Dp 5 - Strategies (Materials) Flashcards
Forecasting
a materials planning tool that predicts customer demand for an upcoming period using past data and market trends
Forecasting: Efficiency
forecasting decreases likelihood of ordering and storing excessive amounts of materials -> which optimises the use of resources by reducing waste
Forecasting: Effectiveness
Improves ability to meet customer demand -> which can contribute to increased customer satisfaction, sales and market share
Forecasting: +
+ Informed decisions about quantity of materials required can improve ability meet customer demand
+ Reduce the cost of storage as it prevents the need for a large space to store materials
Forecasting: -
- Business is too reliant on forecasting may be unable to meet unexpected increases in customer demand
- May need to hire forecasting specialists -> increases training and wage costs
Master Production Schedule
a plan that outlines what a business intends to produce, in specific quantities, within a set period of time
MPS: Efficiency
prevents from producing an excessive number of products, which optimises the use of resources by reducing wages
MPS: Effectiveness
more likely to produce the correct quantity of products to meet customer demand, improving customer satisfaction, sales and market share
MPS: +
+ Improve a business’s reputation -> reduced impact on environment
+ Provide employees with a clear schedule of operations that includes the timeline and quality of production targets
MPS: -
- Can be time consuming to map out details of production
- Implementing and maintaining this plan can be expensive
Materials Required Planning
a process that itemises the types and quantities of materials required to meet production targets set out in the MPS
MPR: Efficiency
Having the exact materials required reduces avoidable halts in production which enhances productivity by allowing operations to flow smoothly
MPR: Effectiveness
ensures there are sufficient materials to meet customer demand -> helps meet objective of increasing customer satisfaction and sales
MPR: +
+ By determining exact materials required -> decreasing waste generated in production -> improve reputation
+ Accurate ordering of quantities of materials required avoids excess storage therefore reduces associated expenses
MPR: -
- Can be time-consuming to constantly update the materials plan
- Implementing and maintaining the materials plan can incur additional administrative and training costs
Just in Time
an inventory control approach that delivers the correct type and quantity of materials as soon as they are needed for production
JIT: Efficiency
holding minimal stock can free up areas in the workplace that can be utilised to increase production
JIT: Effectiveness
costs saved from reducing storage space can be used in other areas of the business, such as sales and marketing, which can meet objectives of increasing sales
JIT: +
+ No raw material wastage
+ No idle machines
JIT: -
- Reliant on suppliers to deliver on time
- Delivery costs may increase if more frequent deliveries are needed
