M7 Sample Paper Flashcards
Which of the following can be used when tracking the movement of stock?
a. Warehouse layout
b. Order forecasts
c. Stock levels
d. Radio frequency identification
D
Which ONE of the following is the most effective inventory performance measure?
a. Lead time
b. Profit margin
c. Revenue generated
d. Value of stock
A
Which ONE 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
A
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 ONE of the following is an advantage of using this
approach?
a. It is very complex to apply across a large organisation with many products
b. It can aid the calculation of the financial value of the various products
c. The information required to conduct the analysis is generally not available
d. The approach allows frequency of use as a valid classification of inventory
B
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, especially items such as
gaskets, filters and pumps. These items are known as which ONE of the following?
a. Dependent demand items
b. Indirect items
c. Overhead items
d. Safety stock items
A
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 major national retailers. Its
financial controller has been concerned about its increasing expenditure on inventories, whilst EW’s revenues
and sales volumes have both been declining steadily. Which ONE of the following measures should have
highlighted this deteriorating trend?
a. Lead times
b. Service levels
c. Stock turn
d. Disposal costs
C
The use of RFID technologies has 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
A
Which of the following stock items could be considered as direct supplies in inventory management? Select
the TWO that apply.
a. Goods purchased and stocked by a retailer for resale
b. Car batteries held ready for use on the assembly line
c. Drilling machines to be issued to the construction department
d. Ink cartridges for 30 printers scattered around various business units
e. The compulsory safety shoes issued to staff
A & B
Which of the following are advantages of using barcodes as an integral part of inventory management?
Select the TWO that apply.
a. They are easy and cheap to print and use
b. They can be scanned remotely using radio waves
c. They can be read reliably using various technologies
d. They all have to be scanned individually
e. They can be scanned even when faded or damaged
A & C
Which of the following are the primary considerations when designing a new warehouse? Select THREE
that apply.
a. Stakeholder mapping
b. Competitive activities
c. Physical movement of goods
d. Product pricing
e. Space utilisation
f. Flexibility of layout
C, E & F
Which ONE of the following is an important consideration when choosing the location of a new warehouse
facility?
a. Availability of sufficient parking for directors
b. Distance from competitors’ facilities
c. Visibility of the company brand from nearby roads
d. Ease of access to transport infrastructure
D
Which ONE of the following is the most useful to determine what each type of pallet can be used for?
a. Its colour coding
b. Its maximum weight loading rating
c. Its year of manufacture
d. Its international standard registration
B
Super Chips Group (SCG) is the world’s leading manufacturer of microchips. It supplies many of the global
computer hardware manufacturers. Whilst the business is highly successful, it has found it increasingly difficult
to produce accurate forecasts due to the uncertain demand patterns of the customers it supplies. SCG
microchips are best described as which type of item?
a. Indirect demand
b. Consumer demand
c. Dependent demand
d. Market demand
C
International Manufacturing Group (IMG) has previously experienced production issues due to stock-outs,
following the introduction of a just-in-time approach two years ago. Since then, it has increased its inventory
levels of many key components. This has caused issues for IMG as its insurance costs have increased as have
the levels of obsolescence and damage. These issues relate to which ONE of the following?
a. Holding costs
b. Indirect costs
c. Fixed costs
d. Acquisition costs
A
Which of the following are factors to consider for a procurement manager evaluating end-of-life costs for
the purchase of machinery?
1. Value depreciation
2. Disposal costs
3. Staff uniform costs
4. Cost of returns
a. 1 and 2 only
b. 2 and 3 only
c. 3 and 4 only
d. 1 and 3 only
A
