Topic 3	Contrast the impact of the use of different warehousing equipment Understand methods for the storage and movement of inventory
Topic 4	Explain the use of product coding in inventory operations Order tracking technologies
Topic 5	Identify the principles, purpose and impact of stores and warehouse design Identify the direct and indirect costs of holding inventory
Topic 6	Environmental standards for packaging Materials handling equipment
Topic 7	Understand the key elements of effective inventory control Factors that influence stores and warehouse layout

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CIPS Whole Life Asset Management Sample Questions (Q26-Q31):

NEW QUESTION # 26
Which of the following best describes what happens when order volumes from customers increase and multiply through the supply chain?

A. Opitz system
B. Seasonal demand
C. Forrester effect
D. Pareto curve

Answer: C

Explanation:
The bullwhip effect (or Forrester effect) is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain.
Seasonal demand: consumer interest in purchasing particular products only during a specific peri-od within the calendar year.
OPITZ is a coding system used to form Groups in Group Technology philosophy of Manufactur-ing.
The Pareto Curve is the shape created when the bars of a Pareto Chart are progressively summed and the points joined together. The final curve ends at 100% of items in the chart, which means that you can then draw a line across at 80% and 'bounce' it down to find the bar which, when combined with all bars to its left, will give 80% of all items.
Reference:
LO 2, AC 2.3

NEW QUESTION # 27
"Open stock plus purchases minus closing stock" is the formula of which of the following?

A. Revenue
B. Inventory
C. Cost of goods sold
D. Liability

Answer: C

Explanation:
The amount of closing stock (properly valued) is used to arrive at the cost of goods sold in a periodic inventory system with the following calculation:
Opening stock + Purchases - Closing stock = Cost of goods sold
Reference:
- CIPS study guide page 130-131
- Closing stock definition
LO 2, AC 2.3

NEW QUESTION # 28
To make loading/unloading more effective and efficient, which feature should be included in vehi-cle dock design?

A. 'Dual-use' docks are always the most efficient
B. Vehicle docks only require a small area to ensure faster goods flow
C. The dock platform is almost at the same level as the height of the trailer's rear platform
D. Steeper slope will reduce the chance of errors and accidents

Answer: C

Explanation:
Warehouse dock is a feature of warehouse design - used for unloading and loading vehicles. It is crucial to carefully design where they are externally located in a facility and choose the best type of dock depending on the available space.
In many cases efficient and effective loading and unloading is achieved by a dock design that places the loading and unloading vehicle' rear platform at the same height as the warehouse floor.
Slopes in docking areas must always be as small as possible: the gentler the slope, the less chance of errors and accidents. If a warehouse is going to be used by large volume vehicles, such as high cubes, it may be necessary to install special devices, such as hydraulically adjustable docks or ground level lift platforms.
Current trends indicate that vehicles that are longer and wider and have a greater volume will be increasingly common. Therefore, when planning the location of the docks, it would be useful to ensure that there is a large area for the approach, manoeuvring and build-up of large vehicles.
One option to increase the efficiency of the docks is to combine reception and dispatch into a single area (dual use). This solution drastically reduces costs and, above all, increases the use of handling equipment and personnel. However, if this is justified by the volume of material flows, there can also be separate access points for each function (some for reception and others for dispatch - 'sole use').
Reference:
- Warehouse docking areas - Interlake
- CIPS study guide page 13
LO 1, AC 1.1

NEW QUESTION # 29
A manufacturer is making a plan for strategic safety stock. To do so, they must analyse the proba-bility of a stock out occurring and the cost impacts if it does. Which of the following are typical costs the manufacturer may incur in 'out of stock' event? Select TWO that apply.

A. Costs for qualifying suppliers
B. Cost of equipment downtime
C. Extra costs for urgent transportation
D. Costs of handling inventory

Answer: B,C

Explanation:
Costs of approving the requisition
Explanation:
The costs of stockouts - the costs of being out of inventory - include:
- Loss of production output
- Costs of idle time and of fixed overheads spread over a reduced level of output
- Costs of any action taken to deal with the stockout, such as buying from another stockist at an enhanced price, switching production, obtaining substitute materials
- Loss of customer goodwill due to the inability to supply or late delivery.
(Procurement and Supply Chain management - 9th Edition, K.
Lysons and B. Farrington, 2016) LO 2, AC 2.2

NEW QUESTION # 30
PPC Refinery (UK) must close down an out-of-date refinery which has very poor environmental performance. The refinery is very sophisticated with many technically complicated machineries, lubricants, coolants and other chemical substances. Decommissioning the refinery is highly risky and hazardous. To manage the decommissioning process well, PPC project team must know these machineries and substances in details. Which document can provide the technical details on the refinery?

A. Corporate social responsibility policy
B. Non-disclosure agreement
C. Original specifications
D. Code of Conduct

Answer: C

Explanation:
Decommissioning or disposal should start with the original specifications of the assets so that the organisation and supplier can make an appropriate plan. Some specifications also mention the is-sues regarding to end-of-life environmental factors.
Reference:
LO 3, AC 3.3

NEW QUESTION # 31
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