Warehousing Operations and Stock Control (Supplied Revision Paper) — 2020

Additional theory revision supplied in the Module II ZIP under a Public Procurement and Finance filename. The printed content is Warehousing Operations and Stock Control, code 2903/107. The actual questions are reproduced here under their correct subject label.

July 2020 — supplied revision paper

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: dependable stock allows marketing to fulfil customer orders.
  2. Assure quality: suitable materials and supplier controls support the product claims made to customers.
  3. Provide cost information: accurate purchasing and logistics costs help marketing set viable prices.
  4. Coordinate promotions: demand forecasts and advance notice allow supply to prepare stock for campaigns.
  5. Deliver reliably: effective distribution improves customer satisfaction and supports repeat sales.

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 fail the agreed quality or technical specification.
  2. Items are damaged, contaminated, expired or otherwise unfit for use.
  3. The supplied type or quantity differs from the authorised order.
  4. Required certificates, identification or traceability evidence are missing.
  5. Delivery breaches a material contractual requirement that justifies rejection under the agreed terms.

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 protection: suitable doors, locks, fences and barriers make unauthorised entry harder.
  2. Control access: authorise visitors and staff access and keep entry and exit records.
  3. Improve detection: appropriate lighting, alarms and surveillance allow suspicious activity to be noticed.
  4. Provide security supervision: trained guards and patrols should respond to identified risks.
  5. Maintain accountability: regular stock checks and investigation of losses help identify security weaknesses and collusion.

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 and variety: more items and locations require more counting effort.
  2. Time available: a short counting window may require additional teams.
  3. Counting method and technology: scanners, cycle counting or manual methods affect productivity.
  4. Staff competence: experienced counters need less correction and supervision.
  5. Control requirements: independent verification, recounts and segregation of duties influence team size.

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 capture: scanning reduces the time spent entering item codes manually.
  2. Greater accuracy: properly managed codes reduce transcription errors.
  3. Consistent identification: each coded item can be linked to a standard record.
  4. Better traceability: transactions can connect items with locations, batches and movements.
  5. System integration: captured data can update stock and purchasing systems promptly.

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 find the required item without prolonged searching.
  2. Accurate put-away: designated locations reduce misplaced stock.
  3. Better space use: controlled locations help allocate capacity appropriately.
  4. Easier counting: clear positions support checks and discrepancy investigation.
  5. Improved flow: sensible allocation reduces travel, congestion and picking errors.

Question 4(a) — 10 marks

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

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(b) — 10 marks

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

Model answer

  1. Show available quantities and support timely replenishment.
  2. Provide accountability for receipts, issues and balances.
  3. Support physical-count reconciliation and loss investigation.
  4. Supply information for valuation, costing and financial reporting.
  5. Identify consumption patterns, slow-moving stock and inventory-performance trends.

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

  1. Concentrated access: receiving and dispatch on one side allow tighter control of movement.
  2. Easier supervision: a shared front operating area improves visibility of incoming and outgoing goods.
  3. Fewer uncontrolled openings: other external sides can be secured with limited routine access.
  4. Shared checking: security and records staff can monitor both receipt and issue activities.
  5. Traceable flow: defined routes and authorised transfer points make unexplained movement easier to detect.

Question 5(b) — 10 marks

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

Model answer

  1. Excessive heat or unsuitable temperature variation.
  2. Moisture, humidity, leaks or flooding.
  3. Dust, dirt, chemicals or other contamination.
  4. Pests such as insects and rodents.
  5. Excessive light, poor ventilation or unsuitable atmospheric conditions for the particular material.

Question 6(a) — 10 marks

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

Model answer

  1. Lower purchase cost: common designs permit economical quantities.
  2. Easier handling: consistent sizes fit equipment and unit loads.
  3. Better space use: uniform dimensions simplify stacking, storage and loading.
  4. Clearer control: standard units make counting, ordering and documentation easier.
  5. Reduced complexity: fewer package variants simplify training, packing and replacement.

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 and allocate equipment suited to the loads and routes.
  2. Train and authorise operators in safe use.
  3. Carry out planned inspection and maintenance.
  4. Schedule equipment to avoid idle time, congestion and overloading.
  5. Monitor utilisation, damage, breakdowns and operating costs and correct recurring problems.

Question 7(a) — 10 marks

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

Model answer

  1. Improve forecasts: purchase quantities that reflect realistic future usage.
  2. Review ageing reports: identify slow movement early and stop unnecessary replenishment.
  3. Control specification changes: coordinate redesign and product withdrawal with remaining stock.
  4. Rotate and redistribute: use older suitable stock first and transfer excess to locations that need it.
  5. Dispose promptly and learn: return, sell or otherwise lawfully remove unusable excess and correct the purchasing causes.

Question 7(b) — 10 marks

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

Model answer

  1. Authority: confirm an approved requisition from an entitled user.
  2. Correct item and specification: match the requested description and required quality.
  3. Quantity and availability: check the authorised amount against usable stock.
  4. Condition and rotation: issue serviceable goods in the appropriate FIFO or expiry sequence.
  5. Documentation and destination: record the issue, recipient, location and stock balance accurately.
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