Question 1

Is it essential for every type of warehouse to incorporate access to natural lighting as a means to reduce electrical costs?

Options :

A : No, because some types of stock are sensitive to sunlight

B : Yes, because sunlight sterilises inventories in damp conditions

C : No, because only ventilation can help to reduce the humidity in the warehouse

D : Yes, because organisation-s need for artificial lighting and heating will reduce

Answer: B

Question 2

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 3

A retailer wants to improve its service level in inventory management from 95% to 97%. Which of the following is the best course of action?

Options :

A : Decreasing safety stock

B : Holding more cycle stock

C : Increasing safety stock

D : Expanding replenishment lead time

Answer: A

Question 4

A restaurant needs to buy a new freezer. The owner applies total cost of ownership model to calculate the life-time cost of the freezer. This equipment has a price tag of $1,000, the supplier can offer free delivery if the restaurant pays off immediately. Estimated electricity consumption of the freezer is $200 in 5 years. The supplier ascertains that the freezer is very durable, buyer doesn't need to care about maintenance costs. However, if the restaurant needs better protection from breakdowns, the warranty is free for the first 12 months after the purchase. This warranty package can be extended once for another 24-month period with the cost of $75. After 5 years, the buyer will be able to resell this freezer for $250. What would be the estimated total cost of ownership of this freezer if the restaurant owner buys the extended warranty package?

Options :

A : $1,525

B : $1,025

C : $1,200

D : $1,275

Answer: B

Question 5

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?

Options :

A : Holding costs

B : Cost of stockouts

C : Acquisition costs

D : Disposal costs

Answer: C

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