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L4M7 Whole Life Asset Management Questions and Answers

Questions 4

What term describes a method used to account for inventory, where the oldest produced items are recorded as sold first?

Options:

A.

Last in, last out

B.

First in, first out

C.

Last in, first out

D.

First in, last out

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Questions 5

Which of the following best defines ‘exponential moving average’?

Options:

A.

A forecasting technique where the average is calculated by dividing the sum of the val-ues by the number of values

B.

A process by which the reorder of an item is triggered by the inventory level dropping to a predetermined level

C.

A process by which a decision is taken at a period end or review point to determine how much to reorder

D.

A forecasting technique where each demand is multiplied by a weighting factor

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Questions 6

In a manufacturing organisation, which of the following explains an 'indirect' stock classification of items?

Options:

A.

Where the stock has been acquired from a distributor rather than another manufacturer

B.

Where the stock does not have to be paid for until it has been used by the manufacturer

C.

Where the stock is currently held in a warehouse owned by another organisation

D.

Where the stock is not used as part of manufacturing of the finished product

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Questions 7

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

Options:

A.

Sensors

B.

Fencing

C.

CCTV

D.

Lighting

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Questions 8

Which of the following are recognised as disadvantages of ERP systems? Select TWO that apply.

Options:

A.

High initial investment

B.

Required intensive employee training

C.

Only applied to manufacturing

D.

Lower factory efficiencies

Excluded inventory records

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Questions 9

RFID, or Radio Frequency Identification, is fast emerging as a major commercial technology. Like every new technology, it has advantages and disadvantages. An advantage of using RFID is that...

Options:

A.

It is easy to implement and requires little investment in information technology

B.

It is better than barcodes as it cannot be easily replicated, and therefore, increases the security on a product

C.

Tags only store limited data, whereas a barcode can hold unlimited data

D.

It is cheaper for many applications compared to other tracking and identification methods

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Questions 10

Your company has established the number of new warehouses it requires and the locations it wishes to build them. The next step is to think about the structural design and capacity. There are different factors to consider in getting these things correct. Which of the following factors can influence the design of a new warehouse facility?

Options:

A.

Product pricing

B.

Space utilisation

C.

Profit margin

D.

Image of the company

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Questions 11

RFID uses radio frequencies for the purpose of identification and tracking of assets. Which of the following are disadvantages of using RFID? SelectTHREEthat apply.

Options:

A.

RFID can be too expensive for many applications as compared to other tracking and identification methods

B.

RFID is a restriction in managing the updates of stocks during the transportation of products

C.

Interference has been observed to take place in RFID systems when devices such as hand-held, portable, two-way radios are in use

D.

RFID provides a much less robust type of security as compared to other forms of scanning system

E.

It is difficult for an RFID reader to read the information where tags are installed in liquid or metal products

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Questions 12

MRP software is a powerful tool for managing material requirements of manufacturing processes. To keep the software function well, an organisation must have appropriate input data. Which of the following are the inputs of MRP software? Select THREE that apply.

Options:

A.

Master production schedule

B.

Bill of materials

C.

Capacity requirement plan

D.

Payrolls information

E.

Facilities management

F.

Inventory records

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Questions 13

Holding inventory is key to ensure that an organisation can maintain production and meet customer demands. Which of the following are classes of inventory? SelectTHREEthat apply.

Options:

A.

Raw material

B.

Machines

C.

Finished products

D.

Sub-assemblies

E.

Scrap components

F.

Forklift trucks

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Questions 14

XYZ Ltd organises a meeting in order to decide on the safety stock level of a strategic material which is used in XYZ latest product - DMD. To do this, they must forecast the future demand for this new product. In the meeting, external consultants are invited to join with cross-functional team. Each person of the group anonymously replies to questionnaires and subsequently receives feedback in the form of a statistical representation of the "group response," after which the process repeats itself. The goal is to reduce the range of responses and arrive at something closer to expert consensus. XYZ Ltd is using which forecasting method?

Options:

A.

Objective forecasting technique

B.

Delphi method

C.

Holt-Winters seasonal method

D.

Time series analysis

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Questions 15

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.

Options:

A.

Extra costs for urgent transportation

B.

Cost of equipment downtime

C.

Costs for qualifying suppliers

D.

Costs of handling inventory

Costs of approving the requisition

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Questions 16

MRP system is the most suitable IT system to manage which type of items?

Options:

A.

Dependent demand

B.

Construction projects

C.

Independent demand

D.

Fast moving components

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Questions 17

A brewery sells its beer in aluminum cans. It recycles the cans by using contractors to collect and mold the used cans. This is an example of...?

Options:

A.

Closed-loop recycling

B.

Carbon recycling

C.

Open-loop recycling

D.

Reuse

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Questions 18

Which of the following represents the end-of-life cost of an asset?

Options:

A.

Payment of the suppliers' final invoice after the asset is commissioned

B.

The cost of replacing the asset if it is damaged in an accident

C.

The cost of decommissioning and scrapping the asset

D.

Disposal of waste generated from use

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Questions 19

What advantage can the use of ABC classification of stock provide in warehouse design?

Options:

A.

It allows the organisation to categorise items in alphabetical order for easier storage and retrieval

B.

It gives purchasing staff more time to concentrate on those items that have most financial benefit to the organisation

C.

It assists in deciding on the most appropriate layout, handling systems, and what type of picking system to introduce

D.

It determines where each item is to be located within the warehouse to aid inspection procedures

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Questions 20

When designing the layout of a warehouse or stores area, one of the factors to consider is the width of the aisles between the racking. Which of the following is a main consideration when calculating the aisle width?

Options:

A.

Turning circle of the forklift truck and the size of the pallet being carried

B.

Dimensional depth and height of pallet racks

C.

Overall height of the driver's cage of the forklift truck

D.

Dimensional length and depth of the items on a pallet

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Questions 21

The optimum balance in the standard ISO 18602:2013 (Packaging and the environment — Optimi-zation of the packaging system) considers which of the following factors?

1. Environmental impact of losses due to lack of packaging

2. The process for packaging design, including material selection

3. Procedures and requirements for packaging that are suitable for organic recycling

4. Environmental impact of excess packaging

Options:

A.

2 and 3 only

B.

2 and 4 only

C.

1 and 3 only

D.

1 and 4 only

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Questions 22

Stockyards are suitable for specific materials with which of the following characteristics? SelectTWOthat apply.

Options:

A.

Equipment only suited for inside storage

B.

Equipment with a long delivery lead time

C.

Items that are bulky and individually packed

D.

Small equipment that is of relatively low value

E.

Equipment that requires larger specialised handling

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Questions 23

Your employers have expanded rapidly over the past five years and have acquired a number of smaller companies in the same industry. Unfortunately, all of the companies purchased have manual inventory systems. Your employer is setting up a computerised inventory control system and wishes to ensure that all stock is classified under the appropriate headings. Under what classification would semi-finished goods be classified?

Options:

A.

Indirect inventories

B.

Direct inventories

C.

Acquisition costs

D.

Material costs

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Questions 24

Which of the following statements represent a definition for 'obsolescence' in inventory management? SelectTWOthat apply.

Options:

A.

The previous technology has been replaced

B.

The previous supplier has been replaced

C.

The usage of the items has decreased

D.

The forecasts for the items have exceeded demand

E.

The users of the items no longer need them

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Questions 25

A local hospital has a highly complex piece of medical equipment delivering proton beam therapy that only one supplier in the world manufactures. Owing to the specialist nature of the equipment, the patient waiting list is extremely long. It is therefore essential that the equipment failure downtime is kept to an absolute minimum, as it would have a negative impact on patient treatment delays. Due to the complex nature and essential need of the equipment to be in continual use, which of the followingpackages will offer the most protection in ensuring reliability and reduced downtime arising from equipment failures throughout its lifetime?

Options:

A.

A corrective maintenance package

B.

A service and maintenance included package

C.

A parts-only maintenance package

D.

A 12-month from purchase warranty package

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Questions 26

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

Options:

A.

1 and 3 only

B.

2 and 4 only

C.

1 and 2 only

D.

3 and 4 only

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Questions 27

The Four Counties hospital in Norway is experiencing financial pressures. The procurement team is looking for the best approach to procure patient equipment that is critical and is often required at very short notice. Which of the following techniques would allow the hospital to access the stock at short notice, but without paying for it until it is used?

Options:

A.

Discounted stocking

B.

Volume-based pricing

C.

Consignment stocking

D.

Reference indices pricing

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Questions 28

The selection of the correct type of material handling equipment is important. If the width of the gangway between the racking in a warehouse is 2.4 meters (8 feet), what type of material handling equipment would be suitable?

Options:

A.

Counterbalance forklift truck

B.

Narrow aisle forklift truck

C.

Hand pallet truck

D.

Reach truck

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Questions 29

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 electronicwaste. 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

Options:

A.

1 and 4 only

B.

2 and 4 only

C.

2 and 3 only

D.

1 and 3 only

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Questions 30

A meaning of 'decommissioning a piece of equipment' is to...

Options:

A.

Take the equipment out of action while undertaking maintenance

B.

Take the equipment out of action ready to perform a changeover

C.

Remove the equipment from use to prepare it for disposal

D.

Switch the power off from the equipment when not in use

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Questions 31

Which of the following is the definition of work in progress inventory?

Options:

A.

Inventory that has finished the production process

B.

Inventory introduced into production but not completed as of the stocktake date

C.

Inventory not yet introduced into the production process

D.

Obsolete inventory

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Questions 32

Which of the following is often created by each business and commonly used for the purpose of inventory management?

Options:

A.

SKU

B.

ISBN

C.

Harmonised system

D.

FDA product code

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Questions 33

Which of the following correctly describes the triple bottom line?

Options:

A.

Professional, Planet, Profit

B.

People, Planet, Project

C.

People, Product, Profit

D.

People, Planet, Profit

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Questions 34

What are the contents of master production schedule in MRP system?

Options:

A.

The investment required for production

B.

How many final products will be made and when to make them

C.

The total number of labour required to produce the final product

D.

What components and materials are and when to purchase them

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Questions 35

An organisation may incur additional costs in stockout events. Which of the following is an exam-ple of costs of inventory stockouts?

Options:

A.

The costs of storage space owned that cannot be used for other profitable purposes when inventories decrease

B.

The lost contribution margin on sales forgone as a result of customer dissatisfaction due to unavailability of goods

C.

The costs of obsolescence and costs of insurance that change with the quantity of in-ventory held

D.

The return forgone by investing capital in inventory rather than elsewhere

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Questions 36

Which of the following is another name for scheduled (routine) maintenance?

Options:

A.

Preventative maintenance

B.

Predictive maintenance

C.

Run to breakdown

D.

Corrective maintenance

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Questions 37

Manufacturing resources planning (MRP II) was developed from material requirement planning (MRP). Which of the following is the additional input that is available in MRP II but does not ap-pear in MRP?

Options:

A.

Finance

B.

Bill of materials

C.

Master production schedule

D.

Inventory records

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Questions 38

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

Options:

A.

2 and 3 only

B.

1 and 3 only

C.

2 and 4 only

D.

1 and 4 only

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Questions 39

Which of the following best describe the function of MRP?

Options:

A.

Planning and controlling of production and finance

B.

Planning and monitoring of inventory resources

C.

Planning and monitoring of production resources only

D.

Planning and controlling of production and inventory

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Questions 40

Which of the following lists all components, ingredients, and materials required to produce the final product?

Options:

A.

Master schedule

B.

Engineering change notice

C.

Purchase order

D.

Bill of materials

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Questions 41

The minimal total cost is always achieved when there is only one warehouse. Is this statement true?

Options:

A.

No, fewer warehouse may lead to increasing transport costs

B.

Yes, because the operation cost for warehouse reaches minimal level

C.

Yes, because warehouse overheads are fully utilised

D.

No, more warehouses will reduce the cost of storage

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Questions 42

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

Options:

A.

The initial cost of a project increases

B.

The discounted rate increases

C.

Net cash flow during a time period increases

D.

Cash outflow during a time period increases

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Questions 43

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...?

Options:

A.

Expected stockout cost multiplies with product margin

B.

Choosing the level of safety stock that assures a given service level

C.

Taking the square root of the economic order quantity

D.

Carrying sufficient safety stock so as to eliminate all stockouts

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Questions 44

A manufacturing organisation has a large volume of raw material stock now viewed as redundant. Which of the following is the most appropriate process for the organisation?

Options:

A.

Scrap the stock as environmentally as possible and reorganise the warehouse

B.

Repackage and isolate the stock from the remaining stock to maximise usable space

C.

Ask the original supplier for potential return and credit or sell the stock

D.

Maintain the safety and security of the stock for potential future use

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Questions 45

A procurement manager has agreed a contract for the acquisition of a piece of capital equipment and has negotiated a staged payment contract of 30% with order, 30% on delivery, and the remaining 40% on acceptance testing. Was this the right thing to do?

Options:

A.

No, as it commits the organisation to purchasing the equipment and the supplier to deliver it

B.

Yes, as the payments can be linked directly to a specific performance milestone of the contract

C.

Yes, as it means the contract warranties are easier to change

D.

No, as it is an unfair contract term and places the supplier at a disadvantage in the contract

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Questions 46

Which of the following are typical characteristics of 2D barcodes? Select TWO that apply.

Options:

A.

Every 2D barcodes must conform international standards

B.

The 2D barcodes are machine-readable

C.

2D barcodes are exclusively used for marketing purpose

D.

2D barcodes can be read by linear scanners

E.

2D barcodes can contain more data than 1D barcodes

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Questions 47

Which of the following allow the operators to access higher levels in warehouse facility? Select TWO that apply:

Options:

A.

Carousel

B.

Grab

C.

Order picker

D.

Scissor platform

E.

Stacker crane

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Questions 48

A logistics company has a 2-story warehouse in the suburban area. The goods receiving area and dispatch area are located on the ground floor only. There is a lift connecting the two floors. The daily operations of the warehouse are quite busy. Which of the following would the best arrangement for this warehouse?

Options:

A.

Small items in tote boxes will be stored on the ground floor with forklifts and other equipment, high-usage palletised items will be stored on the first floor

B.

Medium- to low-usage palletised items will be stored on the ground floor, high-usage items will be stored on the first floor where the building administrative office is located

C.

Forklifts and other warehouse equipment will park on the ground floor, all inventories will be stored on the first floor

D.

Pallets, roller cages and other bulky items will be stored on the ground floor, smaller items in plastic tote boxes will be stored on the first floor

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Questions 49

MRP software is applied to schedule which of the following?

Options:

A.

Tax accounting

B.

Production processes

C.

Human resource management

D.

Executive meetings

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Questions 50

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

Options:

A.

Pareto curve

B.

Opitz system

C.

Forrester effect

D.

Seasonal demand

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Questions 51

A major investment bank is planning to purchase a complex banking system that will interface with multiple applications at varying times of the day. Before deploying the system, there are various levels of testing that must be performed through joint testing between the in-house team and off-shore testing consultants. The testing will be performed in a resource-constrained shared environment and managed by the on-shore development team. The costs for testing are generally classified as...?

Options:

A.

Insurance

B.

Maintenance costs

C.

Acquisition costs

D.

Purchase prices

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Questions 52

Which of the following is the most suitable container of fasteners (screws, nails, nuts and bolts,...)?

Options:

A.

Bar rack

B.

Pallet

C.

Tote box

D.

Stock cage

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Questions 53

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

Options:

A.

Financial costs

B.

Economic order quantity

C.

ABC analysis

D.

Takt time

E.

Environmental issues

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Questions 54

Which of the following would be considered independent demand items of stock for a supplier that is manufacturing laboratory imaging equipment? SelectTWOthat apply.

Options:

A.

Office consumables for the organisation

B.

Energy consumption for the organisation

C.

Completed finished goods

D.

Raw materials required for production

E.

Machinery spares for the production lines

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Questions 55

A retailer wants to improve its service level in inventory management from 95% to 97%. Which of the following is the best course of action?

Options:

A.

Increasing safety stock

B.

Expanding replenishment lead time

C.

Decreasing safety stock

D.

Holding more cycle stock

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Questions 56

Which is the best definition of reorder point?

Options:

A.

The point at which stock will fall to zero minus lead-time

B.

The point when one unit of stock remains in stock

C.

The point when stock reaches zero

D.

The level inventory at which an order must be made

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Questions 57

The width of aisles within a warehouse is determined by...?

Options:

A.

Turning cycle of forklift and the size of pallets

B.

The length of storage racking

C.

The location of goods-in and goods-out doors

D.

The height of the building

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Questions 58

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

Options:

A.

Steeper slope will reduce the chance of errors and accidents

B.

'Dual-use' docks are always the most efficient

C.

Vehicle docks only require a small area to ensure faster goods flow

D.

The dock platform is almost at the same level as the height of the trailer's rear platform

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Exam Code: L4M7
Exam Name: Whole Life Asset Management
Last Update: Nov 23, 2024
Questions: 255
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