CIPS Whole Life Asset Management L4M7 Exam Dumps: Updated Questions & Answers (January 2026)

Explanation

Dependent demand is the requirement for stock item which is directly related to and therefore de-pendent upon the rate of production (examples are: raw materials, components, energy).

Independent demand is the requirement for stock item which is not directly related to, and is therefore independent of rate of production.

'Number of independent demand items may be derived from the forecast': Although independent demand is called thus, it can still be influenced by economic factors external to the demand-supply model such as general consumer sentiment and consumers' available disposal income. However, businesses that need to predict the number of products with independent demand needed to sate their customers have it easier than businesses that must calculate the demand for products with dependent demand because there are fewer factors to consider.

'Dependent demand items are not directly correlated with production rate': As mentioned above, dependent demand items are directly correlated with production rate.

'All indirect supplies are independent demand items': Though most indirect supplier are inde-pendent demand, some are determined by the production rate, i.e. energy consumption of a major machinery.

'Car engine is an example of independent demand items in a car assembly plant': Car engine is a component in car which is the finished good of a car assembly plant, it is a dependent demand item.

LO 2, AC 2.1

Explanation

It would be really convenient if we could just hand our products directly to the customers, but that’s not possible. Packaging needs to be done for several reasons. Here are some of the most prominent ones:

1. Safety: Packaging is used to keep your product safe from external factors. It also prevents human tampering. If you want to sell fruit juice, you just can’t hand it over to customers. It should be packaged in something, like a stand up pouch.

2. Brand visibility: You provide the best product in your category and you want your customers to remember that. How else will you do that without using the right kind of creative food packaging?

3. Bundling it together: If you want to sell an ounce of something, you need to create a packet so that the right amount is bundled together.

4. Theft prevention: If you sell your product loose, there are chances that the retailer doesn’t give the right amount to the customer and saves some part for himself. There are other cases too where theft can be done in the absence of packaging.

Apart from these four, there are many other reasons why you should package your products.

Decommissioning is the process of safely retiring equipment from use. It involves steps such as cleaning, dismantling, and responsibly disposing of the asset, especially if it contains hazardous materials. Whole-life asset management includes decommissioning as a key phase, ensuring that assets are disposed of cost-effectively and in compliance with environmental standards.

Writing off obsolete stock is standard practice as it no longer holds any value for the organization. This allows for accurate financial reporting by removing items that cannot be sold or used from the balance sheet. Including it in closing stock would misrepresent asset values, while leaving it unsorted wastes valuable space.

Whole-life asset management emphasizes disposal or recycling options to avoid holding costs for unused assets, reducing storage costs and improving warehouse efficiency.

Including end-of-life packaging costs is essential when dealing with hazardous materials, as they often require special packaging and labeling for safe disposal. Whole-life asset management considers disposal costs in the total lifecycle cost to ensure compliance with regulations and prevent environmental harm.