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CIPS L4M7 Exam Questions
- Topic 1: Explain the use of product coding in inventory operations/ Order tracking technologies
- Topic 2: Systems for product coding/ Bar coding/ The use of RFID technologies
- Topic 3: Environmental standards for packaging/ Materials handling equipment
- Topic 4: The use of automation in warehousing/ Palletisation and unit loads
- Topic 5: Opening stock, work in progress, safety stock and finished goods/ Obsolescent and redundant stock Dependent demand and independent demand itemsof stock/ ABC classifications of stock that may apply
- Topic 6: Understand the key elements of effective inventory control/ Factors that influence stores and warehouse layout
- Topic 7: Contrast the impact of the use of different warehousing equipment/ Understand methods for the storage and movement of inventory
- Topic 8: Discuss options to reduce costs whilst mitigating any negative impact on service levels/ Location of stores and warehouses
- Topic 9: Identify the principles, purpose and impact of stores and warehouse design/ Identify the direct and indirect costs of holding inventory
- Topic 10: Hidden costs – global sourcing, risks associated with extended supply chain/ Cross functional support – ensure access to data
- Topic 11: Ensure senior management support/ Use best estimates of values available/ Identify the contributing elements to end-of-life costs
- Topic 12: Differentiate between the different classifications of inventory/ Identify techniques associated with inventory control
Free CIPS L4M7 Exam Actual Questions
Note: Premium Questions for L4M7 were last updated On Jan. 21, 2025 (see below)
A construction organization requires specialist equipment for digging deep foundations. Which of the following circumstances would result in the hire of equipment rather than leasing it?
A. The finance available and the potential profits available on the eventual sale of the leased equipment compared to hire costs B. The expected frequency of use, the storage available, and the lease cost of the equipment compared to hiring it C. The subjective assessment of multiple factors for both hire and lease by the directors D. The results of a discounted cost analysis using comparative weekly payments for both hire and lease options
Hiring is often preferred when:
Frequency of use is low: If equipment is only needed occasionally, hiring is more economical.
Storage is unavailable: Leased equipment needs storage, which incurs additional costs.
Lease costs exceed hiring costs for limited use.
Whole-life asset management emphasizes cost-efficient solutions, and hiring equipment for limited use reduces unnecessary expenses compared to leasing or purchasing.
Which of the following are objectives of Just-in-Time (JIT) in the control of inventory? Select TWO that apply.
To reduce the possible effect of stockout situations by increasing the level of buffer stocks
To have sufficient safety stock to cover shortages due to the extension of lead time
To ensure that products are free from defects and meet the quality expectations of the customer
To reduce work-in-progress, finished goods, and sub-assembly inventories to zero
To ensure that the cost of holding inventory is directly proportional to the value of the inventory
A. 1 and 2 only B. 2 and 3 only C. 3 and 4 only D. 4 and 5 only
Just-in-Time (JIT) aims to:
Improve quality by ensuring defect-free products that meet customer expectations.
Reduce inventory levels: The JIT approach minimizes holding costs by producing and delivering goods as needed.
Whole-life asset management values JIT for optimizing inventory control, reducing waste, and enhancing quality while keeping storage costs minimal.
Amanda is the purchasing manager for AB Construction based in France. She is considering purchasing an asset from overseas but knows she must account for fluctuations in exchange rates in the contract. Is Amanda correct?
Including a currency fluctuation clause protects against exchange rate volatility, which can increase the final cost if the currency depreciates. Whole-life asset management often incorporates such risk management measures to ensure cost predictability and avoid unanticipated financial impact on long-term projects.
Practice of unloading goods from inbound delivery vehicles and loading them directly onto out-bound vehicles is known as ...?
Cross-docking is the practice of unloading goods from inbound delivery vehicles and loading them directly onto outbound vehicles. By eliminating or minimizing warehouse storage costs, space requirements and inventory handling, cross-docking can streamline supply chains and help them move goods to market faster and more efficiently.
Cross-docking usually takes place in a dedicated docking terminal in a warehouse, where inbound goods are first received at a dock and sorted according to their final destinations. They are then moved to the other side of the dock via forklift, conveyor belt or other equipment and loaded on outbound vehicles.
Cross-docking works best with products that need to be transported quickly, such as food, that have already been sorted and labeled for customers, do not need quality inspections or have steady demand.
- CIPS study guide page 16
- Cross-docking
LO 1, AC 1.1
PPC Refinery (UK) must close down an out-of-date refinery which has very poor environmental performance. The refinery is very sophisticated with many technically complicated machineries, lubricants, coolants and other chemical substances. Decommissioning the refinery is highly risky and hazardous. To manage the decommissioning process well, PPC project team must know these machineries and substances in details. Which document can provide the technical details on the refinery?
Decommissioning or disposal should start with the original specifications of the assets so that the organisation and supplier can make an appropriate plan. Some specifications also mention the is-sues regarding to end-of-life environmental factors.
LO 3, AC 3.3
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