L4M7 Certification Exam Questions with AI Explanations

QUESTION: 21

Which of the following statements is true?

All indirect supplies are independent demand items
Number of independent demand items may be derived from the forecast
Dependent demand items are not directly correlated with production rate
Car engine is an example of independent demand items in a car assembly plant

Answer(s): B

Explanation:

Dependent demand is the requirement for stock item which is directly related to and therefore de- pendent upon the rate of production (examples are: raw materials, components, energy). Independent demand is the requirement for stock item which is not directly related to, and is therefore independent of rate of production.
'Number of independent demand items may be derived from the forecast': Although independent demand is called thus, it can still be influenced by economic factors external to the demand-supply model such as general consumer sentiment and consumers' available disposal income. However, businesses that need to predict the number of products with independent demand needed to sate their customers have it easier than businesses that must calculate the demand for products with dependent demand because there are fewer factors to consider. 'Dependent demand items are not directly correlated with production rate': As mentioned above, dependent demand items are directly correlated with production rate. 'All indirect supplies are independent demand items': Though most indirect supplier are inde- pendent demand, some are determined by the production rate, i.e. energy consumption of a major machinery.
'Car engine is an example of independent demand items in a car assembly plant': Car engine is a component in car which is the finished good of a car assembly plant, it is a dependent demand item.
LO 2, AC 2.1

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QUESTION: 22

Which of the following correctly describes the triple bottom line?

Professional, Planet, Profit
People, Planet, Project
People, Product, Profit
People, Planet, Profit

Answer(s): D

Explanation:

The triple bottom line is a sustainability framework that examines a company's social, environment, and economic impact (or People, Planet, Profit).

Reference:

- 25 Years Ago I Coined the Phrase "Triple Bottom Line." Here's Why It's Time to Rethink It.
- CIPS study guide page 202
LO 3, AC 3.3

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QUESTION: 23

Which of the following should be considered when an organisation plans for disposing obsolescent and redundant stock? Select TWO that apply.

Financial costs
Economic order quantity
ABC analysis
Takt time
Environmental issues

Answer(s): A,E

Explanation:

If the planning and mitigation measures fail and redundant or obsolete stock is identified, it needs to be removed from the current inventory location as quickly as possible. There are some methods to deal with these types of stock. The worst case scenario is disposal to landfill, which is inadvisable if it can be avoided, both from environment point of view and the financial costs of such disposal. For example, the problem of obsolete pesticides remains extremely serious and urgent. Many of the stocks identified continue to deteriorate thereby giving rise to an ever escalating source of severe pollution and posing a threat to human health, the environment and development in particular. To reduce the impact of obsolete pesticides on environment, FAO initiated a project in Yemen in which a total of 262 tonnes of obsolete pesticides were removed from 20 different sites and successfully disposed of between March and June 1996. The major field operation was completed in six weeks during which period almost all obsolete pesticides were brought to a central location and subsequently shipped to the United Kingdom for incineration.

Reference:

CIPS study guide page 89
LO 2, AC 2.1

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QUESTION: 24

Which of the following are the different types of inventory that a manufacturing company usually has?
1. Work in progress
2. Economic order quantity
3. Raw materials
4. Finished goods

1, 3 and 4
1, 2 and 4
2, 3 and 4
2, 3 and 4

Answer(s): A

Explanation:

The normal breakdown in a manufacturing organisation would be raw materials, components, work in progress and finished goods.
Following are the different types of inventory:

Raw materials are the basic materials that a manufacturing company buys from its suppliers, and that is used by the former to convert them into the final products by applying a set of manufacturing processes. For example, aluminum scrap is the raw material for a company that produces aluminum ingots. Flour is the raw material for a company that produces bread or pizza. Similarly, metal parts and ingots are the raw materials bought by a company that manufactures cars, and crude oil is the raw material for an oil refinery.
Work in progress inventory can also be called semi-finished goods. They are the raw materials that have been taken out of the raw materials store and are now undergoing the process of their conversion into the final products. These are the partly processed raw materials lying on the production floor. And they have also not reached the stage where they have been converted into the final product.
Finished goods are indeed the final products obtained after the application of the manufacturing processes on the raw materials and the semi-finished goods discussed above in the article. They are saleable, and their sale contributes fully to the revenue from the core operations of the company.

Reference:

- Types of Inventory
- CIPS study guide page 82-83
LO 2, AC 2.1

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QUESTION: 25

Do all types of warehouses require access to daylight to reduce the cost of electricity?

No, because only ventilation can help to reduce the humidity in the warehouse
No, because some types of stock are sensitive to sunlight
Yes, because sunlight sterilises inventories in damp conditions
Yes, because organisation's need for artificial lighting and heating will reduce

Answer(s): B

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:

CIPS study guide page 12
LO 1, AC 1.1

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CIPS Whole Life Asset Management L4M7 Dumps in PDF

Free CIPS L4M7 Real Questions (page: 23)

QUESTION: 21

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QUESTION: 22

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QUESTION: 23

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QUESTION: 24

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QUESTION: 25

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