L4M7 Exam Questions and Answers | Exam-Dumps (Page: 2)

QUESTION: 6

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....?

(D*S/2H)
(2D*S/H)
(D*S*H)
(D*S/3H)

Answer(s): B

Explanation:

LO 2, AC 2.3

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QUESTION: 7

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

Sensors
Fencing
CCTV
Lighting

Answer(s): A

Explanation:

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.

Reference:

Security alarm - Wikipedia
LO 1, AC 1.1

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QUESTION: 8

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

Items are reviewed and orders placed depending on requirements
Items are reviewed when the Kanban is triggered
Items are reviewed when the price is at its lowest
Items are reviewed as part of an imprest system

Answer(s): D

Explanation:

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

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QUESTION: 9

What is the different between gross material requirements plan (gross MRP) and a net material requirements plan (net MRP)?

The gross requirement doesn't take taxes into account, whereas the net requirement includes the tax considerations
The gross MRP includes consideration of available inventory, whereas the net MRP does not
The net MRP includes the amount of inventory on hand, whereas the gross MRP does not
The gross MRP is mostly paper-based, but the net MRP must be computerised

Answer(s): B

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. MRP software combines the master production schedule, the bill of materials and the inventory information to work out the net requirements (net MRP) of what to purchase or produce and when. These net requirements are worked out using the following equation:
Net requirements = Total requirements - Available inventory Where:
Total requirement = Gross requirements (gross MRP)
Available inventory = Inventory on hand + Units on order In the other words, Gross MRP = Net MRP + Available inventory, so the answer should be "The gross MRP includes consideration of available inventory, whereas the net MRP does not" LO 2, AC 2.3

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QUESTION: 10

The following are examples of scheduled maintenance except...

Oil changes and regular servicing
Overhauling of machine
Repair signage damage from a recent storm
Cleaning of tank

Answer(s): C

Explanation:

Scheduled maintenance is any repair and upkeep work performed within a set timeframe. It details when given maintenance tasks are performed and by whom. Scheduled maintenance may occur at repeating intervals or in response to a work request.
"Overhauling of machine" means that the machine is regularly checked and corrupted parts are replaced if needed.
"Cleaning of tank" and "Oil changes" also occur at time intervals as scheduled So the correct answer is "Repair signage damage from a recent storm"

Reference:

CIPS study guide page 158-163
LO 3, AC 3.1

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CIPS L4M7 Exam (page: 2) CIPS Whole Life Asset Management Updated on: 12-Feb-2026

QUESTION: 6

Explanation:

QUESTION: 7

Explanation:

Reference:

QUESTION: 8

Explanation:

QUESTION: 9

Explanation:

QUESTION: 10

Explanation:

Reference:

CIPS L4M7 Exam (page: 2)
CIPS Whole Life Asset Management
Updated on: 12-Feb-2026