Free CIPS L4M7 Practice Exam with Questions & Answers | Set: 7

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

Decisions regarding stores and warehouse locations involve a complex range of issues that are unique to each business. Most storage facilities and location decisions are based on a combination of qualitative and quantitative analysis.

Qualitative analysis uses subjective judgment to analyze a situation based on non-quantifiable in-formation, such as potential markets for new products, forecast on possible risks that may happen, etc.

Quantitative analysis (QA) is a technique that uses mathematical and statistical modeling, meas-urement, and research to understand behavior. Quantitative analysts represent a given reality in terms of a numerical value. This may include the following:

- Cost analysis for the current premises and future predictions based on current premises

- Cost analysis for routine operations

- Current inventory performance measures: lead times, service levels, rate of stock turn, stock-outs in a given period and stock cover

To get a big picture of current situation and future demands, organisation should combine both qualitative and quantitative methods so that useful information is achieved and well-informed decisions are made.

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.

Key considerations in choosing a warehouse location include:

Local regulations: Compliance with bylaws and other local authority requirements.

Nature of items stored: Warehouses for perishable or hazardous items may have specific location requirements.

These factors ensure the warehouse is compliant and suitable for the type of inventory stored, optimizing safety and operational efficiency, both crucial in whole-life asset management.

A contract for hire allows the hirer to use the item for an agreed period and rate, without ownership transferring. This option provides flexibility and avoids the financial commitment of ownership, aligning with whole-life asset management when short-term use or flexibility is more beneficial than purchase.