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CIPS Whole Life Asset Management Sample Questions (Q69-Q74):

NEW QUESTION # 69
A manager who is concerned about the environmental impact of packaging should do which of the following?

A. Adopt international environmental packaging standards
B. Purchase the packaging materials in bulk
C. Try to reduce the costs of packaging
D. Not use the packaging materials at all

Answer: A

Explanation:
In principle, use of any materials involves an environmental cost. Some packaging materials use a lot of natural resources and energy to produce. The journey taken by packaging from raw material to manufacturing and then to the initial user also incurs a 'carbon footprint'. The weight of packag-ing contributes to the fuel usage of vehicles while the volume used can add up to additional jour-neys or the use of larger vehicles.
Finally, the reuse, return, disposal or recycling will also involve additional to the environmental cost.
In this question:
- 'Purchase the packaging materials in bulk' may incur additional fuel and carbon footprint in delivering these materials
- 'Try to reduce the costs of packaging' may prompt the organisation to use less eco-friendly and cheap materials like polystyrene chips
- 'Not use the packaging materials at all' can increase the environmental performance of packag-ing activities, but it also harms the products to be delivered and may cause other environmental problems (i.e. spillage of toxic chemicals into the environment) So the correct answer should be: 'Adopt international environmental packaging standards'. The International Standards Organisation (ISO) has published several standards regarding packaging and environment, namely ISO 18601, ISO 18602, ISO 18603, ISO 18604, ISO 18605, ISO 18606.

NEW QUESTION # 70
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...?

A. Taking the square root of the economic order quantity
B. Expected stockout cost multiplies with product margin
C. Choosing the level of safety stock that assures a given service level
D. Carrying sufficient safety stock so as to eliminate all stockouts

Answer: C

Explanation:
Safety stock is the stock held as a contingency or insurance against disruption or unexpected de-mand.
Holding safety stock reduces the risks of stockouts, when an organisation is unable to meet an order or continue production due to lack of finished goods or input materials.
For single items, an extra investment in inventory (higher levels of safety stock) will always in-crease customer service levels. Conversely, higher service levels imply larger quantities of safety stocks and an increased investment in inventory. (Procurement and Supply Chain Management - 9th Edition) However, high levels of safety stocks also increase the inventory cost. There must be a balance between inventory costs and customer service. Thus, calculating the should-be safety stock based on a determined service level has long been recommended by many professionals.

NEW QUESTION # 71
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?

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. No, as it is an unfair contract term and places the supplier at a disadvantage in the contract
D. Yes, as it means the contract warranties are easier to change

Answer: B

NEW QUESTION # 72
A construction organisation 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 subjective assessment of multiple factors for both hire and lease by the directors
B. The expected frequency of use, the storage available, and the lease cost of the equipment compared to hiring it
C. The finance available and the potential profits available on the eventual sale of the leased equipment compared to hire costs
D. The results of a discounted cost analysis using comparative weekly payments for both hire and lease options

Answer: B

NEW QUESTION # 73
Which of the following is the character that allows the computer to verify whether a product code is entered correctly?

A. Radio frequency identification
B. Barcode
C. Check digit
D. 3-digit prefix

Answer: C

Explanation:
Many codes have integrated check digits. These are additional numbers or characters added to codes that a computer uses to verify the number is valid. The intention is to reduce the likelihood of miskeying an item and hitting an alternative live item. More often, a system is devised which a computer can calculate using combination of numbers.
Barcode is a graphic symbol used to convey data. Typically the characters in a barcode symbol consist of bars
/space pattern. Barcode is the method of representing data in a visual, machine-readable form. Initially barcodes represented data by varying the width and spacing of parallel lines.
Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects.
A prefix is an affix which is placed before the stem of a word or a string. A product code may have prefix which indicates its group, country, origins, etc.

NEW QUESTION # 74
......

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