CIPS L4M7 Exam Dumps - Easiest Preparation Method [2025]

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CIPS L4M7 Exam is a certification exam that assesses the knowledge and skills of professionals in the field of asset management. L4M7 exam covers a range of topics, including asset management principles, asset valuation, risk management, lifecycle costing, maintenance management, and disposal management. CIPS Whole Life Asset Management certification is highly valued by employers worldwide and demonstrates that the candidate has the necessary knowledge and skills to manage assets effectively and efficiently, thereby delivering value to the organization.

CIPS L4M7 Certification Exam is a comprehensive program that covers all aspects of asset management, providing professionals with the knowledge and skills needed to manage assets effectively throughout their entire life cycle. By obtaining this certification, asset management professionals can enhance their career prospects and demonstrate their expertise to employers and clients.

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CIPS Whole Life Asset Management Sample Questions (Q250-Q255):

NEW QUESTION # 250
The ABC approach involves classifying inventory items by unit cost, with expensive items classi-fied as 'A' items and low cost items classified as 'C' items. Is this statement true?

A. Yes, 'C' items with the lowest unit prices are the tail spends
B. No, ABC analysis considers the usage of each inventory item
C. No, ABC analysis considers the supply risks associated with an inventory item
D. Yes, 'A' items represent approximately 20% of total unit prices

Answer: B

Explanation:
ABC analysis is an approach for classifying inventory items based on the items' consumption val-ues. Consumption value is the total value of an item consumed over a specified time period, for example a year. The approach is based on the Pareto principle to help manage what matters and is applied in this context:
- A items are goods where annual consumption value is the highest. Applying the Pareto principle (also referred to as the 80/20 rule where 80 percent of the output is determined by 20 percent of the input), they comprise a relatively small number of items but have a relatively high consumption value. So it's logical that analysis and control of this class is relatively intense, since there is the greatest potential to reduce costs or losses.
- B items are interclass items. Their consumption values are lower than A items but higher than C items. A key point of having this interclass group is to watch items close to A item and C item classes that would alter their stock management policies if they drift closer to class A or class C. Stock management is itself a cost. So there needs to be a balance between controls to protect the asset class and the value at risk of loss, or the cost of analysis and the potential value returned by reducing class costs. So, the scope of this class and the inventory management policies are determined by the estimated cost-benefit of class cost reduction, and loss control systems and processes.
- C items have the lowest consumption value. This class has a relatively high proportion of the total number of lines but with relatively low consumption values. Logically, it's not usually cost-effective to deploy tight inventory controls, as the value at risk of significant loss is relatively low and the cost of analysis would typically yield relatively low returns.
LO 2, AC 2.1

NEW QUESTION # 251
What cost factors should be considered for the maintenance and repair of manufacturing equipment?
* Direct labor cost
* Cost of utilities during the use of the equipment
* Cost of the goods being sold
* Guarantee and warranty cost

A. 1 and 2 only
B. 3 and 4 only
C. 1 and 4 only
D. 2 and 3 only

Answer: C

Explanation:
Maintenance and repair costs include:
* Direct labor: Expenses for personnel performing maintenance tasks.
* Warranty costs: Expenses associated with warranty obligations or repairs within the warranty period.
These costs are part of whole-life asset management, which aims to accurately budget for and manage ongoing equipment expenses.

NEW QUESTION # 252
An organisation may incur additional costs in stockout events. Which of the following is an exam-ple of costs of inventory stockouts?

A. The costs of storage space owned that cannot be used for other profitable purposes when inventories decrease
B. The return forgone by investing capital in inventory rather than elsewhere
C. The lost contribution margin on sales forgone as a result of customer dissatisfaction due to unavailability of goods
D. The costs of obsolescence and costs of insurance that change with the quantity of in-ventory held

Answer: C

Explanation:
Stockout is a situation where an inventory item is not available when required. The costs associated with a stockout include the following:
- Lost of production output - there will be no production until the stockout is resolved (new stock is acquired).
For factory operating 24/7 with no spare capacity, this lost output will not be able to be recovered.
- Costs of machine downtime and of overhead spread over a reduced level of output
- Costs of any action required to deal with the stockout...
- Loss of customer goodwill through inability to supply or late delivery
- Loss of sales or new orders
- Loss of market creditability

NEW QUESTION # 253
When purchasing a capital asset, an organisation should analyse the costs and benefits that the asset may bring. Which of the following factors are considered in cost-benefit analysis? Select TWO that apply.

A. Current liabilities in the balance sheet
B. Dividends paid
C. The cumulative cash flows generated by the asset
D. Shareholders' equity
E. The cost of the asset

Answer: C,E

Explanation:
A cost-benefit analysis is a process businesses use to analyze decisions (such as capital investment). The business or analyst sums the benefits of a situation or action and then subtracts the costs associated with taking that action.
A cost-benefit analysis (CBA) should begin with compiling a comprehensive list of all the costs and benefits associated with the project or decision.
The costs involved in a CBA might include the following:
- Direct costs would be direct labor involved in manufacturing, inventory, raw materials, manufacturing expenses.
- Indirect costs might include electricity, overhead costs from management, rent, utilities.
- Intangible costs of a decision, such as the impact on customers, employees, or delivery times.
- Opportunity costs such as alternative investments, or buying a plant versus building one.
- Cost of potential risks such as regulatory risks, competition, and environmental impacts.
Benefits might include the following:
- Revenue and sales increases from increased production or new product.
- Intangible benefits, such as improved employee safety and morale, as well as customer satisfaction due to enhanced product offerings or faster delivery.
- Competitive advantage or market share gained as a result of the decision.
An analyst or project manager should apply a monetary measurement to all of the items on the cost-benefit list, taking special care not to underestimate costs or overestimate benefits. A conservative approach with a conscious effort to avoid any subjective tendencies when calculating estimates is best suited when assigning a value to both costs and benefits for a cost-benefit analysis.
Finally, the results of the aggregate costs and benefits should be compared quantitatively to deter-mine if the benefits outweigh the costs. If so, then the rational decision is to go forward with the project. If not, the business should review the project to see if it can make adjustments to either increase benefits or decrease costs to make the project viable. Otherwise, the company should likely avoid the project.
Reference:
- Cost-Benefit Analysis (Investopedia)
- CIPS study guide page 175
LO 3, AC 3.2

NEW QUESTION # 254
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. Reuse
B. Carbon recycling
C. Closed-loop recycling
D. Open-loop recycling

Answer: C

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 # 255
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CIPS L4M7 Exam Dumps - Easiest Preparation Method [2025]

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CIPS Whole Life Asset Management Sample Questions (Q250-Q255):

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