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NEW QUESTION 26
Sidel Corp is a major food processor. It invested heavily on manufacturing facilities and processing machineries. Sidel's expenses on maintenance are exceptionally high. To minimise the total cost of maintenance, what should Sidel Corp do?

  • A. Only conduct preventative maintenance
  • B. Outsource corrective maintenance but in-source preventative maintenance.
  • C. Balance between proactive maintenance and reactive maintenance
  • D. Replace every machineries at breakdowns

Answer: C

Explanation:
Maintenance can represent a significant portion of the cost in asset intensive organisations (such as Sidel - a food processor), as breakdowns have an impact on the capacity, quality and cost of operation. However, the formulation of a maintenance strategy depends on a number of factors, including the cost of down time, reliability characteristics and redundancy of assets. Consequently, the balance between preventive maintenance (PM) and corrective maintenance (CM) for minimising costs varies between organisations and assets. Nevertheless, there are some rules of thumb on the balance between PM and CM, such as the 80/20 rule.
Preventive maintenance is a type of proactive maintenance, while corrective maintenance is an example of reactive maintenance. Therefore, the answer should be "Balance between proactive maintenance and reactive maintenance".
Reference:
- Preventive and corrective maintenance - cost comparison and cost-benefit analysis
- CIPS study guide page 158-163
LO 3, AC 3.1

 

NEW QUESTION 27
Bulk loose coal that requires massive handling system should be stored in which area?

  • A. Store
  • B. Chill hub
  • C. Stockyard
  • D. Heating warehouse

Answer: C

Explanation:
Materials that will not easily deteriorate, are generally stored in open or fairly covered areas (stockyard). The materials are usually in bulk, like steel plates or coils casting, timber coal, steel barrels, cable drums, piping, lampposts, lorries, etc.
Stockyards are open or semi-covered areas that are used for the following:
- Bulk loose or packaged materials
- Bulky or oversized items that may be difficult to move inside
- Materials that may require specialised handling, loading or unloading Below image shows the example of a stockyard that stores loose coal and its handling system.
L4M7-38e8a6cceade7741d3330a2f52d867cf.jpg
LO 1, AC 1.1

 

NEW QUESTION 28
Which of the following is the minimum aisle width for using standard counterbalanced forklifts?

  • A. 4.9 ft - 5.2 ft
  • B. 10.5 ft - 13.1 ft
  • C. 6.9 ft - 7.2 ft
  • D. 5.6 ft - 5.9 ft

Answer: B

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

 

NEW QUESTION 29
The ABC approach involves classifying inventory items by unit cost, with expensive items classi-fied as 'A' items and low cost items classified as 'C' items. Is this statement true?

  • A. Yes, 'C' items with the lowest unit prices are the tail spends
  • B. No, ABC analysis considers the usage of each inventory item
  • C. Yes, 'A' items represent approximately 20% of total unit prices
  • D. No, ABC analysis considers the supply risks associated with an inventory item

Answer: B

Explanation:
ABC analysis is an approach for classifying inventory items based on the items' consumption val-ues. Consumption value is the total value of an item consumed over a specified time period, for example a year. The approach is based on the Pareto principle to help manage what matters and is applied in this context:
- A items are goods where annual consumption value is the highest. Applying the Pareto principle (also referred to as the 80/20 rule where 80 percent of the output is determined by 20 percent of the input), they comprise a relatively small number of items but have a relatively high consumption value. So it's logical that analysis and control of this class is relatively intense, since there is the greatest potential to reduce costs or losses.
- B items are interclass items. Their consumption values are lower than A items but higher than C items. A key point of having this interclass group is to watch items close to A item and C item classes that would alter their stock management policies if they drift closer to class A or class C. Stock management is itself a cost. So there needs to be a balance between controls to protect the asset class and the value at risk of loss, or the cost of analysis and the potential value returned by reducing class costs. So, the scope of this class and the inventory management policies are determined by the estimated cost-benefit of class cost reduction, and loss control systems and processes.
- C items have the lowest consumption value. This class has a relatively high proportion of the total number of lines but with relatively low consumption values. Logically, it's not usually cost-effective to deploy tight inventory controls, as the value at risk of significant loss is relatively low and the cost of analysis would typically yield relatively low returns.
LO 2, AC 2.1

 

NEW QUESTION 30
Which of the following best describes what happens when order volumes from customers increase and multiply through the supply chain?

  • A. Seasonal demand
  • B. Opitz system
  • C. Pareto curve
  • D. Forrester effect

Answer: D

Explanation:
The bullwhip effect (or Forrester effect) is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain.
Seasonal demand: consumer interest in purchasing particular products only during a specific peri-od within the calendar year.
OPITZ is a coding system used to form Groups in Group Technology philosophy of Manufactur-ing.
The Pareto Curve is the shape created when the bars of a Pareto Chart are progressively summed and the points joined together. The final curve ends at 100% of items in the chart, which means that you can then draw a line across at 80% and 'bounce' it down to find the bar which, when combined with all bars to its left, will give 80% of all items.
Reference:
LO 2, AC 2.3

 

NEW QUESTION 31
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