L4M7: Whole Life Asset Management

L4M7: Whole Life Asset Management practice questions, page 2 of 3, with answer review and explanations.

Question 6

PBP Toys has to manage annual seasonal demand that requires double the warehouse space that is has available in order to fulfil the orders. It requires this extra space for only a four week period each year. Which of the following solutions is the most effective way for PBP to manage this problem?

  1. Reduce stock volumes held and undertake variety reduction
  2. Rent additional space in a third-party warehouse facility
  3. Relocate to a new warehouse capable of storing the required volumes
  4. Replace warehouse racking and use stacking pallets throughout

Question 7

In relation to stock management techniques, which of the following are characteristics of ‘vendor-owned stock’? Buffer levels of stock are purchased The supplier retains the title of the stock The buyer provides physical storage The buyer takes all the financial risk

  1. 2 and 4 only
  2. 2 and 3 only
  3. 1 and 2 only
  4. 1 and 4 only

Question 8

Which of the following supply chain activities can distort data for forecasting inventory? Sales promotions by the marketing department Over-ordering by customers Increase in stock movements in the warehouse Volatile logistic and container prices

  1. 1 and 2
  2. 2 and 3
  3. 3 and 4
  4. 1 and 4

Question 9

Zemora Clothing Inc. receives high-priced garments with devices hidden inside the lining. This is done to avoid possible fraudulent removal of the garments from the shop. These tags are activated when the items arrive at the stores. When a garment is moved by a customer from a display area. security employees receive an initial alert. An alarm rings if the customer passes through the doors of the shop without paying for the items. Which of the following order tracking technology is used by this company?

  1. Radio frequency identification
  2. Bar coding system
  3. Electronic data interchange
  4. Electronic resource planning

Question 10

In addition to the cost of interest on capital tied up in inventory, and losses through deterioration and obsolescence, there are other holding costs. Which of the following are holding costs? (Choose two that apply.)

  1. Production costs
  2. Cost of idle time
  3. Storage costs
  4. Selling costs
  5. Administrative costs