Supply Management — 2022

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

July 2022

Paper codes: 2903/203
Time: Not shown in supplied scan
Instructions: Not shown in supplied scan

Question 1(a) — 10 marks

(MKL) Limited has decided to adopt pallet racking storage system in its warehouse. Explain five advantages the organisation may derive from adopting this system.

Model answer

  1. Better cubic-space use: racks permit safe storage above floor level.
  2. Easier access: suitable racking gives handling equipment organised access to pallet positions.
  3. Improved stock control: identified rack locations simplify counting and retrieval.
  4. Reduced damage: pallets are supported in defined positions instead of unstable floor stacks.
  5. Flexibility: appropriate rack configurations can accommodate different stock quantities and pallet dimensions.

Question 1(b) — 10 marks

Describe five features of an efficient transport system.

Model answer

  1. Timely delivery: goods reach the destination within the promised lead time.
  2. Reliability: consistent schedules and dependable capacity allow customers and warehouses to plan.
  3. Economy: routes, loads and vehicle use achieve the required service at reasonable total cost.
  4. Safety: suitable vehicles, trained drivers and cargo protection reduce accidents and damage.
  5. Accessibility and flexibility: the system can serve required destinations and adapt to changing volumes and conditions.

Question 2(a) — 10 marks

Outline five measures that an organisation may take to ensure effective scheduling of deliveries.

Model answer

  1. Use accurate order quantities, destinations and promised delivery times.
  2. Plan routes and combine compatible consignments.
  3. Match vehicle capacity and availability to the scheduled loads.
  4. Coordinate dispatch and receiving appointments with suppliers and customers.
  5. Track progress and revise schedules promptly when breakdowns, traffic or demand changes occur.

Question 2(b) — 10 marks

Wajibu Distributors is in the process of preparing a tool for measuring performance of its warehouse operations. Highlight five types of information that may be included in such a tool.

Model answer

  1. Inventory accuracy: compare physical quantities and locations with stock records.
  2. Space utilisation: assess effective use of floor and cubic storage capacity without unsafe congestion.
  3. Order-processing performance: measure picking accuracy, throughput and dispatch lead time.
  4. Cost and productivity: review cost per unit handled and output per employee or equipment hour.
  5. Safety and stock protection: assess accidents, damage, theft, deterioration and compliance with storage requirements.

Question 3(a) — 10 marks

Explain five ways in which Third Party Logistics (TPL) may add value to the customers in an organisation.

Model answer

  1. Specialist expertise: experienced logistics staff improve routing, handling and order fulfilment.
  2. Wider coverage: established networks allow deliveries to more destinations.
  3. Lower total cost: consolidated loads and shared facilities can reduce the cost of serving customers.
  4. Improved visibility: tracking and information systems provide timely delivery status.
  5. Flexible service: external capacity and value-added activities such as packing and returns handling support changing customer needs.

Question 3(b) — 10 marks

Explain five limitations of using Economic Order Quantity (EOQ) technique to manage inventory in an organisation.

Model answer

  1. Constant-demand assumption: the basic model is less reliable when demand is seasonal or highly uncertain.
  2. Stable-cost assumption: ordering and holding costs may change with volume or time.
  3. Instant replenishment assumption: real deliveries may be gradual, late or incomplete.
  4. No-shortage assumption: the basic model does not explicitly optimise shortages and service levels.
  5. Simplified purchasing conditions: quantity discounts, capacity limits and interdependent items require extensions rather than the basic formula.

Question 4(a) — 10 marks

The use of inter-modal transportation has gained popularity in the recent past. Outline five reasons that may account for this trend.

Model answer

  1. Combines the speed, reach or economy advantages of different modes.
  2. Standard containers reduce repeated cargo handling at transfer points.
  3. Enables long-distance movement with flexible road collection and final delivery.
  4. Can reduce total transport cost for suitable routes and volumes.
  5. Provides alternative route and mode options when a transport segment is disrupted.

Question 4(b) — 10 marks

Explain five disadvantages of using robots in handling materials in an organisation.

Model answer

  1. High investment cost: purchase, installation, guarding and integration require substantial capital.
  2. Specialist maintenance: skilled technicians and suitable spare parts are needed.
  3. Limited flexibility: major product or layout changes may require costly reprogramming or redesign.
  4. Operational dependence: a control-system or power failure can interrupt an integrated handling line.
  5. Workforce and safety challenges: retraining, job redesign and effective safeguards are needed to manage interaction between people and robots.

Question 5(a) — 10 marks

Explain five factors that may influence the choice of a material handling system to adopt in an organisation.

Model answer

  1. Material characteristics: weight, dimensions, fragility and hazards determine safe handling methods.
  2. Volume and flow: throughput, travel distances and frequency influence the capacity required.
  3. Building and layout: floor strength, aisle width, headroom and access constrain equipment choice.
  4. Total cost: compare purchase, operation, maintenance, training and expected savings.
  5. Flexibility and support: consider future product changes, staff skills, power reliability and availability of maintenance.

Question 5(b) — 10 marks

Outline five measures that an organisation may take to ensure efficient delivery of goods to its customers.

Model answer

  1. Plan routes and delivery schedules from accurate customer orders.
  2. Use suitable, roadworthy vehicles with appropriate load capacities.
  3. Train drivers and dispatch staff in safe, accurate order fulfilment.
  4. Package, label and load goods correctly for their destinations.
  5. Track deliveries and communicate promptly with customers about delays or changes.

Question 6(a) — 10 marks

Mimi Beverage Limited has decided to introduce returnable packages for its products. Outline five reasons that may have led to such a decision.

Model answer

  1. Lower packaging cost over repeated uses.
  2. Reduced consumption of new packaging materials.
  3. Less packaging waste requiring disposal.
  4. Durable containers that protect goods during repeated distribution.
  5. Stronger customer and distributor return arrangements that support a circular packaging system.

Question 6(b) — 10 marks

Outline five objectives of inventory control in an organisation.

Model answer

  1. Maintain sufficient stock for uninterrupted operations and customer service.
  2. Avoid excessive investment and unnecessary carrying costs.
  3. Minimise stock losses, damage and obsolescence.
  4. Provide accurate records for replenishment and accountability.
  5. Obtain an economical balance between ordering, holding and shortage costs.

Question 7(a) — 10 marks

Explain five advantages of using recycled materials to package goods.

Model answer

  1. Resource conservation: recovered inputs reduce reliance on virgin raw materials.
  2. Waste reduction: recycling diverts suitable material from disposal.
  3. Potential cost savings: competitive recovered materials can lower packaging input expenditure.
  4. Environmental reputation: responsible packaging can strengthen customer and stakeholder confidence.
  5. Supply diversification: using suitable recovered inputs adds an alternative source of packaging material.

Question 7(b) — 10 marks

Explain five factors that may hinder effective distribution planning in an organisation.

Model answer

  1. Unreliable demand data: inaccurate forecasts produce inappropriate capacity and stock plans.
  2. Resource shortages: limited funds, vehicles, facilities or staff restrict feasible service levels.
  3. Poor coordination: conflicting production, sales and logistics information disrupts planning.
  4. External uncertainty: traffic, weather, infrastructure failures and market changes upset assumptions.
  5. Weak information systems: limited visibility of orders, inventory and transport performance prevents realistic scheduling.

November 2022

Paper codes: 2903/203
Time: Not shown in supplied scan
Instructions: Not shown in supplied scan

Question 1(a) — 10 marks

A consultant has been hired by Kombia Limited to evaluate the effectiveness of its materials handling activity. Outline five aspects of the activity that the consultant would cover when carrying out the task.

Model answer

  1. Cost per unit handled and avoidable movement costs.
  2. Throughput, movement speed and delays.
  3. Equipment capacity, utilisation, condition and downtime.
  4. Product damage, loss and accuracy of movements.
  5. Employee safety, training and suitability of handling methods.

Question 1(b) — 10 marks

A preliminary warehouse design presented to the management for review has failed the approval stage. Explain five aspects of the design that may have led to this situation.

Model answer

  1. Insufficient capacity: the design cannot accommodate expected stock and throughput.
  2. Poor flow: long routes and crossing movements create congestion and excessive handling.
  3. Unsafe arrangements: inadequate exits, load-bearing provision or traffic separation expose people and stock to harm.
  4. Unsuitable facilities: access, ventilation, security or product-specific storage conditions fail operational requirements.
  5. Excessive cost or inflexibility: the design exceeds the budget or cannot adapt to foreseeable changes.

Question 2(a) — 10 marks

Explain five ways in which the marketing department may enhance performance of the supply management department in an organization.

Model answer

  1. Provide sales forecasts: expected demand guides material and stock planning.
  2. Share customer feedback: complaints and preferences help supply set appropriate quality and packaging requirements.
  3. Notify promotions early: advance warning allows procurement and logistics capacity to be arranged.
  4. Share market intelligence: competitor activity and product trends improve supply decisions.
  5. Coordinate order commitments: realistic promised quantities and delivery dates prevent avoidable emergency purchases and expediting.

Question 2(b) — 10 marks

Mr. Wamba, a distribution officer at Poto Limited intends to prepare a physical distribution plan for the company. Explain five factors he should consider when carrying out the task.

Model answer

  1. Demand and service requirements: forecast volumes, customer locations and delivery time expectations.
  2. Product characteristics: weight, volume, perishability, value and handling needs determine suitable distribution arrangements.
  3. Transport options: compare mode, route, capacity, reliability and total delivery cost.
  4. Storage and inventory resources: locate warehouses and stock levels so demand can be met economically.
  5. Organisational capacity: align the plan with available funds, staff, systems, equipment and production schedules.

Question 3(a) — 10 marks

Explain five challenges that a distribution firm may experience while controlling the movement of its products in the market.

Model answer

  1. Unreliable infrastructure: poor roads and terminal congestion cause delays.
  2. Limited tracking information: weak visibility makes it difficult to locate goods and respond to problems.
  3. Security risks: theft, diversion and damage threaten stock in transit.
  4. Variable demand: sudden order changes disrupt routes, capacity and inventory allocation.
  5. High operating costs: fuel, maintenance, labour and transport charges restrict the available distribution resources.

Question 3(b) — 10 marks

Explain five measures that a distribution company should take in order to minimize the costs associated with packaging of its goods.

Model answer

  1. Right-size packages: avoid excess material and empty space while retaining adequate protection.
  2. Standardise designs: use a limited range of suitable sizes to simplify purchasing and handling.
  3. Reuse and recycle: adopt economical returnable packs or recycled inputs where hygiene and performance allow.
  4. Buy economically: consolidate requirements and compare suppliers on total cost and consistent quality.
  5. Reduce damage and waste: train packers and improve design so savings do not create greater product-loss or transport costs.

Question 4(a) — 10 marks

Explain five ways in which the integrated supply logistics may add value in the operations of a distribution firm.

Model answer

  1. Lower total cost: coordinating transport, inventory, storage and information prevents local savings from creating larger costs elsewhere.
  2. Better service: joined-up order and stock information supports complete, timely deliveries.
  3. Less duplication: common processes and records reduce repeated data entry and unnecessary handling.
  4. Improved asset use: coordinated schedules make better use of vehicles, warehouse space and staff.
  5. Faster response: shared information enables departments and partners to adjust quickly to demand changes and disruptions.

Question 4(b) — 10 marks

Explain five challenges that an organization may experience when preparing a materials plan for its operations.

Model answer

  1. Uncertain demand makes required quantities and timing difficult to estimate.
  2. Inaccurate stock and bill-of-material records distort net requirements.
  3. Unreliable supplier lead times complicate purchasing schedules.
  4. Budget and storage constraints prevent the desired stock position.
  5. Poor coordination and late specification changes create conflicting requirements.

Question 5(a) — 10 marks

Explain five legal requirements that an organization should comply with when devising a packaging system for its products.

Model answer

Apply the specific rules for the product, packaging material and market. The answer identifies five legal compliance areas rather than claiming one packaging rule applies to every product.

  1. Product safety: packaging must be suitable for the product and must not create prohibited contamination or health risks.
  2. Accurate labelling: required identity, quantity, warnings and product information must be truthful and legible.
  3. Weights and measures: declared net contents must comply with applicable quantity and measurement rules.
  4. Hazardous-goods requirements: dangerous contents need the prescribed classification, marks, containment and transport warnings.
  5. Environmental controls: packaging materials, waste handling and recovery arrangements must meet the applicable environmental rules and restrictions.

Question 5(b) — 10 marks

Explain five benefits that a manufacturing firm may derive from effectively monitoring the performance of its distribution plans.

Model answer

  1. Cost control: comparing actual expenditure with targets reveals expensive routes, handling or storage activities.
  2. Better service: tracking timeliness, completeness and damage identifies problems affecting customers.
  3. Improved utilisation: vehicle, warehouse and labour data show where capacity is wasted or overloaded.
  4. Corrective action: early performance warnings allow managers to investigate causes and adjust plans.
  5. Better future decisions: reliable historical results support realistic budgets, targets and distribution-network improvements.

Question 6(a) — 10 marks

Anga Limited is in the process of reviewing the effectiveness of its inventory management system. Outline five aspects that should be covered during the review.

Model answer

  1. Accuracy and timeliness of inventory records.
  2. Stock availability, stockout frequency and service level.
  3. Holding levels, turnover and obsolete or slow-moving stock.
  4. Replenishment quantities, reorder points and supplier lead-time performance.
  5. Inventory-related costs, physical security and losses.

Question 6(b) — 10 marks

Outline five elements that may constitute the total costs in the integrated supply logistics operations.

Model answer

  1. Procurement and order-processing costs.
  2. Transportation and distribution costs.
  3. Warehousing and storage-facility costs.
  4. Inventory carrying costs, including capital and obsolescence.
  5. Packaging, materials handling and associated losses.

Question 7(a) — 10 marks

Doto Manufacturing Limited intends to develop a materials handling system for its operations. Explain five factors that may hinder the company from carrying out the exercise.

Model answer

  1. High investment cost: equipment, facilities, systems and integration may exceed available funds.
  2. Limited skills: staff may lack the technical ability to design, operate or maintain the system.
  3. Incompatible processes or infrastructure: existing layouts and technologies may not connect effectively.
  4. Resistance to change: departments or employees may oppose altered responsibilities and working methods.
  5. Uncertain operating requirements: unreliable data, variable volumes and supply disruption make system design and coordination difficult.

Question 7(b) — 10 marks

Pambo Limited has installed the live storage system in its warehousing operations. Explain five benefits that the firm may derive from such a system.

Model answer

  1. Automatic stock flow: gravity or powered lanes move goods towards the picking face, reducing repeated manual repositioning.
  2. Faster replenishment and picking: stock advances as front units are removed.
  3. Better space use: deep lanes can store more units with fewer access aisles.
  4. Stock rotation: properly designed first-in-first-out lanes reduce ageing and deterioration.
  5. Separation of operations: loading and retrieval at different ends can reduce interference and improve throughput.
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