3E Materials strategies

Question 1

Forecasting

Answer 1

is a materials
planning tool that predicts
customer demand for an
upcoming period using past
data and market trends.

Question 2

Forecasting Efficiency

Answer 2

Having enough materials minimises halts
in the production process which improves
productivity.

Question 3

Forecasting effectiveness

Answer 3

Forecasting improves a business’s
ability to meet customer demand which can contribute to increased customer satisfaction, sales, and market share.

Question 4

Forecasting advantages

Answer 4

• Can reduce the cost of storage as it
  prevents the need for a large space
  to store materials.
• Forecasting prevents the excessive
  ordering of materials that may go
  to waste if unneeded. This can help
  minimise the business’s impact
  on the environment and improve
  its reputation.

Question 5

Forecasting disadvantages

Answer 5

• It can be time consuming to analyse
  historical data and market trends.
• Businesses may need to hire
  forecasting specialists, which
  increases training and wage costs.

Question 6

A master production
schedule (MPS)

Answer 6

is a plan that outlines what
a business intends to
produce, in specific
quantities, within a set
period of time.

Question 7

A master production
schedule (MPS) Efficiency

Answer 7

Prevents a business from producing
an excessive amount of products,
which optimises the use of resources
by reducing wastage.

Question 8

A master production
schedule (MPS) effectiveness

Answer 8

A business is more likely to produce the correct quantity of products to meet customer demand, which can improve customer satisfaction and increase sales and market share.

Question 9

A master production
schedule (MPS) advantages

Answer 9

• Clear rostering can allow
  employees to develop a positive
  work-life balance.
• By determining specific details
  about how production will occur,
  it is less likely production will be
  brought to a halt and time is wasted
  due to an organisation error.

Question 10

A master production
schedule (MPS) disadvantages

Answer 10

• It can be time consuming to map
  out details of production
• Implementing and maintaining this
  plan can be expensive.

Question 11

Materials requirement
planning (MRP)

Answer 11

is a process that itemises the
types and quantities of
materials required to meet
production targets set out
in the master production
schedule.

Question 12

Materials requirement
planning (MRP) Efficiency

Answer 12

Having the exact materials needed for production reduces the amount of excess stock that expires or becomes damaged in storage which optimises resources by reducing waste.

Question 13

Materials requirement
planning (MRP) effectiveness

Answer 13

Ensures there are sufficient materials to meet customer demand. Meeting customer demand helps meet the objective of increasing customer satisfaction and sales.

Question 14

Materials requirement
planning (MRP) advantages

Answer 14

• Materials requirement planning
  ensures a business only has the
  exact materials it needs, decreasing
  waste generated in production. This
  can help minimise the business’s
  impact on the environment and
  improve its reputation.
• Accurate ordering of the quantities
  of materials required avoids excess
  storage and therefore reduces
  associated expenses.

Question 15

Materials requirement
planning (MRP) disadvantages

Answer 15

• It can be time consuming to
  constantly update the materials plan.
• Implementing and maintaining the
  materials plan can incur additional
  administrative and training costs.

Question 16

Just in Time (JIT)

Answer 16

is an
inventory control approach
that delivers the correct
type and quantity of
materials as soon as they
are needed for production.

Question 17

Just in Time (JIT) efficiency

Answer 17

Holding minimal stock can free up areas in the workspace that can be utilised to increase production.

Question 18

Just in Time (JIT) effectiveness

Answer 18

Costs saved from reducing storage space can be used in other areas of the business, such as sales and marketing, which can meet the objective of increasing sales.

Question 19

Just in Time (JIT) advantages

Answer 19

• Reduces storage costs and expenses
  associated with waste, meaning this
  money can be used in other areas
  of the business.
• Allows a business to switch to the
  production of a different product
  without wasting resources as there
  are minimal materials on hand
  to go through.

Question 20

Just in Time (JIT) disadvantages

Answer 20

• Discounts from bulk buying
  supplies may be reduced.
• A business may fail to meet
  customer demand from a lack of
  reserves stock which may cause
  damage to a business’s reputation.