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CIPS Whole Life Asset Management Sample Questions (Q211-Q216):

NEW QUESTION # 211
Which of the following are most likely the benefits of using unit loads? Select TWO that apply.
Increase transport time of each item

A. Minimise space utilisation
B. Unit loads must be placed on pallets
C. Safer handling
D. Reduce handling cost of one unit

Answer: C,D

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.

NEW QUESTION # 212
Assuming that all other factors are constant except one, the net present value of a capital expendi-ture increases when...?

A. Net cash flow during a time period increases
B. The initial cost of a project increases
C. The discounted rate increases
D. Cash outflow during a time period increases

Answer: A

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 # 213
In just in time production system, when is an upstream production triggered?

A. After the management team forecasts the future demands
B. When downstream operations summon the upstream production
C. When the inventory level reaches the reorder point
D. When the production workers are idle

Answer: B

Explanation:
Along with Jidoka, Just-in-time (JIT) production is one of the pillars of the two Toyota Production System. It is a production method that fundamentally changed the way large-scale production oc-curred in the 20th century, and is the basis for Lean Manufacturing (Lean for short), which is the school of thought many modern companies have modeled themselves after.
JIT production is often called a pull system because instead of using traditional push production where scheduling is done based on historical data and demand forecasting, production is scheduled based on actual customer orders. Rather than predicting demands from customers, the JIT method requires that actual customer demand exists. Production doesn't begin before an order triggers it. This system not only reduces the amount of extra inventory, but also reduces the amount of work in progress at one time.

NEW QUESTION # 214
Buffer stock is a level of stock which ...

A. is half of the actual stock that needs to be in the warehouse
B. is the maximum stock in inventory
C. is the minimum stock level below which actual stock should not fall
D. is when the physical ordering process should start to replenish used items

Answer: C

Explanation:
Buffer stock serves as a safety net to prevent stockouts by ensuring that a minimum stock level is always maintained. This strategy is essential in whole-life asset management to manage demand fluctuations and minimize the risk of supply chain disruptions.

NEW QUESTION # 215
Which ONE of the following correctly differentiates between obsolescent and redundant stock?

A. Obsolescent stock has been updated by another item but can still be used; redundant stock is no longer used by an organisation
B. Obsolescent stock is in short supply; redundant stock has no current supplier with stock available
C. Obsolescent stock has been supplied by a failed supplier; redundant stock requires quality testing before use
D. Obsolescent stock is damaged goods that need returning to suppliers; redundant stock is no longer stocked by the organisation

Answer: A

NEW QUESTION # 216
......

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