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NEW QUESTION 48
Which of the following best describes what happens when order volumes from customers increase and multiply through the supply chain?
- A. Forrester effect
- B. Seasonal demand
- C. Opitz system
- D. Pareto curve
Answer: A
Explanation:
The bullwhip effect (or Forrester effect) is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain.
Seasonal demand: consumer interest in purchasing particular products only during a specific peri-od within the calendar year.
OPITZ is a coding system used to form Groups in Group Technology philosophy of Manufactur-ing.
The Pareto Curve is the shape created when the bars of a Pareto Chart are progressively summed and the points joined together. The final curve ends at 100% of items in the chart, which means that you can then draw a line across at 80% and 'bounce' it down to find the bar which, when combined with all bars to its left, will give 80% of all items.
Reference:
LO 2, AC 2.3
NEW QUESTION 49
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...?
- A. Closed-loop recycling
- B. Open-loop recycling
- C. Carbon recycling
- D. Reuse
Answer: 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
NEW QUESTION 50
XYZ Inc opens a tender to purchase new forklift trucks for their new established warehouse. In the final round, there are two suppliers remain who offer two different bids. Supplier A's bid has high initial investment. After calculating the net present value, the NPV in year five is positive. On the other hand, supplier B's bid has low purchase price, with the NPV in year five is negative. If the NPV is the sole selection criterion, XYZ Inc should select the bid which has...?
- A. Zero NPV
- B. The lowest NPV
- C. Negative NPV
- D. Positive NPV
Answer: D
Explanation:
Net present value (NPV) is the 'today' net value that deprives from 'future' cash flow of an invest-ment or a capital purchase. Net Present Value is a helpful tool for assessing the total lifetime value of an investment. Procurement professionals or investors can base on this value to make decision to achieve value for money. Generally, an organisation should select the offer which has the highest NPV among their options. Preferably, the NPV of an capital investment should be positive, which means the investment eventually adds value to the business.
Reference:
LO 3, AC 3.2
NEW QUESTION 51
Which of the following best describes available inventory (also known as inventory position)?
- A. The amount of inventory on hand in excess of expected demand
- B. The amount of inventory on hand
- C. The amount of inventory on hand plus the amount of inventory on order
- D. The amount of inventory on order only
Answer: C
Explanation:
Available inventory (or Inventory position - IP) is equal to inventory on-hand plus quantity on order minus backorder (if any) Reference:
LO 2, AC 2.3
NEW QUESTION 52
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