Question 1

A pharmaceutical company frequently buys large quantities of raw materials for batch production. Due to regulatory changes, some materials are now under scrutiny for causing severe side effects. What type of stock do these materials now represent for the pharmaceutical company?

Options :

A : Buffer Stock

B : Independent Demand Stock

C : Obsolescence Stock

D : Redundant Stock

Answer: C

Question 2

What advantage can the use of ABC classification of stock provide in warehouse design?

Options :

A : It allows the organisation to categorise items in alphabetical order for easier storage and retrieval

B :

It gives purchasing staff more time to concentrate on those items that have most financial benefit to the organisation

C :

It assists in deciding on the most appropriate layout, handling systems, and what type of picking system to introduce

D : It determines where each item is to be located within the warehouse to aid inspection procedures

Answer: C

Question 3

Which of the following are examples of subjective methods of forecasting? Select TWO that apply. Trend line analysis Moving averages Market research Expert opinion Seasonal variations

Options :

A : 1 and 2 only

B : 3 and 4 only

C : 2 and 5 only

D : 1 and 5 only

Answer: B

Question 4

Ranger Mobile Ltd is a new smartphone manufacturer that uses the just-

Options :

A : Insurance premiums

B : Resale value of the warehouse

C : Costs of facilities management

D : Technology upgrade costs

E : Initial construction costs

Answer: C,D

Question 5

GAP Ltd is a retail business that wants to reduce its spending on stock. Its current procurement process is manual, repetitive and slow. The management team plans to use procure-to-pay (P2P) software to streamline the process and cut costs. What kind of cost is GAP aiming to lower?

Options :

A : Cost of stockouts

B : Acquisition costs

C : Holding costs

D : Disposal costs

Answer: B

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