CIPS Updated L4M7 Exam Questions and Answers by tudor

Explanation

Minimum open aisle width for standard counterbalance forklift is 10.5-13.1 ft. You can look at the minimum aisle width for different equipment here, or calculate yourself with an instruction here.

LO 1, AC 1.3

Explanation

There are many different factors that must be considered when assessing warehouse and stock locations:

• Operating cost of the location or area

• Availability and suitability of warehouses

• Availability of manpower or labour

• Proximity to suppliers and customers

• Access to transport infrastructure (domestic and international)

• The political and security environment of the location

LO 1, AC 1.1

Explanation

The costs of stockouts - the costs of being out of inventory - include:

- Loss of production output

- Costs of idle time and of fixed overheads spread over a reduced level of output

- Costs of any action taken to deal with the stockout, such as buying from another stockist at an enhanced price, switching production, obtaining substitute materials

- Loss of customer goodwill due to the inability to supply or late delivery.

(Procurement and Supply Chain management - 9th Edition, K. Lysons and B. Farrington, 2016)

LO 2, AC 2.2

Explanation

The safety stock (or buffer stock) is the stock level that limits stock shortages due to unforeseen events (forecasts not in line with demand, longer than expected supply time, etc…)

Demand variance is the degree to which the demand in a fixed period deviates from the average demand of the same period.

A reorder point is the unit quantity on hand that triggers the purchase of a predetermined amount of replenishment inventory.

The just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders from suppliers directly with production schedules.