Warehousing Operations and Stock Control — 2020

KNEC Diploma in Supply Chain Management, Module I. Original examination questions with explained model answers for revision.

July 2020

Paper codes: 2903/107
Time: Not shown in supplied scan
Instructions: Not shown in supplied scan

Question 1(a) — 10 marks

Explain the ways in which warehousing department may enhance efficiency of the marketing operations in an organisation.

Model answer

  1. Maintain availability: adequate usable stock allows marketing to fulfil customer demand without avoidable shortages.
  2. Protect quality: sound preservation ensures that goods reach customers in saleable condition.
  3. Dispatch promptly: efficient picking and loading support promised delivery times.
  4. Provide reliable information: accurate balances and availability dates help marketers make realistic commitments.
  5. Support campaigns: coordinating stock and dispatch capacity with promotions prevents increased demand from overwhelming supply.

Question 1(b) — 10 marks

Outline the reasons that may justify rejection of goods delivered to an organisation by a supplier.

Model answer

  1. Goods do not meet the ordered specification.
  2. Goods are defective or damaged.
  3. Goods are expired or have unacceptable remaining shelf life.
  4. Items are unauthorised substitutions or were not ordered.
  5. Required safety, quality or accompanying certification conditions have not been met.

Question 2(a) — 10 marks

XYZ Limited has been experiencing increased cases of loss of goods from its warehouses due to burglar incidents. Explain the measures that the management may put in place to minimise such incidents.

Model answer

  1. Strengthen physical barriers: secure doors, windows, fences and locks make unlawful entry more difficult.
  2. Control access: restrict entry to authorised persons and record visitors and vehicle movements.
  3. Improve surveillance: suitable lighting, alarms and monitored cameras help detect intrusion.
  4. Provide security patrols: trained guards and prompt response arrangements discourage and interrupt burglary.
  5. Review vulnerabilities: investigate incidents, check security equipment and correct weak points in buildings and procedures.

Question 2(b) — 10 marks

Explain the factors that a warehouse manager may consider when determining the number of staff to be engaged in a stock taking exercise.

Model answer

  1. Stock volume: more items and locations require more counting work.
  2. Item complexity: goods needing weighing, technical identification or condition assessment take longer than simple packaged items.
  3. Available time: a short completion deadline may require several teams working simultaneously.
  4. Methods and equipment: scanners, scales and well-organised count sheets can reduce the labour required.
  5. Staff competence: experienced counters may work accurately at a higher rate, while new staff need training and closer supervision.

Question 3(a) — 10 marks

Most organisations prefer the use of bar codes to identify items stored in their warehouses. Explain the reasons for the preference.

Model answer

  1. Faster entry: scanning captures item identifiers more quickly than repeated manual typing.
  2. Fewer transcription errors: correctly assigned and readable codes reduce mistakes in recording item numbers.
  3. Timely stock updates: scans can record receipts, movements and issues immediately in the stock system.
  4. Standard identification: one consistent code distinguishes goods and helps link records across operations.
  5. Better traceability: linking codes to batches and transactions assists investigation of stock movements and discrepancies.

Question 3(b) — 10 marks

Explain the ways in which an effective stock location system may contribute to efficiency in warehousing operations.

Model answer

  1. Faster retrieval: staff can go directly to the correct position instead of searching.
  2. Fewer picking errors: distinct item and location references reduce selection of wrong goods.
  3. Better space use: recorded positions help allocate appropriate available storage.
  4. Easier stock verification: clearly defined locations support complete and orderly counting.
  5. More efficient movement: planned routes and suitable locations reduce travel and repeated handling.

Question 4(a) — 10 marks

Outline the limitations of the Economic Order Quantity (EOQ) model of stock control.

Model answer

  1. The basic model assumes known, constant demand.
  2. It assumes stable ordering and holding costs.
  3. It assumes constant lead time and timely replenishment without shortages.
  4. It assumes replenishment of the full order at once rather than gradual delivery.
  5. It does not include quantity discounts or a changing unit price in its simplest form.

Question 4(b) — 10 marks

Explain the reasons that make it necessary for organisations to maintain stock records.

Model answer

  1. Know availability: balances indicate whether materials can meet current requests.
  2. Plan replenishment: usage and stock-position information identify when and how much to order.
  3. Trace movements: receipt and issue references show where goods came from and went.
  4. Support accounting: quantities and values provide a basis for inventory valuation and cost control.
  5. Detect discrepancies: comparing records with physical counts identifies errors, damage or possible theft.

Question 5(a) — 10 marks

Explain the ways in which a U-shaped stores layout may act as a deterrent against pilferage of goods in a store.

Model answer

A U-shaped layout supports these controls when access points, visibility and procedures are properly designed; its shape alone does not prevent theft.

  1. Concentrated entry points: receiving and dispatch on the same side simplify control of external movements.
  2. Shared supervision: one supervisory position can observe both incoming and outgoing activities.
  3. Easier security checks: guards can check documents and loads at a common controlled front area.
  4. Better staff observation: staff working near the same area can notice unusual movements more readily.
  5. Clear controlled routes: properly designed paths direct goods through checking points rather than uncontrolled exits.

Question 5(b) — 10 marks

Outline five environmental related factors that may adversely affect materials stored in a warehouse.

Model answer

  1. Unsuitable temperature.
  2. Excessive humidity or moisture.
  3. Pests and vermin.
  4. Excessive light or direct sunlight.
  5. Dust, fumes or other contamination.

Question 6(a) — 10 marks

Explain the benefits that may accrue to a company that uses standardised packages.

Model answer

  1. Lower purchasing costs: common designs can be bought in larger economical quantities.
  2. Easier handling: equipment and procedures can be designed around consistent sizes.
  3. Efficient storage: predictable dimensions simplify stacking and space allocation.
  4. Simpler control: standard pack quantities make counting and order preparation easier.
  5. Consistent protection and presentation: agreed materials and designs support reliable product quality and appearance.

Question 6(b) — 10 marks

Explain the measures that an organisation may put in place to ensure optimal utilization of a material handling equipment.

Model answer

  1. Select suitable equipment: match capacity and operating features to the goods and premises.
  2. Plan workloads: schedule jobs to reduce idle time and unnecessary empty movement.
  3. Train operators: competent staff use the equipment efficiently and within safe limits.
  4. Maintain equipment: preventive servicing reduces downtime and interrupted operations.
  5. Organise routes and loads: clear access and coordinated movements reduce congestion and repeated handling.

Question 7(a) — 10 marks

Explain the ways in which an organisation may minimise cases of dead stock.

Model answer

  1. Forecast needs carefully: base buying on realistic consumption rather than unsupported estimates.
  2. Set appropriate quantities: avoid large purchases that exceed likely usage before the item becomes obsolete.
  3. Review slow-moving items: early identification allows transfers, supplier returns or other authorised action.
  4. Coordinate changes: communicate design or production changes before purchasing items that will no longer be used.
  5. Maintain suitable rotation and records: use older usable stock appropriately and prevent forgotten items from accumulating.

Question 7(b) — 10 marks

Explain the factors that a storekeeper should consider before issuing goods from a warehouse.

Model answer

  1. Authorisation: confirm that a valid request is approved by the responsible person.
  2. Item identity: match the description, code and specification to the request.
  3. Quantity and availability: check the required amount and any reservations against usable stock.
  4. Condition and rotation: select goods fit for use and follow the appropriate batch or expiry policy.
  5. Recipient and documentation: confirm the destination and record the issue with acknowledgement where required.
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