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CIPS Whole Life Asset Management Sample Questions (Q186-Q191):
NEW QUESTION # 186
In the Appendix A of a long-term supply contract of Bulk Drug Substance, both parties agree that "The reference price for Bulk Product at the specification, per gram, shall be US$10. The unit price for Bulk Product for a specific Purchase Order shall be computed by multiplying the above- specified reference price by two corrective factors, namely inflation correction factor and exchange rate correction factor". This pricing appendix is an example of...?
Answer: A
Explanation:
Price setting mechanisms fall into two main categories: fixed and variable. A fixed price mecha-nism is a straightforward concept which typically results in a relatively stable budget that can be forecast. Variable mechanisms have an element of variable pricing per unit bought.
Setting a fixed price mechanism is in theory a relatively simple and straightforward concept, where the collector and the buyer agree on a fixed price for a specific material or mix of materials, for a certain length of time.
All other pricing mechanisms that are not fixed have an element of variable pricing per unit bought.
The most common variable pricing mechanisms can be divided into two groups:
1. Where the benefit accruing to the buyer from acquiring the material is used to calculate what the payment to the seller should be; or Approaches to Materials Sales: A guide for local authorities
2. Where the price paid is indexed to a published source of market price information. The above scenario demonstrates variable pricing mechanism using published sources on inflation rate and exchange rate. CIPS also refers this mechanism as adjustable prices.
Reference:
- CIPS study guide page 138-139
- 10.0 Price setting mechanisms
LO 3, AC 3.1
NEW QUESTION # 187
Which of the following factors should be considered when decommissioning and disposing of a machine at the end of its useful life? SelectTWOthat apply.
Answer: C,E
NEW QUESTION # 188
When designing the layout of a warehouse or stores area, one of the factors to consider is the width of the aisles between the racking. Which of the following is a main consideration when calculating the aisle width?
Answer: C
NEW QUESTION # 189
In the periodic review system, the order quantity is the same for each order. Is this statement true?
Answer: C
Explanation:
Fixed-Time Period System (or Periodic Review system) is the inventory management system in which inventory is checked in fixed time periods, T, and the quantity ordered varies. The system also contains a target inventory level, R, which is restored when order received. The order quantity is calculated as:
Q = R - IP
where: Q = order quantity
R = target inventory level
IP = inventory position
Inventory position (IP) is equal to inventory on-hand plus quantity on order minus backorder (if any) The order quantity varies because the inventory position at each review point differs from each other.
Diagram Description automatically generated with medium confidence
LO 2, AC 2.3
NEW QUESTION # 190
Which of the following would be an impact of low stock in the supply chain?
* Warehouse space would all be full with excess stock
* There may be delays and higher costs to fulfill supply
* Stock may not be available at times of high demand
* Lead times would reduce and purchase costs would fall
Answer: B
Explanation:
Low stock levels can lead to:
* Delays and higher fulfillment costs: When stock is insufficient, emergency orders and expedited shipping may be necessary, increasing costs.
* Stockouts during high demand: Insufficient inventory can lead to missed sales opportunities, negatively impacting customer satisfaction.
Whole-life asset management seeks to balance inventory levels to avoid stockouts while minimizing holding costs.
NEW QUESTION # 191
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