material strategies Flashcards
materials
businesses need to ensure they have enough materials on hand to produce their output.
without enough materials, production may need to stop. having too many materials can cause inefficiencies.
material strategies
- Forecasting
- just in time
- master production schedule
- Material requirement plan
forecasting
where data and trends are used to predict future demand so decisions can be made on materials requirements.
business use to ensure they maintain appropriate levels of materials so production can meet market demand
forecasting example
the Sofitel Hotel can look at its past data over the last 5 years to try and determine future demand in terms of function bookings and accommodation requests.
- It can look at past performance and forecast their peak times: eg Melbourne Cup, AFL Grand Final, New Years Eve, Christmas Break Up Functions
forcasting efficiency and effectiveness
Efficiency:
- ensuring enough materials on hand, leading to a continuos flow (reducinh waiting times
- minimises wastage (reduces amount of stock becominh obsolete)
Effectiveness:
- helps the operations meet customer demands
- enhances ability to respond to changes in the market
forecasting disadvantages
- potential for inaccuracies
- time consuming ti monitor data and trends
Just in time
Where the right amount of materials are delivered just as they are needed in the production process.
just in time efficiency and effectivness
Efficiency:
- reduces storage costs
- minimises wastage
Effectiveness:
- allows business to be more responsive to the market conditions and changing customer needs/wants
- improving product quality
- less money tied up in idle stock
just in time example
McDonalds- employees do not commence cooking food until it has been ordered
Master production schedule
A plan that describes what is to be produced, in what quantities, where and when. MPS allows the business to plan how many materials they require to meet the production needs.
just in time disadvantages
- highly dependent on suppliers
- vulnerable to supply chain disruptions
- increased risk of stockouts
- increased delivery costs
MPS example
Sofitel hotel- estimate fruit and wine and how many staff need to work
MPS disadvantages
- using an MPS can sometimes result in less flexability if there are quick changes to production required
- maintaining and monitoring the MPS can take dedicated staff, increasing costs
MSP efficiency and effectivenes
Efficiency:
- streamlines production processing by providing a clear plan and schedule for production
- can reduce lead times as materials are on hand at the night time
- reduces over production
Effectiveness:
- meeting customer demand by aligning production with market demand
- allows the business to pan their resources, reducing costs nd improving profits
Material requirnment plan
An inventory control system that provides an itemised list of materials needed to produce specific forecasts or orders.
