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NEW QUESTION # 123
What advantage can the use of ABC classification of stock provide in warehouse design?
- A. It assists in deciding on the most appropriate layout, handling systems, and what type of picking system to introduce
- B. It allows the organisation to categorise items in alphabetical order for easier storage and retrieval
- C. It gives purchasing staff more time to concentrate on those items that have most financial benefit to the organisation
- D. It determines where each item is to be located within the warehouse to aid inspection procedures
Answer: A
NEW QUESTION # 124
Which of the following allow an organisation to have more flexible space for storage by leveraging the facilities of other parties? Select TWO that apply.
- A. Temporary warehousing
- B. Installing double-deep pallet racking
- C. Eliminating dead stock or inventory
- D. Consignment stocking
- E. Adopting carousel-type storage
Answer: A,D
Explanation:
Temporary warehousing (or 'Very short-term warehousing') is offered in the market where organ-isation makes their requirements for space open online to offers or bids for available space. This appears to be an emerging market and service providers in the UK and USA typically quote a price per pallet per week with some also requiring a 'transaction fee' for movements of each pallet in and out.
Consignment stocking is a facility offered by a supplier to a buyer to allow a delivery of stock to the buyer with payment only after it is used or sold to a customer.
Double-deep pallet racking and carousel-style storage are two tools that leverage space within a warehouse:
Double-deep pallet rack
Carousel style storage
Reference:
LO 1, AC 1.1
NEW QUESTION # 125
XYZ Ltd is a highly profitable leading industrial distributor with over 60,000 products and an enviable record for customer service. After undertaking preliminary discussions it was decided to analyse the value-adding activities that contribute to XYZ's flagship products. The company is conducting which of the following activities?
- A. Silo-working
- B. Kanban
- C. Postponement
- D. Value stream mapping
Answer: D
Explanation:
According to Hines and Rich, value stream refers to specific parts of the firms that actually add value to the specific product or service under consideration. XYZ Ltd is mapping the value stream by analysing the value-adding activities that contribute to their most important product.
Postponement is a business strategy which maximizes possible benefit and minimizes risk by delaying further investment into a product or service until the last possible moment. An example of this strategy is Dell Computers' build-to-order online store. One of the earliest references to the concept was in a paper by Zinn and Bowersox in the Journal of Business Logistics. They highlighted five types: Labelling, Packaging, Assembly, Manufacturing and Time postponements.
Kanban (signboard or billboard in Japanese) is a scheduling system for lean manufacturing and just-in-time manufacturing (JIT). Taiichi Ohno, an industrial engineer at Toyota, developed kanban to improve manufacturing efficiency. Kanban is one method to achieve JIT. The system takes its name from the cards that track production within a factory. For many in the automotive sector, kanban is known as the "Toyota nameplate system".
Put simply, silo working occurs when several departments or groups within that organisation do not want to share information or knowledge with other individuals they work with.
Reference:
LO 2, AC 2.3
NEW QUESTION # 126
In ABC analysis, category C is also known as...?
- A. Long tail spend
- B. Capital expense
- C. Indirect spend
- D. Direct spend
Answer: A
Explanation:
Tail Spend is derived from ABC Analysis, Class A high value suppliers, Tail Spend is formed from class B & C suppliers, equates to 20% of the total spend, B is Mid Tail and C is Long tail. Effective Spend Analysis and tail spend management, ensures that procurement can focus on creating an optimum and efficient sourcing strategy.
Procurement Spend Analysis
Procurement organisations effectively identify and manage suppliers using a sourcing strategy. Tail suppliers normally have low strategic value and makes the category management, very difficult . Spend Analysis and Category Management are very closely aligned, Spend Analysis including ABC, provides the category manager, with spend visibility.
Spend Analysis and procurement metrics are used to create category plans, build supplier relation-ships, to maintain service levels and deliver the best possible price and quality for goods and ser-vices bought. The acquisition of Spend data and subsequent Spend Analysis, provides Category Managers access to a well-structured procurement process, Reference:
LO 2, AC 2.1
NEW QUESTION # 127
For which of the following is the 'delphi method' used?
- A. Valuing stock
- B. Forecasting demand
- C. Classifying products
- D. Controlling products
Answer: B
Explanation:
Delphi method is a structured forecasting technique using a panel of experts and a number of rounds of questioning. Responses are shared after each round and the experts encouraged to recon-sider their own responses. It is intended to achieve a consensus view.
NEW QUESTION # 128
MRP software is applied to schedule which of the following?
- A. Production processes
- B. Executive meetings
- C. Human resource management
- D. Tax accounting
Answer: A
Explanation:
Material Requirements Planning (MRP) software manages material requirements for manufacturing processes.
LO 2, AC 2.3
NEW QUESTION # 129
Hi-Tech Products Inc. (HTP) has just opened a new state-of-the-art distribution centre. It has invested heavily in new technology that will help manage, store, and identify stock items and their locations quickly and continuously. Its investment uses wireless technology. HTP will be using which of the following?
- A. Handheld scanning devices
- B. Barcodes
- C. Radio Frequency Identification (RFID)
- D. ABC classification management
Answer: C
NEW QUESTION # 130
Which is the best definition of reorder point?
- A. The point at which stock will fall to zero minus lead-time
- B. The point when stock reaches zero
- C. The point when one unit of stock remains in stock
- D. The level inventory at which an order must be made
Answer: D
Explanation:
Reorder point is the point either in time or in a process when the next order should be placed.
NEW QUESTION # 131
A manufacturer aims at increasing the service levels to 99% from 97% through expanding the safety stock.
Safety stock can be used to accommodate which of the following?
1. Variability of stock turn
2. Variability of holding costs
3. Variability of demand
4. Variability of lead time
- A. 2 and 4 only
- B. 3 and 4 only
- C. 1 and 3 only
- D. 1 and 2 only
Answer: B
Explanation:
Safety stock is also known as buffer stock. As this name suggests, this type of stock provides some kind of
'buffer', which means safety stock will help the business to reduce the shocks induced by volatile demand or disruption on the supply chain. In other words, safety stock will reduces the probability of stockouts. The following graph would explain the reason why an organisation should have safety stock:
Chart, histogram Description automatically generated
Figure 1: Safety stock graph
As it is only the buffer against uncertainty, safety stock level should be equal to the deviation of demand or replenishment time. Safety stock should be able to accommodate variance of demand and variance of lead time.
NEW QUESTION # 132
A food processing manufacturer must be able to trace the ingredients they use and the food manufactured from those ingredients. Which of the following systems provides the opportunity for efficient traceability?
- A. Batch code for each ingredient and electronic product codes for finished products
- B. Alphanumeric product code for each ingredient and product code for finished products
- C. Order numbering for each ingredient, customer purchase order for finished products
- D. Commodity coded ingredients and barcoded finished products
Answer: A
NEW QUESTION # 133
A piece of machinery has reached the end of its manufacturing life cycle and is due to be disposed of. What is the process that must take place for this to occur?
- A. Decommissioning
- B. Inventory management
- C. Whole-life costing
- D. Commissioning
Answer: A
Explanation:
Decommissioning is the process of safely retiring equipment from use. It involves steps such as cleaning, dismantling, and responsibly disposing of the asset, especially if it contains hazardous materials. Whole-life asset management includes decommissioning as a key phase, ensuring that assets are disposed of cost- effectively and in compliance with environmental standards.
NEW QUESTION # 134
Removal or disposal of assets should depend on an assessment of which of the following? Select TWO that apply.
* The total cost of the equipment
* Location of the equipment and accessibility
* Type of equipment and incorporated components
* Consumer demand for the product
* The current rate of interest for new equipment
- A. 2 and 3 only
- B. 1 and 4 only
- C. 3 and 4 only
- D. 1 and 2 only
Answer: A
Explanation:
Asset disposal decisions should consider:
* Location and accessibility: Equipment located in hard-to-reach areas may have higher disposal costs.
* Type of equipment and components: Some equipment has specific disposal requirements, especially if it contains hazardous materials or valuable components that can be recycled.
These assessments align with whole-life asset management by identifying factors that impact disposal costs and potential environmental effects, ensuring the responsible removal of assets.
NEW QUESTION # 135
A procurement manager is sourcing some high-value equipment for their organisation. What are the elements comprising whole-life costing that they need to consider?
- A. Acquisition, purchase, usage, and end-of-life costs
- B. Acquisition, purchase, maintenance, and indirect costs
- C. Purchase pricing, usage, and sales costs
- D. Product pricing, contract admin, and staffing costs
Answer: A
Explanation:
Whole-life costing includes all costs from acquisition to disposal, ensuring comprehensive financial planning.
Essential components include:
* Acquisition and purchase costs: Initial costs incurred to procure the equipment.
* Usage costs: Operational expenses, including energy and consumables.
* End-of-life costs: Disposal, recycling, or decommissioning expenses.
Whole-life asset management aims to minimize these costs over an asset's lifecycle, ensuring value and performance.
NEW QUESTION # 136
When deciding on the storage facilities and locations, an organisation needs to assess the current situation comprehensively and forecast the future demands. Quantitative analysis is the best method for these activities. Is this statement true?
- A. Yes, quantitative analysis provides a reality based on numerical values
- B. No, some intangible information is difficult to collect and measure
- C. Yes, quantitative analysis is easy to implement as it is based on 'hard' facts
- D. No, subjective judgements are the best as they compensate for weaknesses of quantita-tive analysis
Answer: B
Explanation:
Decisions regarding stores and warehouse locations involve a complex range of issues that are unique to each business. Most storage facilities and location decisions are based on a combination of qualitative and quantitative analysis.
Qualitative analysis uses subjective judgment to analyze a situation based on non-quantifiable in-formation, such as potential markets for new products, forecast on possible risks that may happen, etc.
Quantitative analysis (QA) is a technique that uses mathematical and statistical modeling, meas-urement, and research to understand behavior. Quantitative analysts represent a given reality in terms of a numerical value. This may include the following:
- Cost analysis for the current premises and future predictions based on current premises
- Cost analysis for routine operations
- Current inventory performance measures: lead times, service levels, rate of stock turn, stock-outs in a given period and stock cover To get a big picture of current situation and future demands, organisation should combine both qualitative and quantitative methods so that useful information is achieved and well-informed decisions are made.
Reference:
LO 1, AC 1.1
NEW QUESTION # 137
Which of the following correctly describes the triple bottom line?
- A. People, Planet, Project
- B. Professional, Planet, Profit
- C. People, Product, Profit
- D. People, Planet, Profit
Answer: D
Explanation:
The triple bottom line is a sustainability framework that examines a company's social, environment, and economic impact (or People, Planet, Profit).
NEW QUESTION # 138
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