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CIPS Whole Life Asset Management Sample Questions (Q211-Q216):

NEW QUESTION # 211
Which of the following are recognised as disadvantages of ERP systems? Select TWO that apply.

A. Only applied to manufacturing
B. Excluded inventory records
C. Lower factory efficiencies
D. High initial investment
E. Required intensive employee training

Answer: D,E

Explanation:
Implementing a full ERP system is not an easy option. They are complex systems and the disad-vantages include the following:
- The installation of the ERP system is costly. ERP consultants are very expensive take approxi-mately 60% of the budget.
- The success depends on the skills and experience of the workforce, including education and how to make the system work properly.
- Resistance in sharing internal information between departments can reduce the efficiency of the software.
- The systems can be difficult to use.
- Change of staff, companies can employ administrators who are not trained to manage the ERP system of the employing company, proposing changes in business practices that are not synchro-nized with the system.
- Having an ERP system has many advantages, but does not guarantee the total success of the company.
Organizational culture, know how to involve staff and anticipate changes that will suffer the organization using this system of administration, are important elements for the completion of the implementation.
- The effectiveness of the ERP system may decrease if there is resistance to share information be-tween business units or departments. Due to strong changes that implementation of the ERP system brings in the culture of work, there may be poorly trained or disinterested in making use of the same staff...
- The benefits of having an ERP system are not presented immediately with the implementation of the software, they will be evident long after the system is running.
- The culmination of the implementation depends on the ability and skill of the workforce, also involves education and training, to make the system is correctly applied.

NEW QUESTION # 212
Which of the following is the formula for calculating the re-order level?

A. Average usage in a lead-time / Required level of safety stock
B. Average usage in a lead-time + Required level of safety stock
C. Required level of safety stock - Average usage in a lead-time
D. Required level of safety stock x Average usage in a lead-time.

Answer: B

Explanation:
In management accounting, reorder level (or reorder point) is the inventory level at which a com-pany would place a new order or start a new manufacturing run.
Reorder level depends on a company's work-order lead time and its demand during that time and whether the company maintain a safety stock.
If a company maintains a safety stock, reorder level calculation changes are follows:
Reorder Level = Average Demand x Lead Time + Safety Stock

NEW QUESTION # 213
Which of the following best describes available inventory (also known as inventory position)?

A. The amount of inventory on hand
B. The amount of inventory on hand plus the amount of inventory on order
C. The amount of inventory on order only
D. The amount of inventory on hand in excess of expected demand

Answer: B

Explanation:
Available inventory (or Inventory position - IP) is equal to inventory on-hand plus quantity on order minus backorder (if any) Reference:
LO 2, AC 2.3

NEW QUESTION # 214
Which of the following best describe the function of MRP?

A. Planning and monitoring of inventory resources
B. Planning and controlling of production and inventory
C. Planning and controlling of production and finance
D. Planning and monitoring of production resources only

Answer: B

Explanation:
Material requirement planning (MRP) is a production planning and material (inventory) control system used in manufacturing. Objectives of MRP are to ensure materials are available for production while minimising inventory and to plan production and procurement activities.
MRP process is described in the graph below:

Reference:
LO 2, AC 2.3

NEW QUESTION # 215
PPC Refinery (UK) must close down an out-of-date refinery which has very poor environmental performance.
The refinery is very sophisticated with many technically complicated machineries, lubricants, coolants and other chemical substances. Decommissioning the refinery is highly risky and hazardous. To manage the decommissioning process well, PPC project team must know these machineries and substances in details.
Which document can provide the technical details on the refinery?

A. Code of Conduct
B. Corporate social responsibility policy
C. Original specifications
D. Non-disclosure agreement

Answer: C

Explanation:
Decommissioning or disposal should start with the original specifications of the assets so that the organisation and supplier can make an appropriate plan. Some specifications also mention the is-sues regarding to end-of- life environmental factors.

NEW QUESTION # 216
......

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