CH2 - Material inventory and material requirements in the enterprise

Question 1

Tasks of materials management

Answer 1

• Purchasing (supplier selection, contracts, supplier
  diversification)
• Scheduling (inventory, demands, acquisition)
• Logistics (goods receipt, stocking, flow of material)
• Consignment
• Strategy, Monitoring and Controlling
• Determination of Consumption, Disposal and Recycling

Question 2

‼‼Magic triangle of materials management - draw and explain it

Answer 2

• Low material costs
• High delivery
• Low capital commitment

Question 3

Tasks of material scheduling

Answer 3

• Inventory: Comparison of actual stock and target Inventory, to identify discrepancy and to counteract them preventively
• Demands: identification of material requirements in follow-up periods
• Acquisition: identification of order quantity and time to order at optimal cost to satisfy material requirements
  of the planning period

Question 4

‼‼Materials management: Different items

Answer 4

Raw material:
-  direct component and high proportion of final goods
- component of parts list
Purchased parts
- self-contained components of final goods
- component of parts list
Auxiliary material
- direct component of final goods
- low value and low proportion
- not necessarily component of parts list
Operating supply items
- are used up in the production process directly or indirectly
- not component of parts list
Trading goods
- are purchased already as final goods
- are not processed
Operating resources
- facilities and equipment to produce goods
Services
- are purchased in addition
- growing importance

Question 5

Types of material requirements - Regarding source and product level

Answer 5

• Primary requirements: demand for salable products (final products, assemblies, components)
• Secondary requirements: demand for raw materials, parts and assemblies (to manufacture goods of primary requirements)
• Tertiary requirements: demand for auxiliary material and operating supply items (to manufacture goods of primary and secondary requirements)

Question 6

Types of material requirements - Regarding inventory

Answer 6

• Gross requirements: period-specific primary-,secondary or tertiary requirements
• Net requirements: Gross requirements minus available inventory

Question 7

⭐Types of determination of material requirements

Answer 7

• Deterministic (A- and B-parts): accurate determination of requirements concerning quantity and dates (based on
  specific orders or production programs)
• Stochastic (consumption-driven) C-parts: determination of requirements using demand forecasts (based on
  statistical analyzes)
  -Heuristic (estimation): determination of requirements (based on subjective estimates of the logistics manager)

Question 8

Steps of the stochastic determination of requirements

Answer 8

• Detection of time series
• Determination of consumption models (constant/trend/seasonal)
• Choice of method (moving average/exponential smoothing/regression analysis)
• Preparation of material requirements forecast
• Evaluation of forecast quality

Question 9

Consumption models for the stochastic determination of requirements

Answer 9

Without trend (constant model)
- Pure constant model
- Seasonal constant model
With trend (trend model)
- Pure trend model
- Seasonal trend model

Photo

Question 10

‼‼Types of costs to determine optimal order quantity - Please give 3 examples of each type of cost

Answer 10

PROCUREMENT COSTS

• costs of external procurement
  ordering costs
  discount, rebate, allowance
  additional costs of suboptimal order quantity
  transportation costs, insurance costs, costs of packaging
• costs of in-house production
  order processing costs
  set-up costs
  additional costs of suboptimal lot sizes

STORAGE COSTS
labor costs
operating costs
costs of employed capital and venture costs
control costs
costs of obsolescence
costs of maintenance

Question 11

‼‼ANDLER Model - How is the most cost effective order quantity calculated and which assumptions of the Andler Model are necessary?

Answer 11

ASSUMPTIONS
 Material requirements of the total period are fixed and comply with the order quantity.
 The total order quantity has to be divided into equal order quantity sizes.
 The outward stock movements are continuous and have equal lot sizes.
 There are no supply bottlenecks and no restrictions of stocking and factoring.
 There is no safety stock because of no time lag between stock withdrawal of the last unit
and reception.
 Acquisition prices are defined constant.

Photo

Question 12

‼‼Draft The storage model and term its operating figures

Answer 12

Photo

Question 13

⭐Please explain the area of conflict regarding the safety stock

Answer 13

PHOTO

Safety stocks have a negative impact on storage costs though simultaneously a positive impact on readiness for deliverx