L4M7 Exam Dumps : Whole Life Asset Management

Explanation

Implementing a full ERP system is not an easy option. They are complex systems and the disad-vantages include the following:

- The installation of the ERP system is costly. ERP consultants are very expensive take approxi-mately 60% of the budget.

- The success depends on the skills and experience of the workforce, including education and how to make the system work properly.

- Resistance in sharing internal information between departments can reduce the efficiency of the software.

- The systems can be difficult to use.

- Change of staff, companies can employ administrators who are not trained to manage the ERP system of the employing company, proposing changes in business practices that are not synchro-nized with the system.

- Having an ERP system has many advantages, but does not guarantee the total success of the company. Organizational culture, know how to involve staff and anticipate changes that will suffer the organization using this system of administration, are important elements for the completion of the implementation.

- The effectiveness of the ERP system may decrease if there is resistance to share information be-tween business units or departments. Due to strong changes that implementation of the ERP system brings in the culture of work, there may be poorly trained or disinterested in making use of the same staff...

- The benefits of having an ERP system are not presented immediately with the implementation of the software, they will be evident long after the system is running.

- The culmination of the implementation depends on the ability and skill of the workforce, also involves education and training, to make the system is correctly applied.

Explanation

Holding costs (carrying costs) are the costs associated with the storage and handling of physical stock. There are two different types of holding costs:

- Costs related to the value of the goods: financial costs (i.e. the interest on the working capital tied up in inventory, which may be the bank borrowing rate or the company's target for return on capital); cost of insurance; losses due to product deterioration; losses due to obsolescence and redundancy of inventory; losses due to theft, accidental damage etc.

- Costs related to the physical characteristics of the inventory include the following: storage space; power, heat and lighting of the store; movement equipment; labour costs; administration costs.

Explanation

A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment is also leased. Since the lessee does not own the asset, it is not responsible for disposing the assets, and therefore, disposal costs are not attributable to the lessee. The lessee usually incurs rentals and operating costs. Finally, a company should treat the lease the same as other contracts, which they must qualify the supplier.