Pass the CIPS CIPS Level 4 Diploma in Procurement and Supply L4M7 Questions and answers with CertsForce

The triple bottom line (TBL) framework evaluates organizational performance based on:

Economic sustainability: Focusing on financial stability and profitability.

Environmental sustainability: Ensuring that business activities minimize negative ecological impacts.

Social sustainability: Committing to ethical practices and community well-being.

TBL aligns with whole-life asset management principles by incorporating sustainability into asset use and disposal, ensuring long-term organizational value beyond just financial metrics.

Explanation

Material requirement planning (MRP) is a production planning and material (inventory) control system used in manufacturing. Objectives of MRP are to ensure materials are available for production while minimising inventory and to plan production and procurement activities.

MRP process is described in the graph below:

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Explanation

Materials that will not easily deteriorate, are generally stored in open or fairly covered areas (stockyard). The materials are usually in bulk, like steel plates or coils casting, timber coal, steel barrels, cable drums, piping, lampposts, lorries, etc.

Stockyards are open or semi-covered areas that are used for the following:

- Bulk loose or packaged materials

- Bulky or oversized items that may be difficult to move inside

- Materials that may require specialised handling, loading or unloading

Below image shows the example of a stockyard that stores loose coal and its handling system.

LO 1, AC 1.1

Radio Frequency Identification (RFID) enables real-time tracking of items and is commonly used for security in retail to prevent theft. The tags are activated within a specified range, and alarms trigger when items exit without deactivation. RFID in asset management helps in tracking high-value items, ensuring security and reducing loss.

Explanation

A master production schedule (MPS) is a plan for individual commodities to be produced in each time period such as production, staffing, inventory, etc.[1] It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded.[2] This plan quantifies significant processes, parts, and other resources in order to optimize production, to identify bottlenecks, and to anticipate needs and completed goods. Since a MPS drives much factory activity, its accuracy and viability dramatically affect profitability. Typical MPSs are created by software with user tweaking.

Leasing allows an organization to predict costs accurately, as installment payments are pre-agreed. This makes financial planning simpler, which is especially beneficial in whole-life asset management where minimizing upfront capital expenditure is often a priority. Leasing also reduces the risk associated with asset obsolescence.

Subjective forecasting methods, like market research and expert opinion, rely on qualitative judgment rather than numerical data. These methods are valuable when historical data is limited, or when anticipating market changes. Whole-life asset management may use subjective forecasts for long-term planning and to account for factors not captured in quantitative data.

Explanation

JIT, often referred to as the Toyota production system (TPS), originated in Toyota’s manufacturing plants in Japan in the early 1970s. It was first introduced by the organisation's owner, Taiichi Ohno. The prime goal of JIT is the achievement of zero inventories.

The just-in-time objectives of eliminating waste can be summarised in the 'five zeros: zero defects, zero set-up times, zero inventories, zero handling and zero lead times.