CIPS Level 4 – Diploma in Procurement and
Supply
Module 7 – Whole Life Asset Management
SAMPLE EXAM QUESTIONS
L4M7 Exam Exemplar Questions Dec 2018
Q1. Which of the following is the best example of 'lean' in the context of inventory control?
a. Advance ordering
b. Buffer stocks
c. Timescale reduction
d. Waste minimisation
LO: 2
AC: 2.3
Q2. Which of the following is the most effective inventory performance measure?
a. Lead time
b. Profit margin
c. Revenue generated
d. Value of stock
LO: 2
AC: 2.3
Q3. Which of the following can be described as resources used in the production process that cannot be easily attributed to
the actual products being manufactured?
a. Indirect supplies
b. Variable units
c. Fixed costs
d. Marginal overheads
LO: 2
AC: 2.1
Q4. Construct Group (CG) is a major construction company. It buys an extensive range of goods and services and is in the
process of adopting a category management approach. As an initial step CG has applied ABC stock classification to
identify its most important items. Which of the following is a disadvantage of using this approach alone?
a. It is very complex to apply across a large organisation with many products
b. It assumes that financial value is the only driver of importance
c. The information required to conduct the analysis is generally not available
d. The approach is not suitable for goods used in the construction industry
LO: 2
AC: 2.1
Q5. Heavy Duty Engineering Group (HDEG) manufactures a wide range of diesel engines, mostly used in the
agricultural sector. Forecasting future volumes is not easy as sales are unpredictable, in particular in respect of items such
as gaskets, filters and pumps. These items are known as which of the following?
a. Dependent demand items
b. Indirect items
c. Overhead items
d. Independent product lines
LO: 2
AC: 2.1
Q6. EatWell (EW) is a medium-sized regional retailer. In recent years EW has been experiencing financial difficulties as a
result of changing consumer habits and increasing pressure from the major stores. Its financial controller has been
concerned about its increasing expenditure on inventories, whilst overall EW's revenues and sales volumes have both been
declining steadily. Which of the following measures should have highlighted this deteriorating trend?
a. Lead times
b. Service levels
c. Stock turn
d. Disposal costs
LO: 2
AC: 2.3
Q7. The use of RFID technologies have directly driven which of the following benefits in procurement and supply?
1. Easier stock identification
2. Improved inventory tracking
3. Fewer returned items
4. Less individual deliveries
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 4 only
d) 3 and 4 only
LO: 1
AC: 1.2
Q8. Which of the following directly relate to triple bottom line concepts?
1. What is the environmental impact?
2. Does this machine have the best output?
3. Are our supply chain practices good for communities?
4. Is our warehouse big enough?
a. 1 and 2 only
b. 3 and 4 only
c. 2 and 4 only
d. 1 and 3 only
LO: 3
AC: 3.3
Q9. Which of the following are related to end-of-life costs of an asset? Select the TWO that apply
a. Disposal costs
b. Servicing costs
c. Depreciation costs
d. Decommissioning costs
e. Opportunity costs
f. Maintenance costs
LO: 3
AC: 3.1
Q10. Which of the following are crucial and primary considerations when designing a new warehouse? Select THREE that
apply
a. Stakeholder mapping
b. Competitive activities
c. Flow
d. Product pricing
e. Space utilisation
f. Flexibility
LO: 1
AC: 1.
