MGT 033 Ch 7 Flashcards
“The function responsible for the coordination of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner so as to provide a pre-decided service to the customer at a minimum cost”.
Material management
Inventory generally refers to the materials in stock. It is also called the idle resource of an enterprise. Inventories represent those items, which are either stocked for sale or they are in the process of manufacturing or they are in the form of materials, which are yet to be utilized. The interval between receiving the purchased parts and transforming them into final products varies from industries to industries depending upon the cycle time of manufacture.
Inventory control or management
Based on the sales forecast and production plans, the materials planning and control is done. This involves estimating the individual requirements of parts, preparing materials budget, forecasting the levels of inventories, scheduling the orders and monitoring the performance in relation to production and sales.
Materials planning and control
This involves physical control of materials, preservation of stores, minimization of obsolescence and damage through timely disposal and efficient handling, maintenance of stores records, proper location and stocking.
Stores management or management
This includes selection of sources of supply finalization in terms of purchase, placement of purchase orders, follow-up, maintenance of smooth relations with suppliers, approval of payments to suppliers, evaluating and rating suppliers
Purchasing
This is the process of reducing the variety of products manufactured. This is concerned with the reduction of product range, assemblies, parts, materials and design.
Simplification
What are the Other Related Functions of Material Management?
- Standardization
- Simplification
- Specification
- Value Analysis
- Ergonomics
- Just-in-time
This means producing maximum variety of products from the minimum variety of materials, parts, tools and processes. It is the process of establishing standards or units of measure by which extent, quality, quantity, value, performance etc. may be compared and measured.
Standardization
It refers to a precise statement that formulizes the requirements of the customer. It may relate to a product, process or a service.
Specifications
The human factors or human engineering is concerned with man-machine system. This is “the design of human tasks, man-machine system, and effective accomplishment of the job, including displays for presenting information to human sensors, controls for human operations and complex man-machine systems.”
Ergonomics
This is concerned with the costs added due to inefficient or unnecessary specifications and features. It makes its contribution in the last stage of product cycle, namely, the maturity stage.
Value analysis
What factors are the ff? Price trends, business cycles Govt. import policy etc
Macro Factors
What factors are the ff? Plant capacity utilization, rejection rates, lead times, inventory levels, working capital, delegation of powers and communication.
Micro Factors
It is also called the idle resource of an enterprise.
Inventory
The basis for material planning is?
The forecast demand for the end products
