Solved Assignment July Dec 2016

MS-56 (Sample Copy)

Course Code

MS - 56

Course Title
Assignment Code
Assignment Coverage

Materials Management
MS-56/ SEM - II/2016
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1. What is the need of implementing materials management quality improvement process? How does TQM
support in creating customer value in materials management?
Material management is an important ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------process materials management can be considered as an preliminary
to transformation process.
It involves planning and programming for the procurement of material and capital goods of desired quality and specification at
reasonable price and at the required time.
It is also concerned with market exploration for the ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------when the correct finished product in proper condition and
quantity passes to the consumer.
In a continuing quest for competitive advantage, companies are calling upon materials managers to find innovative ways to reduce
cost, enhance service, and increase customers satisfaction. As a result many companies have taken significant steps toward
identifying ------------------------------------------------------------------------- improvement processes. Some of these processes are
really consistent with broader corporate wide quality initiatives. ---------------------------------------------------------------------------------------------- the leadership role in implementation of the formal quality process.
Because of the increasing ----------------------------------------------- in how the following topics manifest themselves in logistics.

Creating ------------------------------- value

---------------------------- quality process
Materials ------------------------------------ process
Improvement --------------------------- analysis
Implementation --------------------------------.

For quality initiatives to be accepted by the -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. Quality programs lay the foundation for this customer
value ensuring that customer needs are understood and satisfied.
General Electric Company (G.E.C.) of U.S.A. who are pioneers in the field of Materials Management listed the functions of
materials management under following heads:
(i) Planning -------------------------------------- purchase.
(ii) Stores --------------------------------------- control.
(iii) Receiving --------------------------------------- material.
(iv) Transportation ----------------------------- the material.
(v) Value engineering ---------------------------- analysis.
(vi) Disposal -------------------------- materials.
Unless materials managers have the proper -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, It is also the final destination in the quality journey
(described) later as the final phase in the evolution of the quality process. Thus, a discussion of the meaning of customer values
must precede a discussion of quality.

TQM is the way of managing for the future, and is far -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------organisation doing the right things right, first time

The core of TQM is the customer-supplier -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------systems in the organisation.

The building blocks of TQM: processes, people----------------------------------- performance measurement
Everything we do is a Process, which is the transformation of a set of inputs, which can include action, methods and operations,
into the desired outputs, which satisfy the customers -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------well if an organisation is to achieve its mission and
objectives. The section on Processes discusses processes and how to improve them, and Implementation covers how to prioritise
and select the right process for improvement.

The only point at which true responsibility for performance and quality can lie is with the People who actually do the job or carry
out the process, each of which has one or several -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and a strategy that is implemented thoughtfully and
effectively. The section on People expands on these issues, covering roles within teams, team selection and development and
models for successful teamwork.
An appropriate documented Quality Management System will help an organisation not only achieve the objectives set out in its
policy and strategy, but also, and equally importantly, -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------journey has been set, it needs Performance
Measures to monitor and control the journey, and to ensure the desired level of performance is being achieved and sustained. They

can, and should be, established at all levels in the organisation, ideally being cascaded down and most effectively undertaken as
team activities and this is discussed in the section on Performance.

Creating Customer Value

The 1980s introduced significant -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. The quest to create and improve customer value through logistics has
required the quest of quality within logistics.
Logistics as Value Creating Function
The attributes of ------------------------------------------------------------------------------ value in the three general ways:
1) Effectiveness: Effectiveness refers to performance meeting customer requirements in Key Result Areas (KRAs). For example,
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- KRAs in the area of Materials Management:

------------------------------------- guarantee
In ----------------------------------availability
Fulfillment ----------------------------- (turnaround)
Convenience ------------------------Innovation --------------------------- standing (image)

2) Efficiency: Efficiency refers to am -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------leveraging expense into customer value are implicit in this concept.
Activity base cost management systems reinforce efficiency.
3) Differentiation: Differentiation refers to the ability to Crete value uniqueness and distinctiveness of service. For example, the
limited -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------owned retail stores.
Evolving Strategic Role of Logistics
Traditionally, the role of logistics in creating customer -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------an optimal cost service mix.
Strategic logistics distinguishes itself from the traditional perspective through its ability to coordinate as well as integrate many
interdependent activities, simultaneously across major -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to achieve competitive advantage.
The scope and role of Materials management have evolved to the extent that many companies now believe that a strategic
materials management orientation is required to -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------in logistics has evolved to mean much more than simply
having the right product at the right place at the right time in the right condition at the right cost.
Identifying Materials Needs
Understanding the specific need of customers is necessary to delivering quality and value added service with logistics. Essential
qualities for creating value are the willingness, desire, -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------consultants or services to provide objective

information on regular basis may be justified.
Management focus in logistics is expanding beyond the existing company structure to involve suppliers. Historically, many
companies treated customers with respect and dignity -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------for customers in advance, and then meet those
commitments. These new performance capabilities arise form close and positive supplier relationships: anything less in
counterproductive to adding value.
Areas of Critical Importance
Adding value requires a focus not on ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. There are three related areas of focus for value creation:
1) Goals, --------------------------------------------------------- Customer Satisfaction: This involves findings out exactly how
customers perceive the organization as a whole and not just a single product line.
2) Responsibilities: Determine --------------------------------------------------------------------------- sustaining customer value. In many
instances, this responsibility spans traditional functional boundaries and may even require reengineering of some processes.
3) Benefits: Marketing basics must be ------------------------------------------------------------------- onto benefits that yield value.
The key to successful management of the -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------taken into account if Materials Management is going to
contribute to achieving the best comparative net value for that customer.

2. Ethical conduct in purchasing depends, to a large extent, on the local culture to which the purchasing
agents and suppliers belong. Comment!
Purchasing and Materials Managers occupy a special position of trust and responsibility. --------------------------------------------------------------------------------------------------------------------------------------------------------- of Ethics is required and practiced.
Ethics demand that we, as employees of the -------------------------------------------------------------------------------------------------------------------------------------- the Health Care System with complete fidelity to the institutions and respect the rights of others.
The Corporate Purchasing subscribes to the following standards:

Strive to conduct all ----------------------------------------------------------------------------- to the system and our profession.

Ethical --------------------------------------------------------------------------------------------------------- consistently.

Conduct ourselves in ------------------------------------------------------------------------------------------ and peers.

Refuse all ---------------------------------------------------------------------------------------------- in our personal benefit.

Exercise ------------------------------------------------------------------------------------- each dollar of expenditure.

Treat with -------------------------------------------------------------------------------------------------- in confidence.

Strive for standardization to reduce cost and further the development and methods of products that emphasize high
quality, safety and effectiveness of patient care.

Corporate purchasing staff ---------------------------------------------------------------------------- sign a Conflict Of Interest statement.

The ethical guidelines implement the -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and social responsibility and the commitments UiO has undertaken
through its membership of the organisations.
Every organisation requires an ethical policy or code of conduct. Ethical supply chain management is becoming a mainstream
business issue as questions about business practice arise (for example ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------pressure on companies to take

responsibility for the welfare of workers in their supply chains around the world.
There are complex problems to be resolved when addressing ethical and social responsibility issues and many of these issues are
extremely sensitive. Recommended best practice ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- potential risk to the reputation of the organisation and,
in the public sector, the organisation's requirement to comply with the EC procurement rules (where the permitted primary criteria
are solely economic).
Buyers have a responsibility for the supply --------------------------------------------------------------------------- to their customers. I
believe this should include ethical as well as commercial and technical guidance and support. The issues include the following:
Transparency, confidentiality and fairness
All suppliers should be treated fairly and even------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the procurement process as can be provided, for example,
on the weaker aspects of their tender.
Use of power
Buyers should discourage the arbitrary or unfair use of purchasing power or influence. Power is a key element in supply
relationships. The exertion of undue influence -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and 82, which address anticompetitive practices and abuse
of dominant position.
Corruption
Buyers must not tolerate corruption in any form. Buyers -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------public officials in international business
transactions.
Declaring an interest
All personal interests should be declared. Buyers should encourage colleagues to declare any material personal interest which may
effect, or be seen to effect, their impartiality, or judgement, in respect of their duties. Examples include ------------------------------------------------------------------------------------------------------------------------------------------------------- by a key supplier.
Business gifts and hospitality
Theres no such thing as a free lunch. The offer and receipt of business ------------------------------------------------------------------------------------------------------------------------------------------------------------ have a clear policy on accepting business gifts and buyers
should encourage colleagues to comply with any such policy.
Payments from suppliers
Suppliers should not have to pay to be included on an -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to contribute towards the costs of joint projects or
initiatives where there are clear and tangible business benefits to the supplier.
Payment terms
Late payments undermine an -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------that their employer's business processes enable payments to be made
promptly.
Barter and reciprocal trading

Where appropriate, barter is acceptable business practice, but reciprocal trading may not be. Barter is trade by exchange of goods
or services for other goods or services. -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------there is no coercion, both parties are in agreement and there is
mutual benefit and transparency.
Supplier relationships and competition
Relationships with suppliers, regardless of duration, -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------internal business controls should be respected in the
quest for the best value for money solution.
Encouraging small businesses
Buyers should, wherever possible, be aware of -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------simply because they are small or new to the market.
Capability and experience are examples of relevant supplier selection criteria.
Social responsibility
Some of the worker welfare issues which a socially -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Management distils aspects of current developments
in this area and the main recommendations are summarised as follows.
Forced labour
Suppliers should not use forced, bonded or -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and free to leave the supplier after reasonable notice is served.
Employment relationship
Employees should have legal contracts. Suppliers should -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------representative or another appropriate third party.
Suppliers should not do anything to avoid providing employees with their legal or contractual rights.
Freedom of association
Right to collective bargaining. Workers rights -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of association and collective bargaining, suppliers should
positively facilitate alternative means of representation.
Wages and working hours
Living wages are paid. Low wages raise ethical-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------wage, and in some countries the minimum is not enough to
support workers and their families.
Treatment of employees
No harsh or inhumane treatment is allowed. Under -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------third party.

Law
Suppliers should always work within the laws of their country.
Discrimination
No discrimination is practised. Suppliers -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, marital status, sexual orientation, disability, union membership
or political affiliation.
We seek to develop long-term business relationships -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, subcontractors and other third parties. For
example, this principle also means that gifts or favours cannot be offered or accepted at any time.
The subject of business ethics is not one-sided. Purchasing managers and buyers are faced from time to time with unethical sales
practices. There is sharp practice in selling, collusive bidding, restrictive conditions in specifications, artificial stimulation of
demand and prejudice among shop operatives, sabotage -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of supply. In dealing with some of the practices,
such as collusive bidding, more direct and aggressive action is called for as a corrective measure.
The code of conduct as mentioned is necessarily of a general and practical nature. Ethical conduct in purchasing depends, to a
large extent, on the local culture to which the purchasing agents and suppliers belong. It is certainly true in purchasing that
courtesy and fair dealing beget confidence and cooperation on the part of the supplier, -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------they are rarely
successful over any extended period of time. A growing company that expects to be in business a year or ten years hence will do
well to insist upon and to support high ethical standards in its procurement policies and practices.

3. Discuss the various types of inventory carried by a manufacturing organization. In what types of inventories
can the EOQ and order level polices be used, and in what types of inventories will the use of MRP be more
effective?
Your business inventory consists of your -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------that you cannot sell.
The Five Types of Inventory:
1.

Raw Materials Raw materials are important for obvious ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------over the next quarter or year. A company
can go bankrupt if it doesnt properly manage its raw-material inventory. For example, a multi-billion dollar business
had to shut down business and halt production for four days because they ran out of pallets on which to store and ship
their supply. Pallets are very important for shipping and manufacturing companies and if they are ignored, then the
business suffers.

2.

Work in Progress The second type of -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------planning of future raw-material purchases.

3.

Finished Goods This type of inventory ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------manufacturers. It is hard to manufacture for multiple
distributors when there is no visibility of your finished goods.

4.

Service Inventory Distribution inventory barely -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and be able to leverage parts sales.

5.

TRANSIT INVENTORY- Transit inventories result from the need to transport items or material from one location to
another, and from the fact that there is some -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------coming from various locations into one shipping source in
order to take advantage of economies of scale. Of course, this can greatly increase the transit time for these inventories,
hence an increase in the size of the inventory in transit.

6.

BUFFER INVENTORY- As previously stated, inventory is sometimes used to protect against the uncertainties of
supply and demand, as well as unpredictable -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------occurs because the firm suffers fewer "stock-outs" (when a
customer's order cannot be immediately filled from existing inventory) and has less need to backorder the item, make the
customer wait until the next order cycle, or even worse, cause the customer to leave empty-handed to find another
supplier. Obviously, the better the customer service the greater the likelihood of customer satisfaction.

7.

ANTICIPATION INVENTORY- Oftentimes----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- (i.e., at Halloween, Christmas, or the back-to-school

season). For manufacturers, anticipation inventory allows them to build up inventory when demand is low (also keeping
workers busy during slack times) so that when demand picks up the increased inventory will be slowly depleted and the
firm does not have to react by increasing production time (along with the subsequent increase in hiring, training, and
other associated labor costs). Therefore, the -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------level of output and a stable workforce.

8.

DECOUPLING INVENTORY- Very rarely, if ever, will one see a production facility where every machine in the
process produces at exactly the same rate. In fact-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Even so, this does not seem to interrupt the flow of
work-in-process through the system. The reason for this is the existence of an inventory of parts between machines, a
decoupling inventory that serves as a shock absorber, cushioning the system against production irregularities. As such it
"decouples" or disengages the plant's dependence upon the sequential requirements of the system (i.e., one machine feeds
parts to the next machine).

9.

CYCLE INVENTORY- Those who are familiar ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- inventory holding/carrying costs decrease, but the
cost of ordering/setup increases since more orders/setups are required to meet demand. When the two costs are equal
(holding/carrying costs and ordering/setup costs) the -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------as needed.

10. MRO GOODS INVENTORY- Maintenance, repair, ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------product. Examples of MRO goods include oils,
lubricants, coolants, janitorial supplies, uniforms, gloves, packing material, tools, nuts, bolts, screws, shim stock, and key
stock. Even office supplies such as staples, pens and pencils, copier paper, and toner are considered part of MRO goods
inventory.
11. THEORETICAL INVENTORY- This would obviously -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------goods) and according to the function it
serves within the system (transit inventory, buffer inventory, anticipation inventory, decoupling inventory, cycle
inventory, and MRO goods inventory). As such, the purpose of each seems to be that of maintaining a high level of
customer service or part of an attempt to minimize overall costs.

Economic order quantity (EOQ) is an----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- variables. This is done to minimize variable inventory costs, and the formula
takes into account storage, or holding, costs, ordering costs and shortage costs. The full equation is as follows:

EOQ is meaningful only for the high usage ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- and the risk of stock-out. This consideration is far more important than the above.
In the Reorder Level (ROL) system, the ROL and Q are fixed but the time for replenishment varies inversely with consumption.
The ROL is like the reserve in the fuel tank of a motorcycle. Replenishment quantity is always the same i.e. full tank, but the
time for replenishment will vary.
Material requirements planning (MRP) is a -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------for which the amount of inventory needed depends on the level of production of the
final product. For example, in a plant that manufactured bicycles, dependent demand inventory items might include aluminium,
tires, seats, and bike chains..
Materials requirement planning (MRP) is a computational technique that converts the master schedule for the end products (MPS)
into a detailed schedule for the raw materials and components used in the end products. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------completion date for
the end product as per the MPS.
MRP works backward from a production plan for finished goods to develop requirements for components and raw materials. MRP
begins with a schedule for finished goods that is converted into a schedule of requirements for the subassemblies, the component
parts, and the raw materials needed to produce the final product within the established schedule. MRP is designed to answer three
questions: what is needed? how much is needed? and when is it needed?"
MRP breaks down inventory requirements into planning periods so that production can be completed in a timely manner while
inventory levelsand related carrying costsare kept -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------businesses. In addition, the information that comes
out of an MRP system is only as good as the information that goes into it. Companies must maintain current and accurate bills of
materials, part numbers, and inventory records if they are to realize the potential benefits of MRP.

MRP systems offer a number of potential benefits to manufacturing firms. Some of the main benefits include helping
production managers to minimize inventory levels and the associated carrying costs, track material requirements, determine the
most economical lot sizes for orders, compute quantities ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- managers, who must balance workloads across
departments and make decisions about scheduling work. Plant foremen, responsible for issuing work orders and maintaining
production schedules, also rely heavily on MRP output. Other users include customer service representatives, who need to be able
to provide projected delivery dates, purchasing managers, and inventory managers.
The key to making MRP implementation work is to provide ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- alternate system. One way to improve
employee acceptance of MRP systems is to adjust reward systems to reflect production and inventory management goals.
Let us use -------------------------------------------- such an analysis:
1. Company A is a basic assembly ----------------------------------------------------------------------------------------------------------------------------------------- production runs of a few models; the finished goods inventory is kept in an extensive distribution system.
2. Company B is a general machine shop. ----------------------------------------------------------------------------------------------------------------------------------------------- flows in manufacturing; and there are large in-process inventories.
3. Company C is a fabrication/assembly operation. --------------------------------------------------------------------------------------------------------------------------------------------------------------------- in small quantities to customer order and specification.

4. What do you understand by the term codification? What type of information should be built into a code?
What are the objectives of codification? List the different systems used to codify materials.

Codification of materials can also be termed -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the control over the inventory levels, and also in having a
good control over the loss, deterioration, obsolescence, non-movement, or pilferage of the items in the inventory. Unique
identification of the materials whether ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------other advantages such as variety reduction and standardization etc.
It is amazing to find that in many of our large public -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------reducing the actual availability of the item for
operational needs. An item may be called a nut and bolt by one section of the organization, whereas another may call it a
fastener and because of this there are two separate requisitions made, two separate purchase orders sent out, and two separate
inventory levels of the items built into the system. One section might call an item a pipe whereas another might call it a conduit
in fact both sections using the same item. This increases the inventory level unnecessarily Prevention of duplication is one of the
important benefits of a good materials coding system.
Needless to say, for proper stock taking a good -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------value recovered and the storage space freed. It is also not
uncommon to observe that although a material is available with the stores in reality due to duplication of the identity it is often
quoted as not available and thus, many production programs suffer with consequent loss to the organization as a whole Proper
identification of inventory items helps in -----------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------. It is a simple concept. If followed it might produce results of

proportions equivalent to that of a rigorous application of the inventory control principles with, perhaps much less effort.

Types of information store in CodesRaw materials, Semi processed Materials, -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------be easily adaptable in order to exploit the full advantages of
codification.
Therefore, codification is a process of representing -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------last digit is reserved for minor variations.
Many organizations in the private and public sectors like, Railways and DGSD have their own system of codification. The number
of digits in a code may typically be somewhere between eight to thirteen.
There are several methods of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- taken to develop the code to satisfy a variety of users.

The objectives of a rationalized Material Coding system are:

1) Bringing ------------------------------------------------------ together.
2) To enable ------------------------------------------------------- proper place.
3) To classify ----------------------------------------------- characteristics
4) To give a unique code number to each item to avoid duplication and ambiguity.
5) To reveal excessive --------------------------------------------------- and variety reduction.
6) To establish a -------------------------------------------------------------- of an item.
7) To fix -------------------------------------------------------------------- an item.
8) To specify item as per national and international standards
9) To enable --------------------------------------------------------------- and analysis.
A codification system must aim at satisfying as many of the above mentioned objectives as possible and the codes evolved will
depend upon the nature of industry, items of stores and the management policy.

Some of the systems of codification are:

1) Arbitrary ---------------------------------------------2) -----------------------------------------System
3) Mnemonic ---------------------------------------------- numeric system
4) Decimal ---------------------------------5) -----------------------------------------------6) Kodak ---------------------------------------------Arbitrary Systems
Arbitrary system as the word arbitrary indicates, is based on the serial number under which a material is received and the same is
allotted as a code number.
Using this approach, all inventory -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------item received, then the code number of these bearings will be 5091. This system has the advantage that
there is no fixed limit for codifying any number of items. Moreover, one cannot know the history of the items. This is the reason
why the system is not popular.

Numerical System

A numerical system assigns a six -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-----------------------------------several numbers typically indicate the sub-class, and the last three numbers are usually uncoded. The
following example illustrates the concept:
3

129

017

General Class

Generic Class

Sub-class

503
Specific item number

This ten digit code number is one firms stock number for a by inch
stainless steel square neck ----------------------------------------------------------------- part as per the following general classification :
1) Raw material
2) Manufactured parts
3) Purchased parts
4) MRO supplies
5) Work in process
The next three digits -------------------------------------------------------------------------------------------------------------------- 129. All
items are generically classified by their nature and carry a number from 000 to 999.

The next three digits indicate the ------------------------------------------------------------------------------------------------------------------------------- a square neck. All fasteners are sub-classified into a class bearing number from 000 to 999.
The last three digits indicate the specific part number of the item. In this case,all part numbers under 500 designate plain steel and
numbers over 500 represent various alloys; 503 is stainless steel, by inch.

Mnemonic System

A mnemonic system ------------------------------------------------------------------------------------------------------------------------------- in

its symbols. For example, the carriage bolt described under the numerical system in the following manner :
P Fa BCS 503

P ------------------------------------ purchased part,

--------------------------------------------- fastener,
BCS ----------------------------------------------------------- neck, and
503 represents the specific number of the bolt.
Mnemonic systems, ---------------------------------------------------------------------------------------------------------------------------------------------------------------shorter. As more and different types of items are added to the inventory, however, this advantage diminishes because
the number of good symbols are limited.

Decimal System

Decimal system of codification may said to be the -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, size, specification and complete picture of the item. Modern industrial concerns are
generally adopting 7 to 11 digits for codifying the materials.
In the decimal codification system, each digit indicates some thing or the other.
For example:
1st ------------------------------Section
2nd ---------------------------------------3rd ------------------------------Group
4th ------------------------------------------- of materials
5th digit -Size, ----------------------------------------- or any other details required
Example:

Section

0 -------------------------------1 Machine and hand tools

2 Construction materials etc.

------------

0 Hand tools

(For section-1)

1 Machine tools
2 -----------------------------tools
3 Cutting tools
4 --------------------------------cutting tools etc.

Group

0 Cutters

(For section-1)

1 Files
2 -------------------------3 Scrapper etc.

Suppose a file flat, single -------------------------------------------------------------------------------------------------------------------------------------------- 3rd digits as 131. Further fourth and fifth digit will be classified as :
4th --------------------------------------------------------- file, thus
0 for flat
1 for hand
2 for sqaure
3 for round
4 for tappered etc.

5the ------------------------------------------------------- of file, thus

0 for single cut, rough
1 for single cut, coarse
2 for single cut, smooth
3 for double cut, coarse etc.
The 6th, 7th -------------------------------------------------- the file in mm.
Therefore, file flat,single cut smooth size 25 mm will be codified as
13102025.

Brisch System

The Brisch system consist of seven -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------together. The Brisch system through it consists only of seven digits, is quite comprehensive as the
basis is on logical major groupings.

Kodak System

The Kodak system consists of 10 digits of -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------with hardware suppliers. If this bolt is available as a part of the machine, it will be available
under maintenance.

5. Explain how a performance appraisal system can be used in the context of materials management. What are
the metrics of performance appraisal in materials management?
Basic to any program is the need to systematically review and evaluate the status and performance of the program. In planning and
controlling the materials management --------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of material across the supply chain partners. Different approaches

such as Balance score card, SCOR Framework, etc are fast emerging.
Appraisals of materials management activities should concentrate on the effectiveness of programs and procedures for managing
materials. Specific activities should include, but not be limited to, the following evaluations:
i) Material quantities ------------------------------------------------------------------------------- program objectives.
ii) Programs, --------------------------------------------------------------------------------- materials.
iii) Forecasts related such as --------------------------------------------------------------------------------- program plans and budgets.
iv) Use ---------------------------------------------------------------------------------------------------------- the system.
v) Procedures for ----------------------------------------------------------------------------------------------------- and scrap.
vi) Adequacy of information provided ------------------------------------------------------------------------------ plans.
vii) Adequacy --------------------------------------------------------------------------------------- issued by the contractor.
Appraisal systems are related to institutional productivity requirements. Appraisal systems are expected to reveal underproductive units and to serve as a response system to -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------may be initiated by departments to recognize
productive staff. Concerns with under-productive staff may be addressed through targeted staff development activities or through
other means as appropriate.
The Need for Appraisal of Material Management -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, performance appraisals can help close the gap between the actual performance of the
company and the performance needed to make corporate objectives.
Appraisals Management can be compared to an annual check-up: both provide an opportunity for an honest assessment of how
you are doing. You need to know what you are doing is right so you can continue with those activities.
Modern management has expanded the ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. Acquisition, conversion, flow and distribution of production material from the raw material state
to the finished product state.
The concept also provide for delegation of responsibility and authority with regards to procurement and supply of material. The
concept also recognizes the importance of the principle of accountability by providing a management approach which is
responsible for all decisions.
Through material management, there is -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------at possible bulk. Disco unit and obtaining special vender relation. It means that spending valuable
money is in the heart of people who are trained and competent for this job.
Performance Appraisal in Material Management evaluates -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and in order to reduce overall costs, it require
the close cooperation and co-ordination of material and other user department to ensure that material ordered are made to arrive

only when they are needed, the benefit of this approach is that of cost reduction and maximization of the companys profit. Thus,
the growing need for efficient operation of material management is increased in recent time.
The balanced scorecard is a performance -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and external factors, thus providing a holistic framework for
performance appraisal systems (Figure below).

A performance measurement system using Balanced -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------non-value added work, minimizing quality
problems) and human resource systems and development are leading indicators of company performance.
MATRICES OF PERFORMANCE APPRAISAL SYSTEMDifferent matrices are common in the effective management of materials. Some of these are listed below.
1 Inventory Turnover Ratio
The inventory turnover ratio -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------two firms from different industries. There is huge variation in the inventory
holdings of different industries and organizations. For example in one industry inventory is held for longer time for operation
while in other it is requiring only short duration.
2 Safety Stock
Stock that is held in excess of expected demand due to variable demand rate and/or lead time is known as safety stock. Safety
stock reduces risk of stockout during the lead time (Figure below). As shown, the order is placed when stock depletes to reorder
point (ROP). During the lead-time (LT) if there are demand fluctuations, these are covered by safety stock.

The SCOR Model (Supply Chain Operations -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------indicators are well applicable in Material Management also.

The SCOR model provides a set of -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. This model allows the firm to relate the weaknesses in their material
management function of the supply chain practices.
ExampleAn appraisal of Material management ---------------------------------------------------------------------------------------------------------------------------------------------------------------materials and to understand the abilities of a production for future growth and development having
the following objectives:
i) To maintain ---------------------------------------------------------, wage structure.
ii) To identify the ------------------------------------------------------------------- and raw materials)
iii) It ----------------------------------------------------------------- habits of the employees.
iv) To review ------------------------------------------------------------- other training.

However, it is hoped that the research will serve as a guide to students who would also like to make further research in this field,
and to benefit the school by keeping it in the library for reference purposes, in view of the above the researcher has decided.

Almost every organization in one way -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------many things. The formal performance appraisal has been called a
tool of management, a control process, an activity and a critical element in human resources allocation.
Therefore, it can be said that, performance appraisal means systematic evaluation of the personality and performance of each
employee by his supervisor or some other person -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. It is a continuous process to secure information
necessary for making correct and objective decisions on employees. The comparison of performance with job requirements helps
in finding out the merit of individual employees in a week group.

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