Among different types of costs associated with inventory, the costs of obtaining purchase approvals are...?
Answer(s): C
Direct and indirect costs of holding inventory include the following:- Acquisition costs: preparing the requisition, supplier selection and approvals, time and costs of the procurement process, etc.- Holding costs- Costs of stockoutsLO 2, AC 2.2
Which of the following refer to material used for filling the void left in the box but they have poor environmental profile?
Answer(s): A
Void filling is the general term giving to the challenge of filling the space left in a box after the products have been packed. This means that if there is no void filling material, the product inside can move around and could be damaged. Materials to fill voids to secure contents - Polystyrene (PS) is a synthetic aromatic hydrocarbon polymer made from the monomer known as styrene.[5] Polystyrene can be solid or foamed. General-purpose polystyrene is clear, hard, and rather brittle. It is an inexpensive resin per unit weight. It is a rather poor barrier to oxygen and water vapour and has a relatively low melting point.[6] Polystyrene is one of the most widely used plastics, the scale of its production being several million tonnes per year.[7] Polystyrene can be naturally transparent, but can be coloured with colourants. Uses include protective packaging (such as packing peanuts and CD and DVD cases), containers, lids, bottles, trays, tum-blers, disposable cutlery[6] and in the making of models. Polystyrene is generally considered to be non-biodegradable. However, certain organisms are able to degrade it, albeit very slowly.- Chips made of bio-degradable materials- Absorbent and fire-resistant material- Shredded paper, cardboard or wood-Based material- Paper or cardboard rolls- Bubble wrap- Air-filled cushions- Self expanding foamStraps are used to group items into unit load. Polypropylene or polyester are the materials most often used. The wider the strap, the stronger it will be. Using more than one strap and straps for length and width will create a strong place for stock.
- Polystyrene (Wikipedia)- CIPS study guide page 65LO 1, AC 1.3
In the periodic review system, the order quantity is the same for each order. Is this statement true?
Answer(s): B
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 IPwhere: Q = order quantityR = target inventory levelIP = inventory positionInventory 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.LO 2, AC 2.3
An organisation always obtains negative cash flow regarding removal and disposal of assets. Is this statement true?
Assets in their end of life need to be removed or disposed. Though an organisation can incur some costs in decommissioning or removal of the assets, it may recover costs by reselling the assets. Therefore, sometimes the organisation can gain positive cash flow from removal and disposal of assets. The answer should be "No, the organisation may recover the value of the assets by reselling it".LO 3, AC 3.3
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