[Oct 03, 2023] Updates Up to 365 days On Valid L4M7 Braindumps
Best QualityL4M7 Exam Questions CIPS Test To Gain Brilliante Result
The CIPS Whole Life Asset Management certification program is ideal for asset management professionals, including engineers, project managers, procurement professionals, and facilities managers. It is also suitable for individuals who are responsible for managing assets in industries such as transportation, utilities, manufacturing, and construction.
NEW QUESTION # 65
Which of the following lists all components, ingredients, and materials required to produce the final product?
- A. Engineering change notice
- B. Master schedule
- C. Purchase order
- D. Bill of materials
Answer: D
Explanation:
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.
Reference:
LO 2, AC 2.3
NEW QUESTION # 66
Which of the following is the correct statement about total ordering cost?
- A. Rise as the average stock level rises
- B. Rise as the order quantity rises
- C. Equal the number of orders placed times the cost of placing an order
- D. Fall with the per period usage rate
Answer: C
Explanation:
Typically, ordering costs include expenses for a purchase order, labor costs for the inspection of goods received, labor costs for placing the goods received in stock, labor costs for issuing a supplier's invoice and labor costs for issuing a supplier payment. These costs are irrelevant from the size of the order and are incurred every time a firm places an order.
The total ordering cost will be equal to ordering cost per order multiply with number of orders.
Reference:
LO 2, AC 2.2
NEW QUESTION # 67
XYZ Ltd is a large retailer who offers a range of products with different margins. The warehouse manager suggests that different product groups should have different level of safety stock. The appropriate level of safety stock is typically determined by...?
- A. Carrying sufficient safety stock so as to eliminate all stockouts
- B. Choosing the level of safety stock that assures a given service level
- C. Taking the square root of the economic order quantity
- D. Expected stockout cost multiplies with product margin
Answer: B
Explanation:
Safety stock is the stock held as a contingency or insurance against disruption or unexpected de-mand. Holding safety stock reduces the risks of stockouts, when an organisation is unable to meet an order or continue production due to lack of finished goods or input materials.
For single items, an extra investment in inventory (higher levels of safety stock) will always in-crease customer service levels. Conversely, higher service levels imply larger quantities of safety stocks and an increased investment in inventory. (Procurement and Supply Chain Management - 9th Edition) However, high levels of safety stocks also increase the inventory cost. There must be a balance between inventory costs and customer service. Thus, calculating the should-be safety stock based on a determined service level has long been recommended by many professionals.
Reference:
LO 2, AC 2.2
NEW QUESTION # 68
Lean principle focuses on eliminating eight types of waste. Waste in Lean manufacturing is defined as...?
- A. Rejection of material because of quality related problems
- B. Part of activity when operator is idle
- C. Part of any activity which is inevitable
- D. Non value-adding steps in a process
Answer: D
Explanation:
Lean thinking aims to remove wastes from work processes. Before diving into the 8 wastes, it is important to understand what waste is. Waste is any action or step in a process that does not add value to the customer. In other words, waste is any process that the customer does not want to pay for.
The original seven wastes (Muda) was developed by Taiichi Ohno, the Chief Engineer at Toyota, as part of the Toyota Production System (TPS). The seven wastes are Transportation, Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects. They are often referred to by the acronym 'TIMWOOD'. The 8th waste of non-utilized talent or 'Skills' of workers was later introduced in the 1990s when the Toyota Production System was adopted in the Western world. As a result, the 8 wastes are commonly referred to as 'TIMWOODS'.
Source: The lean way
Reference:
LO 2, AC 2.3
NEW QUESTION # 69
International Standard Book Number (ISBN) is a unique international identification system for each product form or edition of a monographic publication published or produced by a specific publisher. ISBN is an example of...?
- A. Harmonized system
- B. Industry standard code
- C. Check digit
- D. Own product code system
Answer: B
Explanation:
The International Standard Book Number (ISBN) is a numeric commercial book identifier which is intended to be unique. Publishers purchase ISBNs from an affiliate of the International ISBN Agency. ISBN is standardised by ISO 2108:2017. ISBN is an example of industry standard code as it applies to commercial books around the world.
Check digits are additional numbers or characters added to codes that a computer uses to verify the number is valid. The intention is to reduce the likelihood of miskeying an item and hitting an alternative live item. More often, a system is devised which a computer can calculate using combination of numbers.
Own product code system: an organisation will use its own product code system. This has the ad-vantage that the organisation can construct a code that is effective and fits with its software and variety of items covered.
The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of tariff nomenclature is an internationally standardized system of names and numbers to classify traded products. It came into effect in 1988 and has since been developed and maintained by the World Customs Organization (WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization based in Brussels, Belgium, with over 200 member countries.
Reference:
LO 1, AC 1.2
NEW QUESTION # 70
Which of the following costs does the EOQ minimise?
- A. Total cost of safety stock
- B. Total cost of annual inventory cost
- C. Total cost of carrying stock
- D. Total cost of ordering inventory
Answer: B
Explanation:
Economic order quantity (EOQ) was developed in 1913 by Ford W.
Harris and has been refined over time. The formula assumes that demand, ordering, and holding costs all remain constant. The EOQ minimizes the total annual inventory cost.
EOQ formula is as follow:
LO 2, AC 2.3
NEW QUESTION # 71
Which of the following is essential to effective implementation of just-in-time?
- A. No need for smoothing production
- B. Regular machine changeovers
- C. Larger warehouse for larger amount of inventory
- D. Strong links between the suppliers and the buying organisation
Answer: D
Explanation:
For JIT manufacturing to succeed, companies must have steady production, high-quality workmanship, glitch-free plant machinery, and reliable suppliers.
JIT production systems cut inventory costs because manufacturers do not have to pay storage costs. Manufacturers are also not left with unwanted inventory if an order is canceled or not fulfilled.
Reference:
- Just in Time (JIT)
- CIPS study guide page 122-124
LO 2, AC 2.3
NEW QUESTION # 72
What is meant by the term 'obsolete stock'?
- A. Stock which has become outdated
- B. Stock which has been stolen
- C. Low value/low risk stock
- D. Damaged stock
Answer: A
Explanation:
Obsolescent stock is stock, usually finished goods, which is in good condition and satisfactory working but for which demand is irreversibly falling towards zero. Once this demand reaches zero the stock can be considered 'obsolete'. It cannot be used or sold in its current state. Food ingredients (like candy canes) which are out of date are another example.
Reference:
LO 2, AC 2.1
NEW QUESTION # 73
The width of aisles within a warehouse is determined by...?
- A. The length of storage racking
- B. Turning cycle of forklift and the size of pallets
- C. The location of goods-in and goods-out doors
- D. The height of the building
Answer: B
Explanation:
Below is a formula from Toyota you can use to make an informed decision.
1. Start with the basic right-angle stacking width
2. Add the load length
3. Add 12 inches for clearance
The basic right-angle stacking width is the smallest amount of space a forklift needs turn in order to insert its forks into a pallet. You can find basic right-angle stack measurements in the equipment manual or by contacting TMHNC if your business is located in Northern California. This measurement does not include the length of the load or room need for clearance.
Load lengths vary depending on your application, products, etc. As a starting point, a standard pallet has a 48-inch load length. Always check your forklift's data plate for the rated capacity (which is affected by attachments and other factors).
Adding 12 inches for clearance ensures you have enough room for your forklift's turn radius and helps protect against damage from operator error and/or product that may hang over the edge of the pallet.
Reference:
- CIPS study guide page 29-30
- How to Calculate Forklift Aisle Width Minimums
LO 1, AC 1.1
NEW QUESTION # 74
With D is the annual demand (units), S is cost per order, H is annual carrying cost per unit; the formula for Economic Order Quantity is....?
- A. √(D*S/2H)
- B. √(D*S*H)
- C. √(D*S/3H)
- D. √(2D*S/H)
Answer: D
Explanation:
LO 2, AC 2.3
NEW QUESTION # 75
XYZ Ltd is a retailer in the US. Their customers' demand for Thanksgiving and Christmas decora-tions usually rises in the end of the year. This irregular demand results in more required storage space for finished goods during peak seasons. Which of the following are possible solutions for dealing with required additional space?
1. Maximising aisle width
2. Keeping high buffer stock throughout the year
3. Maximising flexibility in warehouse layout
4. Installing mezzanine floor
- A. 1 and 2 only
- B. 1 and 3 only
- C. 3 and 4 only
- D. 2 and 4 only
Answer: C
Explanation:
Possible solutions to the high irregular or seasonal demand problems are listed below:
* Take advantage of the height of the warehouse
- Mezzanine floor
- High racking system (increase storage capacity but require high-reach material handling equip-ment)
* Eliminate dead stock or inventory
* Improve material flow
* Improve storage location method
* Consider using aisle space during demand peak
* Narrow aisles between racks (require narrow handling equipment)
* Carousel-type storage system
* Auto-storage and retrievals system (ASRS)
Reference:
LO 1, AC 1.1
NEW QUESTION # 76
Which is the best definition of reorder point?
- A. The point when stock reaches zero
- B. The point at which stock will fall to zero minus lead-time
- C. The level inventory at which an order must be made
- D. The point when one unit of stock remains in stock
Answer: C
Explanation:
Reorder point is the point either in time or in a process when the next order should be placed.
Reference:
LO 2, AC 2.3
NEW QUESTION # 77
Decommissioning, removal and disposal of assets may have impact on the environment. An organisation should have policies and procedures in place to enhance its environmental performance. Which standard family provides the guidance on environmental policies and procedures?
- A. ISO 22000 family
- B. ISO 9000 family
- C. ISO 27000 family
- D. ISO 14000 family
Answer: D
Explanation:
The ISO 14000 family of standards are developed by ISO Technical Committee ISO/TC 207 and its various subcommittees. For a full list of published standards in the series see their standards catalogue. ISO 14001 provides requirements with guidance for use that relate to environmental systems. Other standards in the family focus on specific approaches such as audits, communications, labelling and life cycle analysis, as well as environmental challenges such as climate change.
ISO 27000 family of standards concerns information technology, with the goal of improving security and protecting company assets. Started in 2005, the two most popular standards are ISO 27001:2013 and 27002:2013. 27001 is management-based system, whereas 27002 is a technical document, focused on the individual and putting a code of conduct in place. Organizations can choose either standard; ISO 27001 has over 22,000 certifications worldwide. It is a broad standard, and for this reason the certification can be customized to fit the needs of the organization, and is not mandatory.
ISO 22000 sets out the requirements for a food safety management system and can be certified to it. It maps out what an organization needs to do to demonstrate its ability to control food safety hazards in order to ensure that food is safe. It can be used by any organization regardless of its size or position in the food chain.
ISO 9001 is a family of quality management standards, there are fourteen in total. Of these, ISO 9001:2015 is the only one that can be certified to. It was first published in 1987, and has since been updated about every 7 years. The standard details how to put a Quality Management System (QMS) in place to better prepare your organization to produce quality products and services. It is customer focused, and places an emphasis on continuous improvement and top management processes that extended throughout the organization.
Reference:
- ISO website
- Top 10 Most Popular ISO Standards
- CIPS study guide page 193
LO 3, AC 3.3
NEW QUESTION # 78
Do all types of warehouses require access to daylight to reduce the cost of electricity?
- A. Yes, because sunlight sterilises inventories in damp conditions
- B. Yes, because organisation's need for artificial lighting and heating will reduce
- C. No, because some types of stock are sensitive to sunlight
- D. No, because only ventilation can help to reduce the humidity in the warehouse
Answer: C
Explanation:
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.
Reference:
LO 1, AC 1.1
NEW QUESTION # 79
Which of the following are most likely the benefits of using unit loads? Select TWO that apply.
Increase transport time of each item
- A. Reduce handling cost of one unit
- B. Safer handling
- C. Unit loads must be placed on pallets
- D. Minimise space utilisation
Answer: A,B
Explanation:
The concept of a unit load is to create a stable and secure, easy-to-move group of stock that is fast to load and unload from vehicles.
The advantages of unit load concepts are as the following:
* More items can be handled at the same time, thereby reducing the number of trips required and, potentially, reducing handling costs, loading and unloading times, and product damage.
* Enables the use of standardized material handling equipment.
Reference:
LO 1, AC 1.3
NEW QUESTION # 80
Assuming that all other factors are constant except one, the net present value of a capital expendi-ture increases when...?
- A. The discounted rate increases
- B. The initial cost of a project increases
- C. Cash outflow during a time period increases
- D. Net cash flow during a time period increases
Answer: D
Explanation:
Net present value (NPV) is the 'today' net value that deprives from 'future' cash flow of an invest-ment or a capital purchase.
The following formula is used to calculate NPV
Where:
Rt is the net cash flow (cash inflow - cash outflow) during the period t i is the discount rate t is the number of time periods As you can conclude from the above formula, the net present value increases when the numerators (net cash flows) increase and/or denominators (1+i) decrease. So the correct answer should be "Net cash flow during a time period increases" The purpose of this exercise is to help you identify the factors that influence the net present value and how to increase/decrease NPV in real-world scenario.
Reference:
- Net present value in capital expenditure
- CIPS study guide page 177
LO 3, AC 3.2
NEW QUESTION # 81
Which among the following are the tools for reducing acquisition costs in purchasing?
1. Procurement card
2. Automated Storage & Retrieval System
3. Porter's value chain
4. P2P system
- A. 2 and 3 only
- B. 1 and 4 only
- C. 1 and 3 only
- D. 2 and 4 only
Answer: B
Explanation:
There are several methods to reduce the acquisition costs in procurement. L4M7 study guide lists the following methods:
- Buyer discretionary spend
- 'User buying'
- Vendor managed inventory (VMI)
- Two-bin Kanban
- Product catalogue
- e-Procurement techniques, including some systems such as ERP, procure-to-pay (P2P), e-requisition, e-tendering, etc.
- Procurement cards
Reference:
LO 3, AC 3.1
NEW QUESTION # 82
Which of the following are most likely to be the purposes of packing and packaging?
1. To bring the product cost down
2. To protect the product
3. To improve the product recognition
4. To test the product durability
- A. 2 and 3 only
- B. 1 and 4 only
- C. 3 and 4 only
- D. 1 and 2 only
Answer: A
Explanation:
It would be really convenient if we could just hand our products directly to the customers, but that's not possible. Packaging needs to be done for several reasons. Here are some of the most prominent ones:
1. Safety: Packaging is used to keep your product safe from external factors. It also prevents human tampering. If you want to sell fruit juice, you just can't hand it over to customers. It should be packaged in something, like a stand up pouch.
2. Brand visibility: You provide the best product in your category and you want your customers to remember that. How else will you do that without using the right kind of creative food packaging?
3. Bundling it together: If you want to sell an ounce of something, you need to create a packet so that the right amount is bundled together.
4. Theft prevention: If you sell your product loose, there are chances that the retailer doesn't give the right amount to the customer and saves some part for himself. There are other cases too where theft can be done in the absence of packaging.
Apart from these four, there are many other reasons why you should package your products.
Reference:
- What Is the Purpose of Packaging?
- CIPS study guide page 62
LO 1, AC 1.3
NEW QUESTION # 83
Toll Group has thousands of end-of-life IT assets that need to be disposed of. The senior manage-ment of Toll Group is largely concerned about sustainability in waste management, especially electronic waste. Before selecting a supplier to manage the process, the procurement team is required to assess the environmental risks regarding disposal of the assets. Risk assessment is basically based on the measurement of which factors?
1. Impact
2. Reward
3. Surveillance
4. Likelihood
- A. 2 and 3 only
- B. 1 and 4 only
- C. 1 and 3 only
- D. 2 and 4 only
Answer: B
Explanation:
All risk management processes follow the same basic steps, although sometimes different jargon is used to describe these steps. Together these 5 risk management process steps combine to deliver a simple and effective risk management process.
Step 1: Identify the Risk. You and your team uncover, recognize and describe risks that might affect your project or its outcomes. There are a number of techniques you can use to find project risks. During this step you start to prepare your Project Risk Register.
Step 2: Analyze the risk. Once risks are identified you determine the likelihood and consequence of each risk. You develop an understanding of the nature of the risk and its potential to affect pro-ject goals and objectives. This information is also input to your Project Risk Register.
Step 3: Evaluate or Rank the Risk. You evaluate or rank the risk by determining the risk magni-tude, which is the combination of likelihood and consequence. You make decisions about whether the risk is acceptable or whether it is serious enough to warrant treatment. These risk rankings are also added to your Project Risk Register.
Step 4: Treat the Risk. This is also referred to as Risk Response Planning. During this step you assess your highest ranked risks and set out a plan to treat or modify these risks to achieve acceptable risk levels. How can you minimize the probability of the negative risks as well as enhancing the opportunities? You create risk mitigation strategies, preventive plans and contingency plans in this step. And you add the risk treatment measures for the highest ranking or most serious risks to your Project Risk Register.
Step 5: Monitor and Review the risk. This is the step where you take your Project Risk Register and use it to monitor, track and review risks.
Reference:
- What are the 5 Risk Management Steps in a Sound Risk Management Process?
- CIPS study guide page 192-193
LO 3, AC 3.3
NEW QUESTION # 84
XYZ Inc opens a tender to purchase new forklift trucks for their new established warehouse. In the final round, there are two suppliers remain who offer two different bids. Supplier A's bid has high initial investment. After calculating the net present value, the NPV in year five is positive. On the other hand, supplier B's bid has low purchase price, with the NPV in year five is negative. If the NPV is the sole selection criterion, XYZ Inc should select the bid which has...?
- A. Negative NPV
- B. Positive NPV
- C. The lowest NPV
- D. Zero NPV
Answer: B
Explanation:
Net present value (NPV) is the 'today' net value that deprives from 'future' cash flow of an invest-ment or a capital purchase. Net Present Value is a helpful tool for assessing the total lifetime value of an investment. Procurement professionals or investors can base on this value to make decision to achieve value for money. Generally, an organisation should select the offer which has the highest NPV among their options. Preferably, the NPV of an capital investment should be positive, which means the investment eventually adds value to the business.
Reference:
LO 3, AC 3.2
NEW QUESTION # 85
MRP system is the most suitable IT system to manage which type of items?
- A. Dependent demand
- B. Fast moving components
- C. Construction projects
- D. Independent demand
Answer: A
Explanation:
Material requirement planning (MRP) is a production planning and material (inventory) control system used in manufacturing. Objectives of MRP are to ensure materials are available for production while minimising inventory and to plan production and procurement activities.
Bill of materials (BOM) is an important component of MRP. BOM is also known as product struc-turer. This lists all the items that comprise each assembly and sub-assembly that make up the final product or end item. Therefore, MRP is commonly used to manage dependent demand stock.
Reference:
LO 2, AC 2.3
NEW QUESTION # 86
......
CIPS L4M7 certification exam covers a wide range of topics related to asset management, including asset identification, acquisition and disposal, maintenance and repair, risk management, and performance measurement. L4M7 exam also covers the principles of sustainability and environmental management, which are becoming increasingly important in the management of physical assets. CIPS Whole Life Asset Management certification is suitable for professionals at all levels of asset management, from entry-level positions to senior management roles.
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