Supply Management — 2020

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

July 2020

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

Question 1(a) — 12 marks

Explain six circumstances that may justify the use of manual materials handling system in an organization.

Model answer

  1. Low handling volume: occasional movements may not justify specialised equipment investment.
  2. Short movement distances: light items can be moved efficiently over a small work area.
  3. Suitable loads: materials are small and light enough to handle safely using proper manual methods and aids.
  4. Limited capital: mechanisation may be uneconomical for the expected work, provided manual work remains safe.
  5. Irregular tasks: varied, non-repetitive movements may require flexibility that a fixed automated system cannot provide economically.
  6. Site constraints: narrow, temporary or uneven work areas may prevent effective use of powered equipment.

Question 1(b) — 8 marks

Outline four measures that a supply chain manager may take to ensure selection of an effective mode of transport.

Model answer

  1. Assess the product’s weight, volume, perishability, value and safety requirements.
  2. Compare required delivery speed and reliability with each available mode.
  3. Evaluate total transport cost, including handling and transfer costs.
  4. Check route accessibility, capacity and compatibility with collection and final delivery.

Question 2(a) — 10 marks

Kaka Enterprises has decided to adopt U-flow layout design in its newly constructed warehouse. Highlight five benefits that may accrue to the organization from adopting this layout design.

Model answer

  1. Shared frontage can improve use of receiving and dispatch bays.
  2. Staff and equipment can be deployed between receipt and dispatch activities.
  3. Fast-moving goods can be positioned close to the common front area.
  4. Access concentrated on one side can simplify security and supervision.
  5. Other sides of the building may remain available for extension, subject to site constraints.

Question 2(b) — 10 marks

Explain five consequences of using sub-standard material handling equipment in the operations of an organization.

Model answer

  1. More accidents: inadequate strength, guards or controls increase injury risk.
  2. Product damage: unstable or unsuitable equipment can crush, drop or contaminate materials.
  3. Frequent breakdowns: unreliable equipment interrupts materials flow and production.
  4. Higher total cost: repairs, replacement, lost output and claims can exceed initial savings.
  5. Poor productivity: slow, inaccurate or difficult operation increases handling time and staff effort.

Question 3(a) — 10 marks

Many food products manufacturers prefer aluminium packaging materials. Explain five reasons that may account for this preference.

Model answer

  1. Barrier protection: suitable aluminium packaging limits exposure to light, moisture and gases.
  2. Low weight: light packaging reduces handling and transport effort.
  3. Formability: aluminium can be made into cans, trays, foil and other useful shapes.
  4. Heat tolerance: suitable designs support processing and temperature changes.
  5. Recyclability: recovered aluminium can be reprocessed, supporting material recovery where collection systems exist.

Question 3(b) — 10 marks

Explain five factors that may affect efficient planning for material requirements in an organization.

Model answer

  1. Forecast accuracy: unreliable demand estimates cause wrong material quantities and timing.
  2. Production information: current schedules and accurate bills of materials determine gross requirements.
  3. Stock-record accuracy: incorrect usable balances and outstanding orders distort net requirements.
  4. Supplier lead times: variable availability complicates when orders should be placed.
  5. Resource constraints: funds, storage capacity, staff and information systems limit what can be planned and implemented.

Question 4(a) — 10 marks

Outline five measures that an organization may take to enhance efficiency of its distribution system.

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 4(b) — 10 marks

Explain five advantages of adopting the fixed order quantity inventory control system in an organization.

Model answer

  1. Consistent replenishment quantities: repeated order sizes simplify purchasing and receiving arrangements.
  2. Economical orders: a suitably calculated quantity can balance ordering and holding costs.
  3. Prompt response: continuous review triggers an order when the reorder point is reached.
  4. Reduced stockout exposure: timely triggers combined with suitable safety stock support availability.
  5. Easier supplier planning: standard quantities help suppliers arrange packaging, transport and production capacity.

Question 5(a) — 10 marks

Mfalme Distributors Limited has decided to relocate its main warehouse from a multi-storeyed building to a single-storeyed building. Highlight five reasons that may have influenced such a decision.

Model answer

  1. Avoids vertical movement and dependence on lifts.
  2. Supports easier vehicle and handling-equipment access.
  3. Permits heavier floor loads where the ground-supported structure is suitable.
  4. Simplifies the layout, supervision and flow of goods.
  5. Allows easier expansion and evacuation subject to the available site and design.

Question 5(b) — 10 marks

Outline five ways in which an organization may reduce costs related to packaging materials.

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 6(a) — 10 marks

Explain five benefits that may accrue to an organization from adopting an integrated distribution system.

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 6(b) — 10 marks

Outline five challenges faced by air transport operators in Africa.

Model answer

  1. High aircraft acquisition, leasing, fuel and maintenance costs.
  2. Limited airport infrastructure and handling capacity on some routes.
  3. Shortages of specialised aviation and technical skills.
  4. Variable demand and low load factors on commercially thin routes.
  5. Complex cross-border permissions, charges and operating requirements.

Question 7(a) — 10 marks

Explain five factors that may contribute to effective inventory management in an organization.

Model answer

  1. Reliable demand forecasts: accurate requirements reduce both shortages and excessive holdings.
  2. Suitable replenishment controls: reviewed order quantities, reorder points and safety stocks match demand and lead-time risk.
  3. Accurate records: timely receipts, issues and physical checks keep decisions based on reliable balances.
  4. Capable suppliers: dependable lead times, quality and delivery quantities reduce uncertainty.
  5. Proper storage and accountability: suitable conditions, trained staff and clear controls prevent loss, damage and unauthorised issues.

Question 7(b) — 10 marks

Outline five objectives of supply logistics.

Model answer

  1. Make required materials available at the right place and time.
  2. Deliver suitable quantities and quality to support operations and customers.
  3. Minimise total logistics cost for the required service level.
  4. Protect goods from loss, damage and deterioration.
  5. Coordinate information, inventory, transport, storage and handling throughout the supply process.
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