Free Practice Questions for CIPS L4M7 Exam

Explanation

All risk management processes follow the same basic steps, although sometimes different jargon is used to describe these steps. Together these 5 risk management process steps combine to deliver a simple and effective risk management process.

Step 1: Identify the Risk. You and your team uncover, recognize and describe risks that might affect your project or its outcomes. There are a number of techniques you can use to find project risks. During this step you start to prepare your Project Risk Register.

Step 2: Analyze the risk. Once risks are identified you determine the likelihood and consequence of each risk. You develop an understanding of the nature of the risk and its potential to affect pro-ject goals and objectives. This information is also input to your Project Risk Register.

Step 3: Evaluate or Rank the Risk. You evaluate or rank the risk by determining the risk magni-tude, which is the combination of likelihood and consequence. You make decisions about whether the risk is acceptable or whether it is serious enough to warrant treatment. These risk rankings are also added to your Project Risk Register.

Step 4: Treat the Risk. This is also referred to as Risk Response Planning. During this step you assess your highest ranked risks and set out a plan to treat or modify these risks to achieve acceptable risk levels. How can you minimize the probability of the negative risks as well as enhancing the opportunities? You create risk mitigation strategies, preventive plans and contingency plans in this step. And you add the risk treatment measures for the highest ranking or most serious risks to your Project Risk Register.

Step 5: Monitor and Review the risk. This is the step where you take your Project Risk Register and use it to monitor, track and review risks.

With consignment stocking, the supplier retains ownership until the item is used by the customer. This approach minimizes the customer’s holding costs and improves cash flow, as payment is deferred until the item is consumed. It’s particularly beneficial in whole-life asset management for inventory flexibility and reduced capital commitment.

Explanation

Price setting mechanisms fall into two main categories: fixed and variable. A fixed price mecha-nism is a straightforward concept which typically results in a relatively stable budget that can be forecast. Variable mechanisms have an element of variable pricing per unit bought.

Setting a fixed price mechanism is in theory a relatively simple and straightforward concept, where the collector and the buyer agree on a fixed price for a specific material or mix of materials, for a certain length of time.

All other pricing mechanisms that are not fixed have an element of variable pricing per unit bought.

The most common variable pricing mechanisms can be divided into two groups:

1. Where the benefit accruing to the buyer from acquiring the material is used to calculate what the payment to the seller should be; or Approaches to Materials Sales: A guide for local authorities

2. Where the price paid is indexed to a published source of market price information. The above scenario demonstrates variable pricing mechanism using published sources on inflation rate and exchange rate. CIPS also refers this mechanism as adjustable prices.

Explanation

The total cost of ownership would be the sum of all estimated costs.

The costs are as the following:

- Purchase price: $1,000

- Electricity consumption: $200

- Extended warranty: $75

Total expense = $1,000 + $200 +$75 = $1,275. Then subtract the resale price from this sum, the total cost of ownership is $1,025.

Explanation

Reorder point is the point either in time or in a process when the next order should be placed.

Explanation

The most basic alarm consists of one or more sensors to detect intruders, and an alerting device to indicate the intrusion. However, a typical premises security alarm employs the following compo-nents:

- Premises control unit (PCU), Alarm Control Panel (ACP), or simply panel: The "brain" of the system, it reads sensor inputs, tracks arm/disarm status, and signals intrusions. In modern system, this is typically one or more computer circuit boards inside a metal enclosure, along with a power supply.

- Sensors: Devices which detect intrusions. Sensors may be placed at the perimeter of the protected area, within it, or both. Sensors can detect intruders by a variety of methods, such as monitoring doors and windows for opening, or by monitoring unoccupied interiors for motions, sound, vibration, or other disturbances.

- Alerting devices: These indicate an alarm condition. Most commonly, these are bells, sirens, and/or flashing lights. Alerting devices serve the dual purposes of warning occupants of intrusion, and potentially scaring off burglars. These devices may also be used to warn occupants of a fire or smoke condition.

- Keypads: Small devices, typically wall-mounted, which function as the human-machine interface to the system. In addition to buttons, keypads typically feature indicator lights, a small multi-character display, or both.etc.

- Interconnections between components. This may consist of direct wiring to the control unit, or wireless links with local power supplies.

In addition to the system itself, security alarms are often coupled with a monitoring service. In the event of an alarm, the premises control unit contacts a central monitoring station. Operators at the station see the signal and take appropriate action, such as contacting property owners, notifying police, or dispatching private security forces. Such signals may be transmitted via dedicated alarm circuits, telephone lines, or the internet.