The time period between placing an order and its receipt in stock is known as what?
Answer : A
Lead time is the duration from ordering to receipt and is a critical metric in inventory management. Reducing lead time enhances supply chain responsiveness and allows for more accurate planning. Whole-life asset management prioritizes reducing lead times to optimize inventory levels and meet demand effectively.
'The main consideration in designing the layout of a warehouse is the size of the storage space utilized.'
Is this statement TRUE?
Answer : C
While storage space is important, traffic flow and accessibility are crucial for efficient warehouse design. Proper layout ensures safe, quick movement of goods and minimizes bottlenecks, reducing operational costs and enhancing efficiency. In whole-life asset management, effective space utilization and efficient layout planning are key for long-term warehouse performance.
An organization might find it more beneficial to lease and use an asset over a predetermined period. After this period, the lessee has the right to secure outright ownership of the asset by paying an agreed amount; otherwise, the asset would be repossessed by the lessor. Which of the following is an advantage of leasing?
Answer : B
Leasing allows an organization to predict costs accurately, as installment payments are pre-agreed. This makes financial planning simpler, which is especially beneficial in whole-life asset management where minimizing upfront capital expenditure is often a priority. Leasing also reduces the risk associated with asset obsolescence.
One of the classifications of inventory is referred to as 'indirect supplies.' Which of the following items are examples of indirect supplies in a water bottling plant?
Lubricants for maintenance of production machines
Computer cartridges for the procurement office
Reams of printed labels to stick on water bottles
Blue-colored plastic caps to seal the water bottles
Answer : A
Indirect supplies support operations but are not part of the finished product. For a bottling plant, items like lubricants for machine maintenance and office supplies are indirect supplies, as they aid in operation but do not enter the final product. Managing these supplies in whole-life asset management is critical for cost efficiency and operational support.
Staff at DIY Products Inc. (DPI) have been experiencing issues with the identification of stock items. The current labeling system is outdated and unreliable. DPI has therefore invested in a machine-readable approach. Each item has a unique number that is attached visibly to the packaging. This number can be deciphered by a scanner to aid identification. This approach is known as which of the following?
Answer : C
Barcoding allows DPI to label each item uniquely, making it scannable and easy to track. This method increases efficiency, accuracy, and traceability, key aspects of whole-life asset management that improve inventory control and reduce errors in item identification.
Long-term forecasting of demand using a subjective method is based on a ...
Answer : C
Subjective demand forecasting relies on qualitative methods that draw on expert experience and intuition rather than quantitative data. This includes techniques like the Delphi method, where experts provide insights based on their judgment. In whole-life asset management, subjective forecasting may complement data-driven forecasts when historical data is limited or demand patterns are unpredictable.
What cost factors should be considered for the maintenance and repair of manufacturing equipment?
Direct labor cost
Cost of utilities during the use of the equipment
Cost of the goods being sold
Guarantee and warranty cost
Answer : B
Maintenance and repair costs include:
Direct labor: Expenses for personnel performing maintenance tasks.
Warranty costs: Expenses associated with warranty obligations or repairs within the warranty period.
These costs are part of whole-life asset management, which aims to accurately budget for and manage ongoing equipment expenses.