Materials Management

Question 1

materials in operations

Answer 1

• need to ensure they have enough materials on hand to produce their output
• without materials, production may stop
• too many materials, causes inefficiencies
• operation managers need to ensure:
  1) materials arrive on time
  2) materials arrive at right place
  3) business has the right quantities of materials
  4) materials are the right quality

Question 2

not enough materials mean…

Answer 2

• not having enough materials can make it challenging to meet customer demand
• being out of stock can result in dissatisfied customers and loss of sales
• slow production and increase waiting times - increasing costs

Question 3

too much stock means…

Answer 3

• creates inefficiencies
• become damaged, lost, may perish or become obsolete while being stored
• takes up space and/or costs money
• inventory ties up money that can’t be used in other areas of the business

Question 4

strategies that improve efficiency and effectiveness of operation in materials include…

Answer 4

• forecasting
• master production schedule
• materials requirement planning
• just in time

Question 5

forecasting

Answer 5

past data and trends are used to predict future demand so decisions can be made on materials requirements

Question 6

forecasting efficiency

Answer 6

• ensuring enough materials are on hand, leading to constant flow (reduced waiting times)
• minimise wastage- reduces amount of stock perishing/becoming obsolete/damaged

Question 7

forecasting effectiveness

Answer 7

• helps the operations meet customer demand
• enhances the ability to respond to changes in the market

Question 8

forecasting disadvantages

Answer 8

• potential inaccuracies
• time consuming to monitor data and trends

Question 9

master production schedule

Answer 9

MPS is a plan that describes what is to be produced, in what quantities, where and when.

allows business to plan how many materials required to meet production need

Question 10

MPS efficiency

Answer 10

• streamlines production processes by providing a clear plan and schedule for production (planning resources)
• reduce lead times as materials are on hand at the right time
• reduces overproduction

Question 11

MPS effectiveness

Answer 11

• meeting customer demand by aligning production with market demand
• allows the business to plan their resources, reducing costs and improving profits

Question 12

MPS disadvantages

Answer 12

• using MPS can result in less flexibility if there are quick changes to production required
• maintaining and monitoring the MPS can take to dedicated staff, increasing costs

Question 13

Materials Requirement Plan

Answer 13

is an itemised list of all materials involved in production to meet the orders

MRP consider
- what need to be produced and quantities
- materials already on hand
- lead time

Question 14

MRP efficiency

Answer 14

• ensuring materials are on hand so there’s continuous flow
• minimise wastage

Question 15

MRP effectiveness

Answer 15

• reduces delays, meeting customer demand
• lead to reduced costs

Question 16

MRP disadvantages

Answer 16

• requires accurate data to be effective
• costs involved in implementing MRP can be significant

Question 17

Just in Time

Answer 17

where the right amount of materials arrive just as they are needed for production

deliveries will occur more regularly as fewer materials are on hand at a given time

Question 18

JIT efficiency

Answer 18

• reduces storage costs
• minimise wastage

Question 19

JIT effectiveness

Answer 19

• allows business to be more responsive to market conditions and changing customer needs/wants improving product quality
• less money tied up in idle stock

Question 20

JIT disadvantages

Answer 20

• highly dependent on suppliers
• vulnerable to supply chain disruptions
• increased risk of stockouts
• increased delivery costs (potential for carbon emissions)