Materials Management

Question 1

What are the 4 fundamental questions a materials manager should be able to answer?

Answer 1

1. Item question: For which items must new orders be planned?
2. Quantity question: What quantity must be stated in the order for each item?
3. Delivery time question: When must the order for each item be delivered to stock, directly to production or to the customer?
4. Start time question: When must the order for each item be transferred to the supplier, or when must it be initiated in internal production?

Question 2

“Independent demand”

Answer 2

Has no direct connection with demand for other items.

Ex: Items stocked for delivery to customers, mainly finished standard product.

Question 3

“Dependent demand”

Answer 3

The demand may be traced from the demand for another item.

Ex: Input materials in the production of other items.

Question 4

What to do if supply is LESS than required demand?

Answer 4

The flow of materials must be increased by planning new manufacturing/purchasing orders.

Question 5

What to do if supply is LARGER than demand?

Answer 5

Inbound deliveries of already planned & released orders must be delayed or demand influenced as much as possible, through ex sales campaigns.

Question 6

What will imbalances between supplies & demand lead to?

Answer 6

If supplies are too large: Large stocks

If demand is too large: Shortage situations & poor delivery capacity