Materials Management

Question 1

materials management

Answer 1

ensures that materials are received and stored in right quantities and at the right time, so they are available when required. Involves sourcing, procurement, storage and utilisation of direct or indirect materials.

Question 2

materials handling definition

Answer 2

refers to handling of goods in warehouse and distribution points, adequate materials handling result in more efficient production process and cost savings.

Question 3

forecasting definition

Answer 3

relies on data from past and present, allowing business to analyse trend. Business will use forecasting to develop a plan to reduce uncertainty of events. A business can estimate or produce what materials are needed, in what quantities.

Question 4

forecasting advantages

Answer 4

• ensures a business maintains an appropriate level of inventory
• ensures a business doesn’t find itself underproducing, resulting in a loss of customers, decline in market share

Question 5

Forecasting limitations

Answer 5

• making use of historical data doesn’t guarantee past events will continue in future
• will always be somewhat inaccurate as its a guess

Question 6

Master production schedule (MPS)

Answer 6

is a plan that describes what is to be produced, what quantities, how and when. Plan is linked to delivery dates or contact for delivery in future.

Question 7

Materials requirement planning (MRP)

Answer 7

completed after the business has a understanding of quantities and time frame involved. Items of all materials involved in production to meet the orders.

Question 8

Strengths of MPS and MRP

Answer 8

• allow a business to avoid overproducing or underproducing
• allow a business to predict future needs of a business
• can be used to make adjustments to production
• allows a business to schedule changes when new products are introduced

Question 9

Limitations of MPS and MRP

Answer 9

• both rely on information, errors may occur in materials planning process
• the cost can be inhibitive, software and other resources may need to be purchased.

Question 10

inventory control definition

Answer 10

system used to ensure costs associated with maintaining inventory of materials are kept to a minimum.

Question 11

Just In Time

Answer 11

ensures the right amount of materials and parts arrive just as they are needed for production. Requires supplier to be carefully chosen, then organised so deliveries are reliable and received.

Question 12

Just In Time (JIT) strengths

Answer 12

• holding less stock in storage reduce storage costs
• reduces the risk of any waste occurring in storage, lost, damaged or stolen

Question 13

Just In Time (JIT) Limitations

Answer 13

• supplier deliveries must be reliable
• can increase transportation costs as orders are arriving in smaller quantities more regularly