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CIPS L4M7 Exam
Whole Life Asset Management (Page 2 )

Updated On: 30-Jan-2026
Page 2 of 28
PDF with 255 Questions

XYZ Ltd organises a meeting in order to decide on the safety stock level of a strategic material which is used in XYZ latest product - DMD. To do this, they must forecast the future demand for this new product. In the meeting, external consultants are invited to join with cross-functional team. Each person of the group anonymously replies to questionnaires and subsequently receives feedback in the form of a statistical representation of the "group response," after which the process repeats itself. The goal is to reduce the range of responses and arrive at something closer to expert consensus. XYZ Ltd is using which forecasting method?

  1. Objective forecasting technique
  2. Delphi method
  3. Holt-Winters seasonal method
  4. Time series analysis

Answer(s): B

Explanation:

Delphi method was developed in the 1950s, originally to forecast the impact of technology on warfare. The method entails a group of experts who anonymously reply to questionnaires and subsequently receive feedback in the form of a statistical representation of the "group response," after which the process repeats itself. The goal is to reduce the range of responses and arrive at something closer to expert consensus. The Delphi Method has been widely adopted and is still in use today. Delphi method is a subjective forecasting technique Holt-Winters forecasting is a way to model and predict the behavior of a sequence of values over time--a time series. Holt-Winters is one of the most popular forecasting techniques for time series.

It's decades old, but it's still ubiquitous in many applications, including monitoring, where it's used for purposes such as anomaly detection and capacity planning. Time series analysis is a statistical technique that deals with time series data, or trend analysis. Time series data means that data is in a series of particular time periods or intervals. Objective forecasting approaches are quantitative in nature and lend themselves well to an abun- dance of data. There are three categories of objective forecasting methods: time series, caus- al/econometric, and artificial intelligence.
LO 2, AC 2.3



International Standard Book Number (ISBN) is a unique international identification system for each product form or edition of a monographic publication published or produced by a specific publisher.
ISBN is an example of...?

  1. Check digit
  2. Harmonized system
  3. Own product code system
  4. Industry standard code

Answer(s): D

Explanation:

The International Standard Book Number (ISBN) is a numeric commercial book identifier which is intended to be unique. Publishers purchase ISBNs from an affiliate of the International ISBN Agency. ISBN is standardised by ISO 2108:2017. ISBN is an example of industry standard code as it applies to commercial books around the world.
Check digits are additional numbers or characters added to codes that a computer uses to verify the number is valid. The intention is to reduce the likelihood of miskeying an item and hitting an alternative live item. More often, a system is devised which a computer can calculate using combination of numbers.
Own product code system: an organisation will use its own product code system. This has the ad- vantage that the organisation can construct a code that is effective and fits with its software and variety of items covered.
The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of tariff nomenclature is an internationally standardized system of names and numbers to classify traded products. It came into effect in 1988 and has since been developed and maintained by the World Customs Organization (WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization based in Brussels, Belgium, with over 200 member countries.


Reference:

CIPS study guide page 38-39
LO 1, AC 1.2



For which of the following is the `delphi method' used?

  1. Controlling products
  2. Valuing stock
  3. Classifying products
  4. Forecasting demand

Answer(s): D

Explanation:

Delphi method is a structured forecasting technique using a panel of experts and a number of rounds of questioning. Responses are shared after each round and the experts encouraged to recon-sider their own responses. It is intended to achieve a consensus view.


Reference:

CIPS study guide 109-111
LO 2, AC 2.3



XYZ Ltd is looking for new office space overseas. To keep the overhead expense minimal, it chooses leasing rather than purchasing new office. In leasing contract, which of the following costs are most likely to be attributable to the lessee?
1. Disposal costs
2. Rentals
3. Operating costs
4. Vendor selection costs

  1. 2, 3 and 4
  2. 1, 2 and 3
  3. 1, 3 and 4
  4. 1, 2 and 4

Answer(s): A

Explanation:

A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment is also leased. Since the lessee does not own the asset, it is not responsible for disposing the assets, and therefore, disposal costs are not attributable to the lessee. The lessee usually incurs rentals and operating costs. Finally, a company should treat the lease the same as other contracts, which they must qualify the supplier.


Reference:

CIPS study guide page 144-147
LO 3, AC 3.1



Practice of unloading goods from inbound delivery vehicles and loading them directly onto out- bound vehicles is known as ...?

  1. Tracing and tracking
  2. Automation
  3. Cross-docking
  4. Decommissioning

Answer(s): C

Explanation:

Cross-docking is the practice of unloading goods from inbound delivery vehicles and loading them directly onto outbound vehicles. By eliminating or minimizing warehouse storage costs, space requirements and inventory handling, cross-docking can streamline supply chains and help them move goods to market faster and more efficiently.
Cross-docking usually takes place in a dedicated docking terminal in a warehouse, where inbound goods are first received at a dock and sorted according to their final destinations. They are then moved to the other side of the dock via forklift, conveyor belt or other equipment and loaded on outbound vehicles.
Cross-docking works best with products that need to be transported quickly, such as food, that have already been sorted and labeled for customers, do not need quality inspections or have steady demand.


Reference:

- CIPS study guide page 16
- Cross-docking
LO 1, AC 1.1



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