Strategies related to materials

Question 1

What is forecasting

Answer 1

forecasting involves predicting what materials will be required and in what quantities.

Question 2

forecaster needs to consider

Answer 2

• supply delivery times
• prices change through global exchange rate
• market conditions change
• special customer demand times easter/Christmas

Question 3

Advantages of forecasting

Answer 3

• can anticipate seasonal changes and adjust orders to save on costs and wastage
• can help to prevent over ordering taking up storage space

Question 4

Disadvantages of forecasting

Answer 4

• the ‘‘running backwards looking over your shoulder’’ principle, unexpected events can still catch you out
• requires a lot of time to anticipate track and analyse all potential impacts on supply chain.

Question 5

What is master production schedule

Answer 5

A master production schedule is a manual detailing all the tasks and required specifications in the processes in the production of that good or service.

Question 6

Advantages of master production schedule

Answer 6

• helps determine very accurate ordering quantities and timings, avoids wastage, time and costs
• very clear to all staff of processes and their sequence
• very good for standardised production EG. cars
• easy for new staff to learn routine
• reduced general wastage

Question 7

disadvantages of master production schedule

Answer 7

• initially time consuming and expensive to track, record and write up ‘‘manual’’
• hard to account for every situation
• not very flexible

Question 8

What is materials requirement plan

Answer 8

Materials requirement planning is the detailed measurement of stock on hand, in production and the quantity of stock needing ordering, in order to determine what needs to be ordered and when.

Question 9

Advantages of materials requirement plan

Answer 9

• reduction in wastage
• reduction in storage space taken up
• reduction in idle machines

Question 10

Disadvantages of materials requirement plan

Answer 10

-initially expensive to set up a dedicated system which can accurately track materials through the site.

Question 11

what is just in time

Answer 11

aims to synchronise ordering so automatic computers alerts are sent just when the resources are running low to give sufficient time for delivery so that the new resources arrive just in time.

Question 12

advantages of just in time

Answer 12

• no raw materials wastage
• the bare minimum of cash ‘‘trapped’’ in raw materials
• no storage space required
• no idle machines

Question 13

disadvantages of just in time

Answer 13

-hugely reliant on suppliers to deliver on time, all of the time, failure to do this very quickly shuts down the whole production line.