QUESTION: 29

ASI Ltd is known for its commitment to sustainability. ASI builds railroad ties and pilings using recycled plastic bottles and industrial waste instead of standard materials such as wood, steel, and cement. This practice helps the company save 15% in compare with traditional material purchases.
Which pillar of sustainability would include the practice of ASI Ltd?

People and Planet
Profit and Expense
Planet and Profit
Profit and People

Answer(s): C

Explanation:

The triple bottom line is a sustainability framework that examines a company's social, environment, and economic impact (or People, Planet, Profit). ASI Ltd practice would reduce the waste into the environment as well as keep the business more profitable. So the correct answer should be Planet and Profit.

Reference:

- 25 Years Ago I Coined the Phrase "Triple Bottom Line." Here's Why It's Time to Rethink It.
- CIPS study guide page 202
LO 3, AC 3.3

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QUESTION: 30

GAP Ltd is a growing retail business. It spends a lot of money on buying stock for sale. However, the procurement process is still largely manual. This manual process contains a lot of tasks that are repeated for each procurement event and time consuming. The company management team decides to adopt procure-to-pay (P2P) software in order to eliminate duplicate activities and improve process efficiencies.
Which type of cost is GAP targeting?

Holding costs
Acquisition costs
Disposal costs
Cost of stockouts

Answer(s): B

Explanation:

Costs of holding inventory include the following:
- Acquisition cost
- Inventory holding cost
- Costs of stock-outs
Acquisition costs follow the typical procure-to-pay model. Benefits of procure-to-Pay (P2P) software include:
- Vendor Management, which includes researching, selecting, engaging with, and evaluating the performance of suppliers who make up your supply chain.
- Purchase Requisition Workflows, or the formal process of creating and submitting a purchase requisition (PR) for approval to meet a specific business need.
- Purchase Order (PO) Workflows, covering the creation of a formal, detailed PO from the purchase requisition, including information on the quantity and quality of goods and services, as well as specific terms and conditions.
- Receiving, which includes the acceptance of physical goods (or review of quality and completion for services) and entering the accepted order into inventory, tracking, and accounting systems.
- Invoice Management, during which the invoice is compared to the original PO to verify pricing, quality, quantity, and terms have been met.
- Accounts Payable Workflows, wherein the accounts payable department processes the invoice for payment, submits the payment to the vendor, and reconciles any related financial entries in the accounting system.
The software is intended to help reduce the acquisition costs.
LO 2, AC 2.2

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QUESTION: 31

A brewery sells its beer in aluminum cans. It recycles the cans by using contractors to collect and mold the used cans. This is an example of...?

Closed-loop recycling
Carbon recycling
Open-loop recycling
Reuse

Answer(s): A

Explanation:

There are two main processes of recycling open loop recycling and closed loop recycling.

Open Loop Recycling
Open loop recycling is a method that delays disposal by converting manufactured goods and spent materials into both new raw materials, which can be used for a manufacturing purpose, as a fuel source for a different manufacturing process and waste products. Typically, materials recycled through open-loop recycling will be used for purposes different from their original purpose.

This means that the input into the recycling process is converted to a new raw material, which can be used as an input into another manufacturing process.
Materials in an open loop recycling process are treated using various forms of treatment including heat, chemical reactions, or physical crushing.

Closed Loop Recycling
Closed loop recycling is a process where waste is collected, recycled and then used again to make the same product it came from. This process is restorative and regenerative by design and aims to keep materials at their highest utility and value always.
Closed loop recycling is focused on resource sustainability, which means that recycling of a material can be done indefinitely without degradation of properties. In this case, conversion of the used product back to raw material allows repeated making of the same product, which helps hazardous waste generators reduce carbon footprint and achieve corporate sustainability initiatives. Closed-loop recycling is common in specialized industries, such as the computer and battery industries, which use expensive or complex goods that cannot easily be broken down post- consumption into constituent materials.

A prime example of a closed-loop recycling process is the recycling of aluminum cans. Aluminum can be recycled to form new cans with little material degradation or waste creation.

Reference:

- Open Loop Vs Closed Loop Recycling
- CIPS study guide page 203
LO 3, AC 3.3

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QUESTION: 32

A hospital is purchasing a new software product that will advise nurses when to give medications to hospitalised patients. This is a mobile application that will be used on tablets carried by the nurses. The software is being developed and tested by a company that specialises in mobile medical applications. This software will interface with existing hospital software that orders the medications from the pharmacy.
Which acceptance test activity will be required to check whether the new software integrates well with current IT system?

Health and safety testing
Dry running
Stress testing
Compatibility testing

Answer(s): D

Explanation:

In the scenario, one of the requirements for the new software is that the new one will interface with current system. Compatibility testing would be the most appropriate test here. There are also other acceptance tests that are mentioned in L4M7 study guide:
- Health and safety test aims at establishing new health and safety routines, providing guidance notices and documentation and ensuring designed-in safety in operation.
- Stress testing (sometimes called torture testing) is a form of deliberately intense or thorough testing used to determine the stability of a given system, critical infrastructure or entity. It involves testing beyond normal operational capacity, often to a breaking point, in order to observe the results.
- A dry run (or a practice run) is a testing process where the effects of a possible failure are inten- tionally mitigated. For example, an aerospace company may conduct a "dry run" test of a jet's new pilot ejection seat while the jet is parked on the ground, rather than while it is in flight. The usage of "dry run" in acceptance procedures (for example in the so-called FAT = factory ac- ceptance testing) is meant as following: the factory which is a subcontractor must perform a complete test of the system it has to deliver before the actual acceptance by customer.

Reference:

CIPS study guide page 150-151
LO 3, AC 3.1

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