Warehousing Operations and Stock Control — 2022

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

July 2022

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

Question 1(a) — 10 marks

Explain five circumstances under which an organisation may find it appropriate to centralise its warehousing operations.

Model answer

  1. Requirements are common: branches use similar goods that can be pooled in one stockholding point.
  2. Facilities are being duplicated: combining stores can reduce repeated rent, equipment and supervisory costs.
  3. Stronger control is needed: a central store makes stock policies, security and records easier to standardise.
  4. Demand can be served from one location: transport links and distances allow timely distribution from the central warehouse.
  5. Specialist facilities are expensive: one controlled store can provide suitable preservation and handling equipment more economically than several small facilities.

Question 1(b) — 10 marks

The issuing section of a warehouse is one the potential areas where Covid-19 viruses may be transmitted. Explain five preventative measures that a warehouse manager should take to avoid possible transmission.

Model answer

This answer addresses the historical examination scenario; it is not a statement of current Covid-19 rules.

  1. Reduce crowding: stagger collection times and limit unnecessary attendance at the issuing counter.
  2. Improve ventilation: allow effective airflow in enclosed working and waiting areas to reduce accumulation of infectious particles.
  3. Use suitable face coverings in the relevant risk setting: staff and visitors should follow the organisation’s applicable protective arrangements.
  4. Provide hygiene facilities: enable hand washing or sanitising and appropriate cleaning of shared equipment and frequently touched surfaces.
  5. Keep infectious staff away from shared work: encourage prompt reporting of symptoms and apply the relevant isolation or absence procedure.

Question 2(a) — 10 marks

Jamaa Limited has decided to automate its material inspection process. Explain five ways in which such automation may lead to cost reduction in the process.

Model answer

  1. Lower routine labour cost: automated checks reduce the time staff spend making repeated measurements.
  2. Faster throughput: inspecting more items in less time reduces queues and inspection delays.
  3. More consistent detection: repeatable checks reduce missed defects and the downstream costs of rework or returns.
  4. Less destructive testing: suitable automated non-destructive checks may reduce the value of products consumed in inspection.
  5. Reduced recording effort: automatic capture and reporting of results avoid repeated manual entry and associated errors.

Question 2(b) — 10 marks

Mandix confectionery bakes a single product for the general market. Outline five classification under which the goods of the company may fall.

Model answer

These classifications use different bases: production stage, end user, durability, shelf life and physical form.

  1. Finished goods: the baked product has completed production and is ready for sale.
  2. Consumer goods: it is intended for purchase and use by final consumers.
  3. Non-durable goods: it is normally consumed rather than used repeatedly over a long life.
  4. Perishable goods: its quality may deteriorate during storage and it has a limited shelf life.
  5. Tangible goods: it is a physical product that can be stored, handled and counted.

Question 3(a) — 10 marks

Changle Limited has declined a proposal to automate their stock location method. Outline five reasons that may account for the reluctance.

Model answer

  1. High purchase, installation and integration costs.
  2. Insufficient staff skills and additional training needs.
  3. A small or simple store for which the existing system is adequate.
  4. Unreliable power, connectivity or technical support.
  5. Resistance to change and concern about disruption during implementation.

Question 3(b) — 10 marks

Explain five advantages to an organisation of using the U-flow stores layout in its warehouse.

Model answer

  1. Shared facilities: receiving and dispatch on the same side can share docks, equipment and staff.
  2. Easier supervision: managers can observe both incoming and outgoing movements from a concentrated area.
  3. Short travel for fast-moving goods: frequently handled items can be placed near the shared front area.
  4. Flexible labour use: staff can move between receiving and dispatch as workload changes.
  5. Controlled access: fewer external entry points simplify checking and security arrangements.

Question 4(a) — 10 marks

Highlight five ways in which a medical institution may efficiently preserve its pharmaceutical products.

Model answer

  1. Store each product under its labelled temperature and other environmental conditions.
  2. Maintain and monitor the required cold chain for temperature-sensitive products.
  3. Protect products from unsuitable light, moisture and contamination with appropriate packaging and storage.
  4. Rotate stock by expiry date and segregate expired or damaged products.
  5. Keep accurate batch, expiry and storage-condition records, with controlled access.

Question 4(b) — 10 marks

Explain five advantages to an organisation of using containers for packaging its goods.

Model answer

  1. Protection: suitable containers shield goods from impact, weather and contamination.
  2. Security: sealed containers make unauthorised access easier to detect and reduce casual pilferage.
  3. Easier handling: standard containers can be moved using compatible equipment, reducing repeated handling of individual packages.
  4. Intermodal movement: appropriate containers transfer between transport modes without unpacking the goods.
  5. Efficient stacking and storage: regular shapes allow orderly use of space when weight and stacking limits are observed.

Question 5(a) — 10 marks

A certain organisation recently decided to use drones to handle its goods. Outline five reasons that may have influenced this decision.

Model answer

  1. Rapid movement of small suitable consignments.
  2. Access to locations difficult to reach using ordinary routes.
  3. Reduced need for staff to enter certain hazardous or hard-to-access areas.
  4. Automation of repeated movements where suitable navigation and control systems exist.
  5. Greater flexibility for small urgent deliveries within the drones’ operating capacity and permitted conditions.

Question 5(b) — 10 marks

Explain five benefits that may accrue to a firm from adopting the ABC method of stock control in its operations.

Model answer

ABC normally classifies items by annual usage value; operationally critical items may also need special controls regardless of value.

  1. Focused attention: high annual-usage-value A items receive close review because errors in them have the greatest financial effect.
  2. Efficient control effort: lower-value C items can use simpler controls, reducing unnecessary administration.
  3. Lower capital tied up: careful replenishment of expensive A items limits excessive investment in stock.
  4. Better purchasing priorities: staff concentrate negotiation and supplier follow-up on economically significant items.
  5. Appropriate counting: high-priority items can be checked more frequently, improving the reliability of important balances.

Question 6(a) — 10 marks

Explain five factors that a warehouse officer may consider when choosing a stock recording method to use in an organisation.

Model answer

  1. Transaction volume: a large number of movements may require a faster automated method.
  2. Cost: purchase, implementation and ongoing operation should be affordable relative to the benefits.
  3. Required accuracy and speed: the method should provide reliable balances when decisions are needed.
  4. Staff capability: users must have the skills or training needed to operate the method correctly.
  5. Available infrastructure and security: power, equipment, backup and access controls must support dependable operation.

Question 6(b) — 10 marks

The management of Kambi Limited has constituted a team to carry out a stock taking exercise. Outline five activities that the team would be expected to cover when carrying out the exercise.

Model answer

  1. Identify the stock items and their storage locations.
  2. Count, weigh or measure the physical quantities using suitable methods.
  3. Inspect and record damaged, obsolete or expired stock separately.
  4. Compare the physical results with stock records and investigate differences.
  5. Prepare an authorised report and recommend the necessary record adjustments or corrective actions.

Question 7(a) — 10 marks

A certain organisation has been experiencing increased incidents of fraud in its warehouse operations. Explain five measures that the warehousing manager should take to address this problem.

Model answer

  1. Separate duties: different staff should authorise, receive, issue and record goods so one person cannot conceal an entire transaction.
  2. Require controlled documents: numbered, approved receipt and issue records provide a traceable basis for stock movements.
  3. Restrict access: only authorised staff should enter stores or change stock records, with activity logs where possible.
  4. Check independently: surprise counts and reconciliation of physical stock with records identify unexplained discrepancies.
  5. Investigate and follow up: examine unusual transactions promptly, act on evidence and review controls to prevent recurrence.

Question 7(b) — 10 marks

Explain five benefits that may accrue to an organisation from appropriately coding its materials.

Model answer

  1. Accurate identification: a unique code distinguishes items with similar names and reduces selection errors.
  2. Faster retrieval: codes link goods to their storage locations and speed up picking.
  3. Simpler records: short standard references make transactions easier to record and retrieve.
  4. Better communication: departments and suppliers can refer consistently to the same item.
  5. Improved control: coded data supports analysis of stock balances, usage and replenishment requirements.

November 2022

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

Question 1(a) — 10 marks

A seed distribution company has decided to centralize its warehousing function. Explain five reasons that may justify this decision.

Model answer

  1. Lower duplicated costs: one warehouse can replace repeated facilities, equipment and supervisory overheads.
  2. Better preservation: specialised seed-storage conditions can be maintained consistently at a central facility.
  3. Stronger stock control: central records and supervision improve tracking of quantities, batches and expiry-related requirements.
  4. Pooled inventory: common stock can serve several markets, reducing duplicated buffers and uneven availability between stores.
  5. Coordinated distribution: a single dispatch point can consolidate orders and plan deliveries more efficiently where the transport network permits.

Question 1(b) — 10 marks

Explain five safety measures that an organization may put in place when handling poisonous substances.

Model answer

  1. Identify hazards clearly: label containers and make the relevant safety information available to staff.
  2. Train handlers: explain safe procedures, exposure risks and the correct response to spills or accidental contact.
  3. Use suitable protection: provide task-appropriate gloves, eye protection and other protective equipment specified for the substance.
  4. Control exposure: use suitable ventilation, closed containers and designated handling areas to minimise inhalation or contact.
  5. Plan emergencies: provide suitable spill-response arrangements, washing facilities and prompt reporting and medical-assistance procedures.

Question 2(a) — 10 marks

Monda Limited incurred high demurrage charges in the last financial year. Explain five measures that the company may put in place to reverse the situation.

Model answer

  1. Prepare documents early: complete accurate clearance and delivery paperwork before cargo arrives to avoid administrative delays.
  2. Arrange funds promptly: have money available for required charges so that cargo can be released within the allowed period.
  3. Coordinate collection: book suitable transport and receiving capacity before release rather than waiting until free time has expired.
  4. Monitor deadlines: track arrival, release and return dates and investigate exceptions immediately.
  5. Speed up unloading and equipment return: provide adequate staff and handling equipment and return containers or other equipment within the agreed allowance.

Question 2(b) — 10 marks

Explain five challenges that a warehouse manager may face when curbing fraudulent activities in a warehouse.

Model answer

  1. Collusion: staff or outsiders may cooperate to bypass controls and conceal theft.
  2. Poor records: incomplete or inaccurate documents make genuine errors difficult to distinguish from deliberate misuse.
  3. Limited resources: insufficient security, audit staff or systems restrict monitoring and investigation.
  4. Weak reporting culture: employees may fear retaliation or hesitate to report suspected wrongdoing.
  5. Complex movements: large transaction volumes, multiple locations and difficult-to-count goods create opportunities to hide discrepancies.

Question 3(a) — 10 marks

Explain five indicators of an efficient issuance function in a warehouse.

Model answer

  1. Prompt fulfilment: authorised requests are supplied within the required time.
  2. Item accuracy: the goods issued match the requested description and specification.
  3. Quantity accuracy: issues contain the correct measured or counted amount.
  4. Proper authorisation: goods are released only against valid approved requests.
  5. Reliable records: each issue is documented and stock balances are updated promptly.

Question 3(b) — 10 marks

Outline five basis that an organization may use when classifying its materials.

Model answer

  1. Nature or physical properties of the material.
  2. Purpose or intended use.
  3. Stage in production, such as raw materials, work in progress or finished goods.
  4. Annual usage value or financial significance.
  5. Storage requirements, including perishability or hazards.

Question 4(a) — 10 marks

Explain five factors that an organization should consider when constituting a stock-taking team.

Model answer

  1. Independence: counters should be sufficiently separate from custody and record-keeping to provide an objective check.
  2. Competence: members need suitable counting, identification and recording skills.
  3. Stock complexity: technical items may require staff who can distinguish grades, units and condition.
  4. Workload and deadline: the number of locations and items should determine an adequate team size.
  5. Integrity and coordination: trustworthy members with clear responsibilities and competent supervision improve reliability of the exercise.

Question 4(b) — 10 marks

Outline five circumstances under which the fixed stock location method may be appropriate in a warehouse.

Model answer

  1. The item range and stock volumes are relatively stable.
  2. Sufficient space exists to reserve a dedicated position for each item.
  3. Frequent picking makes familiar permanent locations useful.
  4. Goods require specific compatible storage or handling conditions.
  5. A simple manual system is needed and staff can readily identify fixed positions.

Question 5(a) — 10 marks

Explain five circumstances under which an organization may computerize its stock records.

Model answer

  1. Transaction volumes are high: automated processing handles receipts and issues faster than manual records.
  2. Several locations must be coordinated: shared records provide visibility of stock across stores.
  3. Timely information is essential: management needs current balances for ordering, production or customer commitments.
  4. Manual errors are frequent: validation and controlled processing can reduce arithmetic and transcription mistakes.
  5. Detailed reporting is required: analysis of usage, age, value and replenishment is difficult or slow using paper records.

Question 5(b) — 10 marks

Outline five activities that may be undertaken in the marshalling area of a warehouse.

Model answer

  1. Bringing picked items together for individual customer orders.
  2. Checking that order quantities and item identities are correct.
  3. Packing and labelling consignments.
  4. Sorting and staging goods by route, destination or loading sequence.
  5. Preparing dispatch documents and transferring completed consignments for loading.

Question 6(a) — 10 marks

Lead time variability affects that amount of goods to order. Explain five causes of such variations.

Model answer

  1. Supplier workload changes: production queues may be longer or shorter when order volumes vary.
  2. Input shortages: missing materials or components delay supplier production unpredictably.
  3. Transport disruption: congestion, breakdowns or unsuitable weather alter transit times.
  4. Administrative delays: approval, document correction or clearance may take different amounts of time for each order.
  5. Quality problems: failed inspections and replacement or rework extend the time before acceptable goods become available.

Question 6(b) — 10 marks

Explain five factors that an organization may consider when choosing a materials preservation method for its goods.

Model answer

  1. Nature of the goods: food, metal, chemicals and other materials face different forms of deterioration.
  2. Required storage period: longer holding periods may require more durable protection or tighter environmental control.
  3. Environmental conditions: temperature, humidity, light and pest exposure affect the suitable method.
  4. Compatibility and safety: the treatment must not damage the goods, contaminate them or create unacceptable risks.
  5. Cost and available facilities: the method should provide adequate protection using affordable equipment, skills and operating resources.

Question 7(a) — 10 marks

Explain five measures that an organization may adopt to minimize the obsolescence risk of its materials handling equipment.

Model answer

  1. Forecast future needs: buy equipment suited to likely changes in goods, volumes and warehouse operations.
  2. Choose adaptable designs: modular or upgradeable equipment can be modified instead of being entirely replaced.
  3. Check supplier support: availability of spares, software updates and technical service helps sustain useful operation.
  4. Review technology regularly: planned upgrades can address emerging requirements before equipment becomes unsuitable.
  5. Use flexible acquisition arrangements: leasing or shorter replacement cycles may reduce exposure where technology or handling needs change rapidly.

Question 7(b) — 10 marks

Explain five ways in which an organization may reduce its packaging cost.

Model answer

  1. Standardise sizes: fewer common package designs simplify purchasing and reduce inventory variety.
  2. Use appropriate material quantities: right-sized packs avoid unnecessary material without sacrificing protection.
  3. Buy economically: suitable bulk purchasing and supplier negotiation can reduce unit cost.
  4. Reuse suitable containers: returnable packaging spreads acquisition cost over several uses.
  5. Improve packing operations: suitable equipment, staff training and reduced waste lower labour and material losses.
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