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CIPS L4M7 Exam Syllabus Topics:

Topic	Details
Topic 1	Environmental standards for packaging Materials handling equipment
Topic 2	Explain the use of product coding in inventory operations Order tracking technologies
Topic 3	Discuss options to reduce costs whilst mitigating any negative impact on service levels Location of stores and warehouses
Topic 4	Systems for product coding Bar coding The use of RFID technologies
Topic 5	Hidden costs – global sourcing, risks associated with extended supply chain Cross functional support – ensure access to data
Topic 6	The use of automation in warehousing Palletisation and unit loads
Topic 7	Dependent demand and independent demand itemsof stock ABC classifications of stock that may apply
Topic 8	Identify the principles, purpose and impact of stores and warehouse design Identify the direct and indirect costs of holding inventory

CIPS Whole Life Asset Management Sample Questions (Q93-Q98):

NEW QUESTION # 93
Which of the following is the material handling equipment which uses the suction force to lift an item?

• A. Dolly
• B. Sack truck
• C. Vacuum lifter
• D. Pallet stacker

Answer: C Explanation:
VACUUM LIFTER uses the vacuum pad which attaches itself to a product. The suction force al-lows the product to be lifted (and rotated and placed). Vacuum lifters are used for moving and positioning glass sheets, but are also seen lifting boxes, plastic sacks, sheets of building materials and pipework. Some models feature hydraulic arms which allow easy movement of the lifted load. The lifting system will have a number of sucker pads and vacuum capability which determines the maximum weights and largest items that can be lifted.

DOLLY consists of stack and sets of wheels (either casters or rollers) under the stack that allow the dolly and the heavy object on top of it to move easily and smoothly. For moving in a straight line, rollers is ideal. If you want to move manoeuvrability, dolly with sets of casters will let you swivel and turn.

SACK TRUCK (hand truck) is an L-shaped box-moving handcart. It comprises a small base plat-form with two wheels at the base and a larger vertical structure. A small ledge to set objects on flat against the floor when the sack truck is upright. When moving, the truck and object are then tilted backward based on the vertical structure until the weight is balanced over the large wheels, making otherwise bulky and heavy objects easier to move.

PALLET STACKER is designed to lift and stack pallets. This one is fully mobile so can move easily around the warehouse. An operator would typically sit or stand while driving like a counter-balanced, reach or straddle lift truck.

LO 1, AC 1.3
NEW QUESTION # 94
The width of aisles within a warehouse is determined by...?

• A. The height of the building
• B. The location of goods-in and goods-out doors
• C. The length of storage racking
• D. Turning cycle of forklift and the size of pallets

Answer: D Explanation:
Below is a formula from Toyota you can use to make an informed decision.
1. Start with the basic right-angle stacking width
2. Add the load length
3. Add 12 inches for clearance
The basic right-angle stacking width is the smallest amount of space a forklift needs turn in order to insert its forks into a pallet. You can find basic right-angle stack measurements in the equipment manual or by contacting TMHNC if your business is located in Northern California. This measurement does not include the length of the load or room need for clearance.
Load lengths vary depending on your application, products, etc. As a starting point, a standard pallet has a 48-inch load length. Always check your forklift's data plate for the rated capacity (which is affected by attachments and other factors).
Adding 12 inches for clearance ensures you have enough room for your forklift's turn radius and helps protect against damage from operator error and/or product that may hang over the edge of the pallet.
Reference:
- CIPS study guide page 29-30
- How to Calculate Forklift Aisle Width Minimums
LO 1, AC 1.1
NEW QUESTION # 95
Which of the following lists all components, ingredients, and materials required to produce the final product?

• A. Bill of materials
• B. Master schedule
• C. Engineering change notice
• D. Purchase order

Answer: A Explanation:
Master production schedule (MPS) plans items that have "direct" demand, or "independent de-mand." With independent demand, the demand comes from sales orders, service orders, or fore-casts, and the demand comes directly from customer-or forecasted-requirements. It is the list that provides the timing of the production schedule and shows how much each machine can produce, how many shifts are used, etc.
A bill of materials (BOM) is a comprehensive inventory of the raw materials, assemblies, subas-semblies, parts and components, as well as the quantities of each, needed to manufacture a product.
Reference:
LO 2, AC 2.3
NEW QUESTION # 96
The ABC approach involves classifying inventory items by unit cost, with expensive items classi-fied as 'A' items and low cost items classified as 'C' items. Is this statement true?

• A. No, ABC analysis considers the supply risks associated with an inventory item
• B. Yes, 'C' items with the lowest unit prices are the tail spends
• C. No, ABC analysis considers the usage of each inventory item
• D. Yes, 'A' items represent approximately 20% of total unit prices

Answer: C Explanation:
ABC analysis is an approach for classifying inventory items based on the items' consumption val-ues. Consumption value is the total value of an item consumed over a specified time period, for example a year. The approach is based on the Pareto principle to help manage what matters and is applied in this context:
- A items are goods where annual consumption value is the highest. Applying the Pareto principle (also referred to as the 80/20 rule where 80 percent of the output is determined by 20 percent of the input), they comprise a relatively small number of items but have a relatively high consumption value. So it's logical that analysis and control of this class is relatively intense, since there is the greatest potential to reduce costs or losses.
- B items are interclass items. Their consumption values are lower than A items but higher than C items. A key point of having this interclass group is to watch items close to A item and C item classes that would alter their stock management policies if they drift closer to class A or class C. Stock management is itself a cost. So there needs to be a balance between controls to protect the asset class and the value at risk of loss, or the cost of analysis and the potential value returned by reducing class costs. So, the scope of this class and the inventory management policies are determined by the estimated cost-benefit of class cost reduction, and loss control systems and processes.
- C items have the lowest consumption value. This class has a relatively high proportion of the total number of lines but with relatively low consumption values. Logically, it's not usually cost-effective to deploy tight inventory controls, as the value at risk of significant loss is relatively low and the cost of analysis would typically yield relatively low returns.
LO 2, AC 2.1
NEW QUESTION # 97
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

• A. 2 and 4 only
• B. 1 and 4 only
• C. 2 and 3 only
• D. 1 and 3 only

Answer: B Explanation:
There are several methods to reduce the acquisition costs in procurement. L4M7 study guide lists the following methods:
- Buyer discretionary spend
- 'User buying'
- Vendor managed inventory (VMI)
- Two-bin Kanban
- Product catalogue
- e-Procurement techniques, including some systems such as ERP, procure-to-pay (P2P), e-requisition, e-tendering, etc.
- Procurement cards
Reference:
LO 3, AC 3.1
NEW QUESTION # 98
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