materials management

Question 1

what is materials management?

Answer 1

• startegy that manages the use, sotrage and delivery of materials to ensure the right amount of inputs is available when required in the operations system

Question 2

what is forecasting? what does it use?

Answer 2

• it is a materials planning tool that relies on data from the past and present and analysis of trends to attempt to determine future events

it uses qualitative data such as statistics from last year or media reports

Question 3

what are the advantages of forecasting?

Answer 3

• business’ can estimate what type of outputs are likely to be sold and at what times
• less likely to end with excess stock

Question 4

what are disadvantages of forecasting?

Answer 4

• data may not be accurate
• historical data might not take into account recent changes

Question 5

what is master production schedule (MPS)?

Answer 5

• a plan that details what is to be produced and when

this allows the business to determine if they have the capacity to meet production and plan for upgrade, recruitment of extra staff, expansions or liekly interruptions if necessary.

Question 6

what is materials requirement planning (MRP)? what are some considerations?

Answer 6

• involves developing n itemised list of all materials involved in production to meet the specificed orders.

considerations:
- amount of stock already on hand
- exact number of inputs required for production

Question 7

how does MPS and MRP relate to technology?

Answer 7

they are software based but it is possible to conduct MRP manually

Question 8

what are the advantages of MPS and MRP?

Answer 8

• increases effectiveness: ensures sales can be maximised because there is there is enough materials, capital and labour for production. And staff rostering can be determined in advance
• increases efficiency: ensures no excess inventory gets spoiled or damaged and increase costs. And it ensures lower production costs by avoiding periods with no production and periods where extra time is required

Question 9

what are disadvantages of MRP and MPS?

Answer 9

• information used may be inaccurate
• requires expensive software that increase costs

Question 10

what is Just In Time (JIT)?

Answer 10

• a materials management strategy that ensures the right amount of material inputs will arrive only as they are needed in the operation process. this means that deliveries must be reliable and received at the right time.

Question 11

what are the advantages of JIT?

Answer 11

• reduced costs: less storage space needed and less money tied in inventory
• reduced wastage and defects: less spoilage of inventory, fewer defects

Question 12

what are the disadvantages of JIT?

Answer 12

• late supplies may hold up production
• transportation costs may be higher as many small deliveries are made

Question 13

how do businesses operate according to Just in Time?

Answer 13

1. know what inputs are needed by completing a Materials Requirement Plan
2. know when products are being produced by completing a Master Production Schedule
3. complete a sales forecast to know how much to outputs they will likely sell.