Which of the following allow an organisation to have more flexible space for storage by leveraging the facilities of other parties? Select TWO that apply.
Answer(s): B,D
Temporary warehousing (or 'Very short-term warehousing') is offered in the market where organ- isation makes their requirements for space open online to offers or bids for available space. This appears to be an emerging market and service providers in the UK and USA typically quote a price per pallet per week with some also requiring a 'transaction fee' for movements of each pallet in and out.Consignment stocking is a facility offered by a supplier to a buyer to allow a delivery of stock to the buyer with payment only after it is used or sold to a customer. Double-deep pallet racking and carousel-style storage are two tools that leverage space within a warehouse:Double-deep pallet rackCarousel style storage
CIPS study guide page 31LO 1, AC 1.1
Bulk loose coal that requires massive handling system should be stored in which area?
Answer(s): B
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.LO 1, AC 1.1
When using ABC analysis to classify inventory, which factors must be considered?1. Demand uncertainty of each item2. Cumulative percentage of items3. Cumulative percentage usage value of items4. Overall inventory turnover
Answer(s): C
ABC analysis is applied to stock and its management. It is based loosely on the Pareto principles, better known as 80/20 rule. Pareto principle is the theory that 80% of outcome results from 20% of inputs. For example, 80% of sales are to the top 20% of customers; 80% of spend on inventory is accounted for by the top 20% of stock items.The ABC concept is based on Pareto's law. The following steps are carried out for the ABC analy-sis.- Step 1: Compute the annual usage value for every item in the sample by multiplying the annual requirements by the cost per unit.- Step 2: Arrange the items in descending order of the usage value calculated above.- Step 3: Make a cumulative total of the number of items and the usage value.- Step 4: Convert the cumulative total of the number of items and usage values into a percentage of their grand totals.- Step 5: Draw a graph connecting cumulative % items and cumulative % usage value. The graph is divided approximately into three segments, where the curve sharply changes its shape. This indicates the three segments A, B and C.LO 2, AC 2.1
"A measure of the ability of an organisation to supply customers without delay" is the best defini-tion of which of the following:
In inventory management, service level is the expected probability of not hitting a stock-out during the next replenishment cycle or the probability of not losing sales. Key performance indicators (KPIs) can be used to analyse data based on performance objectives and set actionable goals for improvement. KPIs can be developed in conjunction with suppliers as well as others, and can be used to measure the essential elements of the process. Safety stock is the amount of inventory a business needs to have to achieve a certain level of risk mitigation when it comes to stockouts.Reorder level (or reorder point) is the inventory level at which a company would place a new order or start a new manufacturing run.
CIPS study guide page 131LO 2, AC 2.3
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