Exam (elaborations)
CIPS M4L7 (Whole Life Assessment Management) LO2 QUESTIONS AND ANSWERS
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CIPS M4L7 (Whole Life Assessment Management) LO2 QUESTIONS AND ANSWERS
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CIPS M4L7 (Whole Life AssessmentManagement) LO2 QUESTIONS AND ANSWERS
What are preliminary costs?
Correct Answer -costs associated with actions before raising the purchase
order
What are placement costs?
Correct Answer -the cost of raising the purchase order and ensuring the
supplier receives it
What are post-placement costs?
Correct Answer -the costs after the purchase order has been raised,
necessary to get the goods to the requestor and payment to the supplier
What are holding costs?
Correct Answer -costs associated with the storage and handling of
physical stock
What are the two types of holding costs?
Correct Answer -- costs related to the value of the goods
- costs related to the physical characteristics of this inventory
what are the costs associated with a stockout?
Correct Answer -- loss of production output - there will be no production
until the stockout is resolved
-costs of machine downtime and of overheads spread out over a reduced
level of output
- costs of any action required to deal with the stockout
, what may still remain after a stockout has been remedied?
Correct Answer -- loss of customer goodwill through inability to supply or
late delivery
- loss of sales or new orders
- loss of market credibility
what are the options to reduce costs while mitigating any impact on
service levels?
Correct Answer -- using lead times and holding costs as part of a price
evaluation
- strategically placed safety stock
- vendor-owned stock
- increased overall inventory levels
- improved forecasting accuracy
- improvements through SRM and KPIs
what is forecasting?
Correct Answer -decision-making tool used by businesses to help in
budgeting, planning and estimating future growth
what is subjective forecasting?
Correct Answer -uses qualitative information based on human pinion and
insights not shown by hard data
what are the most common subjective techniques?
Correct Answer -- market surveys
- employee surveys
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