L4M7 Revolutionary Guide To Exam CIPS Dumps
L4M7 Free Study Guide! with New Update 297 Exam Questions
CIPS L4M7 Certification Exam is an ideal choice for professionals who are looking to enhance their career prospects in the asset management sector. CIPS Whole Life Asset Management certification can provide professionals with the necessary skills and knowledge to effectively manage assets across a range of industries, including manufacturing, construction, and infrastructure. Additionally, the certification demonstrates a commitment to professional development and can help professionals stand out in a competitive job market. Overall, the CIPS L4M7 Certification Exam is an excellent choice for professionals who want to broaden their knowledge and expertise in asset management, and who are looking to take their career to the next level.
NEW QUESTION # 101
Extra units that are held in inventory to reduce the risks of stock-out are called...?
- A. Demand variance
- B. Reorder point
- C. Just-in-time
- D. Safety stock
Answer: D
Explanation:
The safety stock (or buffer stock) is the stock level that limits stock shortages due to unforeseen events (forecasts not in line with demand, longer than expected supply time, etc...) Demand variance is the degree to which the demand in a fixed period deviates from the average demand of the same period.
A reorder point is the unit quantity on hand that triggers the purchase of a predetermined amount of replenishment inventory.
The just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders from suppliers directly with production schedules.
NEW QUESTION # 102
Is it correct to state that the accuracy of demand forecasts depends on the accuracy of the available information?
- A. Yes, and that information can only be verified and approved by the suppliers
- B. No, considerations such as the skill and objectivity of the forecasters are always more important
- C. No, the only information determining the accuracy of demand forecasts is extracted from stock issue notes
- D. Yes, including other considerations such as the validity and reliability of the information
Answer: D
Explanation:
Demand forecasting accuracy relies on the validity and reliability of available data. Forecasting is strengthened when information sources are credible, accurate, and consistently updated. In whole-life asset management, precise forecasting minimizes excess inventory and aligns inventory levels with demand, reducing holding costs and improving supply chain efficiency.
NEW QUESTION # 103
Which of the following are considerations for the socially responsible aspect of the disposal of goods?
1. Ensuring that the public is safeguarded from the short-term and long-term effects of the disposal
2. Ensuring that the organisation arranging for disposal gets value for money from the disposal process
3. Ensuring that there is limited damage to the environment caused by the disposal
4. Ensuring that the disposal of goods minimises the risk and impact to the staff and community
- A. 2 and 4
- B. 1 and 4
- C. 1 and 3
- D. 2 and 3
Answer: C
NEW QUESTION # 104
Which of the following can replace pallets as bases for unit loads but they require push pull acces-sories to retrieve or discharge unit load?
- A. Slip sheets
- B. Skids
- C. Post pallets
- D. Shrink wraps
Answer: A
Explanation:
The system of slip sheet load handling involves the use of a thin sheet of material, the slip sheet, as a base on which items are assembled as a unit load for handling, storage, and transport. The slip sheet is used in conjunction with a pallet, if desired, at certain stages in the distribution cycle. If all lift trucks in the cycle are equipped with the proper attachment, an appropriate slip sheet is the only material handling base required. Slip sheet requires special push pull accessories and usually use thin and wide forks.
Skids are generally described as single-deck pallets and do not have bottom flatted layer which makes them less bulky and cheaper than conventional pallets but also less universal in their use.
Shrink wrap, also referred to as shrink film or shrink wrap, is a versatile polymer material used for the packaging of finished goods. Heat is applied to the film - by either a conveyor heat tunnel or an electric or gas heat gun - which catalyzes the film to shrink tightly around the item placed within. This process results in a clear, durable barrier of protection around the product.
Post pallets have a simple metal structure with four uprights and substantial feat to take the load. These may be free standing, but many are designed for the feet to interlock with the posts of another post pallet so that the stack can be created.
Reference:
LO 1, AC 1.3
NEW QUESTION # 105
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?
- A. No, as it will be better to purchase the asset in AB Construction's local currency as it would be efficient and more stable
- B. No, as the price can be re-negotiated post-contract sign-off by AB Construction and the supplier
- C. Yes, as AB Construction could pay more for the asset than intended and Amanda should include a currency fluctuation clause
- D. Yes, as Amanda will be able to decide the currency exchange rates to be used
Answer: C
Explanation:
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.
NEW QUESTION # 106
Ranger Mobile Ltd is a emerging smartphone manufacturer. The manufacturer adopts the just-in-time method: First, the customers make orders, then it will decide which components to be pur-chased according to the bill of materials. These components are known as which of the following?
- A. Dependent demand items
- B. Indirect items
- C. Independent forecast items
- D. Capital goods
Answer: A
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). The com-ponents in the scenario are dependent demand items.
Independent demand is the requirement for stock item which is not directly related to, and is therefore independent of rate of production.
Reference:
LO 2, AC 2.1
NEW QUESTION # 107
An organisation needs to determine whether to lease a piece of equipment or purchase it outright. From the following statements, which ones describe the advantages for a procurement organisation to lease rather than to purchase outright?
* Capital allowances may be set against tax, and grants may be available
* There is no initial investment which would tie up the organisation's working capital
* It would protect against technological obsolescence as equipment can be replaced as required
* The total cost may be higher than purchasing the equipment outright
- A. 2 and 5 only
- B. 3 and 4 only
- C. 1 and 2 only
- D. 2 and 4 only
Answer: C
NEW QUESTION # 108
What is the stock turn for a store holding products to the value of £250,000 with annual sales of these products amounting to £1,000,000?
- A. 0
- B. 1
- C. 0.4
- D. 0.25
Answer: B
Explanation:
Calculating Inventory Turnover (Stock Turn)
As with a typical turnover ratio, inventory turnover details how much inventory is sold over a period. To calculate the inventory turnover ratio, cost of goods (COGS) is divided by the average inventory for the same period.1 Cost of Goods Sold ÷ Average Inventory or Sales ÷ Inventory In this exercise, the stock turn equal to sales divided by inventory, or 1,000,000:250,000 = 4.
Reference:
LO 2, AC 2.3
NEW QUESTION # 109
U-shape flow layout can utilise handling equipment if the high demands items locate adjacent to shipping docks. Is this statement true?
- A. No, because cross-docking is impossible in U-shape flow warehouse
- B. No, because aisles between racks in U-shape flow are too small for any handling equipment
- C. Yes, because this layout places receiving docks and despatch docks close to one another
- D. Yes, because U-shape layout allows S-line routing more efficient
Answer: C
Explanation:
A 'U' flow occurs when the goods receipt and dispatch functions are located at the same end of a warehouse building.
Products flow in at receiving, move in to storage in the back of the warehouse, and then to shipping, which is located at the adjacent to receiving on the same side of the building.
Items with higher throughput level are located closer to the loading bays. An example of a 'U' flow design can be seen in the diagram below.
Diagram Description automatically generated
Advantages of 'U' Flow
- Excellent utilization of dock resources because the receiving and shipping processes can share dock doors
- Facilitating cross-docking because the receiving and shipping docks are adjacent to one another and may be co-mingled
- Excellent lift truck utilization because put away and retrieval trips are easily combined and be-cause the storage locations closest to the receiving and shipping docks are natural locations to house fast moving items
- Yields excellent security because there is a single side of the building used for entry and exit
NEW QUESTION # 110
Which of the following are typical characteristics of 2D barcodes? Select TWO that apply.
- A. 2D barcodes are exclusively used for marketing purpose
- B. The 2D barcodes are machine-readable
- C. 2D barcodes can be read by linear scanners
- D. 2D barcodes can contain more data than 1D barcodes
- E. Every 2D barcodes must conform international standards
Answer: B,D
Explanation:
Two-dimensional (2D) barcodes look like squares or rectangles that contain many small, individual dots. This has many different types (i.e. Data matrix, QR codes, Aztec code,...) and several different standards in use (i.
e. GS1 standards, ISO/IEC 18004:2015). It can be substituted for 1D barcode, but it has the capability to hold a larger amount of data. For examples, GS1 Data Matrix can contain 3116 Numeric characters or 2335 Alphanumeric characters while GS1-128 barcode has maximum capacity of 48 characters.
Like 1D barcodes, 2D barcodes are also machine-readable with dots/squares and spaces. They have symbology like this:
Qr code Description automatically generated
Since the code is two dimensional, conventional laser scanner can't read it. 2D barcodes require imaging scanner to read.
2D barcodes can be also used for different purposes throughout the supply chain: identifying prod-ucts/SKU (single unit, packaged or pallet), identifying content of a purchase order or delivery, identifyingthe batch number from which the item originates, identifying the manufacturer, country of origin etc, tracking status of an order, shipment or delivery
NEW QUESTION # 111
The following are examples of scheduled maintenance except...
- A. Repair signage damage from a recent storm
- B. Cleaning of tank
- C. Overhauling of machine
- D. Oil changes and regular servicing
Answer: A
Explanation:
Scheduled maintenance is any repair and upkeep work performed within a set timeframe. It details when given maintenance tasks are performed and by whom. Scheduled maintenance may occur at repeating intervals or in response to a work request.
"Overhauling of machine" means that the machine is regularly checked and corrupted parts are replaced if needed.
"Cleaning of tank" and "Oil changes" also occur at time intervals as scheduled So the correct answer is "Repair signage damage from a recent storm" Reference:
LO 3, AC 3.1
NEW QUESTION # 112
Which of the following are critical factors that must be considered when evaluating warehouse or storage locations?
* The cost of the proposed location
* Who owns the storage location or warehouse
* Access to transport networks
* The number of windows in the building
- A. 1 and 3 only
- B. 2 and 4 only
- C. 1 and 4 only
- D. 2 and 3 only
Answer: A
Explanation:
When selecting a warehouse location, it's essential to consider:
* Cost: The expense of the location directly impacts the budget.
* Access to transport networks: Proximity to transportation infrastructure facilitates efficient shipping and receiving.
These factors align with whole-life asset management principles by ensuring cost-effective and accessible storage solutions, contributing to reduced transportation costs and improved logistics.
NEW QUESTION # 113
A company has obsolete inventories and it must write off these inventories. How does writing off inventories impact on the company's financial statements?
1. Stock increases
2. Stock decreases
3. Profit increases
4. Profit decreases
- A. 1 and 4 only
- B. 1 and 3 only
- C. 2 and 4 only
- D. 2 and 3 only
Answer: C
Explanation:
An inventory write-off is a process of removing from the general ledger any inventory that has no value.
Using the direct write-off method, a business will record a credit to the inventory asset account and a debit to the expense account. For example, say a company with $100,000 worth of inventory decides to write off
$10,000 in inventory at the end of the year. First, the firm will credit the inventory account with the value of the write-off to reduce the balance. The value of the gross inventory will be reduced as such: $100,000 -
$10,000 = $90,000. Next, the inventory write-off expense account will be increased with a debit to reflect the loss.
The expense account is reflected in the income statement, reducing the firm's net income and thus its retained earnings. A decrease in retained earnings translates into a corresponding decrease in the shareholders' equity section of the balance sheet.
If the inventory write-off is immaterial, a business will often charge the inventory write-off to the cost of goods sold (COGS) account. The problem with charging the amount to the COGS account is that it distorts the gross margin of the business, as there is no corresponding revenue entered for the sale of the product.
Most inventory write-offs are small, annual expenses. A large inventory write-off (such as one caused by a warehouse fire) may be categorized as a non-recurring loss.
Reference:
- CIPS study guide page 86-90
- Inventory Write-Off
LO 2, AC 2.1
NEW QUESTION # 114
What is the stock turn for a store holding products to the value of £250,000 with annual sales of these products amounting to £1,000,000?
- A. 0
- B. 1
- C. 0.4
- D. 0.25
Answer: B
Explanation:
Calculating Inventory Turnover (Stock Turn)
As with a typical turnover ratio, inventory turnover details how much inventory is sold over a period. To calculate the inventory turnover ratio, cost of goods (COGS) is divided by the average inventory for the same period.1 Cost of Goods Sold ÷ Average Inventory or Sales ÷ Inventory In this exercise, the stock turn equal to sales divided by inventory, or 1,000,000:250,000 = 4.
NEW QUESTION # 115
Which of the following allow the operators to access higher levels in warehouse facility? Select TWO that apply:
- A. Scissor platform
- B. Carousel
- C. Grab
- D. Order picker
- E. Stacker crane
Answer: A,D
Explanation:
It is important to ensure safe working in storage facilities, and access to higher shelves or racking presents a challenge. Lifting at full reach becomes a problem at relative low weight. There can also be danger for other workers who are around someone working at height, from the movement of equipment or dropping stock from a height.
Scissor platforms are used in high-roof warehouses to gain access to lighting, high-racking units and sections of wall and roof.
ORDER PICKER is manual or powered device - some with ride-on capability and some without. This allow for low-level, medium-level and high-level picking of various items. Many are equipped with forks to allow transfer capability of larger picked boxes. Higher-level and narrow or very narrow -aisle versions have the ability to elevate operators on the front platform to higher racking to pick items.
Grabs are designed to hold stock either width-wise or from above. These are either specific devices designed for grabbing materials or are available as an accessory to forklift trucks.
Carousels are space-efficient, rotating devices which allow access to a large range of product from a single location. Designs are variable, with carousels rotating horizontally or vertically until the required items can be retrieved.
Stacker-cranes are designed for the automated storage and retrieval of unit loads, in high-bay warehouses.
They travel in aisles equipped with guide rails, electrical supply, data transmission and control systems. To ensure the storage and retrieval functions, the stacker-crane carries out three types of movement : long-travel, lifting and picking.
NEW QUESTION # 116
Which type of codes can a barcode laser scanner (linear scanner) read?
- A. Aztec code
- B. 1D barcode
- C. Numerical code
- D. QR code
Answer: B
Explanation:
One-dimensional (or 1D) barcodes systematically represent data by varying the widths and spac-ings of parallel lines. These include some of the most traditional and well-recognized barcode types, such as the UPC and EAN codes. 1D barcodes are also commonly referred to as linear barcodes.
Two-dimensional (2D) barcodes look like squares or rectangles that contain many small, individual dots. QR codes, Data matrix and Aztec codes are examples of 2D barcodes Numerical code contains all numbers, no letters There are two different scan engine types (laser scanner versus imager) for interpreting the infor-mation provided in the barcode. Many companies producing the technology capable of reading the barcode data uses the term "scanning" regardless of the type of scan engine used. For the purposes of these FAQs, we are trying to draw a clearer distinction for you.
Linear (1D) codes can be scanned with a traditional laser scanner. A laser scan engine uses a laser and mirror to create the bar that scans the information. 1D barcode scanners will only interpret the linear barcode scanning technology. 1D barcode scanners are typically less expensive since the type of encryptions they can decode is limited.
Diagram Description automatically generated
LO 1, AC 1.2
NEW QUESTION # 117
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