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CIPS L4M7 Practice Exam & Exam L4M7 Fee
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CIPS L4M7 Certification Exam is an ideal choice for professionals who are looking to enhance their career prospects in the asset management sector. CIPS Whole Life Asset Management certification can provide professionals with the necessary skills and knowledge to effectively manage assets across a range of industries, including manufacturing, construction, and infrastructure. Additionally, the certification demonstrates a commitment to professional development and can help professionals stand out in a competitive job market. Overall, the CIPS L4M7 Certification Exam is an excellent choice for professionals who want to broaden their knowledge and expertise in asset management, and who are looking to take their career to the next level.
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CIPS Whole Life Asset Management Sample Questions (Q65-Q70):NEW QUESTION # 65
A major investment bank is planning to purchase a complex banking system that will interface with multiple applications at varying times of the day. Before deploying the system, there are various levels of testing that must be performed through joint testing between the in-house team and off-shore testing consultants. The testing will be performed in a resource-constrained shared environment and managed by the on-shore development team. The costs for testing are generally classified as...?
- A. Maintenance costs
- B. Acquisition costs
- C. Purchase prices
- D. Insurance
Answer: B
Explanation:
In the scenario, the buying organisation (investment bank) must conduct various types of testing before the deployment of the software system. These tests can be functional testing, factory ac-ceptance testing and/or user acceptance testing. The costs for all these types of testing are classified as acquisition costs with regards of total cost of ownership.
NEW QUESTION # 66
Which of the following best describes the relationship between a service level and safety stock?
- A. A service level decreases in proportion to a decrease in safety stock
- B. When safety stock is zero the service level always equals zero.
- C. A safety stock is not always required to achieve a required service level
- D. A service level increases in proportion to an increase in safety stock
Answer: C
Explanation:
Holding extra stocks will always improve customer service levels, or at least reduce the risk of them falling.
This implies that if an organisation aims at higher service levels, they should have larger safety stock.
However, increasing safety stock is not the only solution to improve service level. The widespread adoption of just-in-time (JIT) techniques particularly in the automotive industry has greatly reduced costs with increased service levels as well as the additional benefit of increased problem visibility.
The correct answer should be 'A safety stock is not always required to achieve a required service level'.
Reference: CIPS study guide page 104-105
LO 2, AC 2.2
NEW QUESTION # 67
A company has realised that in the current business environment factors other than profit are also important. The organisation is concerned about the social and environmental impact of a business in pursuit of profits. Is minimising costs the most appropriate course to follow?
- A. Yes, as this guarantees the minimum impact on the environment
- B. No, as maximising costs will mean that more care is taken of the environment
- C. Yes, because if costs are minimised profits will increase
- D. No, the best approach would be the triple bottom line
Answer: D
NEW QUESTION # 68
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. The cumulative cash flows generated by the asset
- C. The cost of the asset
- D. Shareholders' equity
- E. Dividends paid
Answer: B,C
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.
NEW QUESTION # 69
U-shape flow layout can utilise handling equipment if the high demands items locate adjacent to shipping docks. Is this statement true?
- A. No, because aisles between racks in U-shape flow are too small for any handling equipment
- B. Yes, because U-shape layout allows S-line routing more efficient
- C. No, because cross-docking is impossible in U-shape flow warehouse
- D. Yes, because this layout places receiving docks and despatch docks close to one another
Answer: D
Explanation:
A 'U' flow occurs when the goods receipt and dispatch functions are located at the same end of a warehouse building.
Products flow in at receiving, move in to storage in the back of the warehouse, and then to shipping, which is located at the adjacent to receiving on the same side of the building.
Items with higher throughput level are located closer to the loading bays. An example of a 'U' flow design can be seen in the diagram below.
Diagram Description automatically generated

Advantages of 'U' Flow
- Excellent utilization of dock resources because the receiving and shipping processes can share dock doors
- Facilitating cross-docking because the receiving and shipping docks are adjacent to one another and may be co-mingled
- Excellent lift truck utilization because put away and retrieval trips are easily combined and be-cause the storage locations closest to the receiving and shipping docks are natural locations to house fast moving items
- Yields excellent security because there is a single side of the building used for entry and exit
NEW QUESTION # 70
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