...SUBJECT: PRODUCTION AND MATERIAL MANAGEMENT TOPIC: WAREHOUSING AND STORES MANAGEMENT Presenter Sr. No. | NAMES | ROLL NO. | 1 | | | 2 | | | 3 | | | 4 | | | GROUP NO: 07 INTRODUCTION Receiving and storing are important flow control activities in the materials management chain. In industries, materials have to be stock to meet the consumption requirements during the lead time or during extension of lead time due to delays by suppliers or due to unexpected increase in the consumption rate. WARE HOUSING Ware housing is not the simple act of storing materials, but rather a package of services which enables the smooth flow of materials through the production department without causing stoppage of production due to shortage of materials. STORE MANAGEMENT Store keeping is a primarily a service function in which the store keeper acts as a custodian of all items carried in the store. Store management should aim at providing the service as efficiently as possible with minimum possible cost. Store keeping may be defined as a function of receiving, storing and issue of raw materials, bought-out parts and components, spare parts, tools, consumables, supplies and stationery items etc. to the user departments. FUNCTIONS OF STORE MANAGEMENT * To receive raw materials, components, tools, equipments and other items and account for them. * To provide adequate and proper storage and preservation of various...
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...NATURE OF RAW MATERIAL MANAGEMENT PROBLEM IN THE NIGERIAN MANUFACTURING SECTOR There are critical problems associated with raw material management in manufacturing organizations in Nigeria today. These are rarely given adequate attentions due to inability of people involved to trace the problems to raw material management. This writer had in an empirical study traced the following problems to inefficiency in raw material/inventory management in Nigeria: 1. The inefficient use of production time, labour and other resources due to delays or incessant short down and interruptions during production have become inherent part of operations in many manufacturing organization in Nigeria. This often led to inability to meet customers’ order and eventual loss of market shares. Low capacity utilization and loss of revenue as consequence of these problems led to closure of many manufacturing firms in the country. 2. The poor liquidity position of many manufacturing concerns in Nigeria is a matter of concern to many shareholders and stakeholders alike. To hold too much stock than necessary will lead to capital lock-up in inventory of raw materials. The materials held idle in stores have values attached to them; and the likelihood is that the organization will never regain the money in them if they become obsolete and useless. 3. In many manufacturing concerns in Nigeria, there is inadequate provision of good quality manpower in stock maintenance and material management. This...
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...CHAPTER ONE INTRODUCTION OF THE STUDY 1.1 Introduction This chapter introduces the material purchasing factors that impact on food production in hotel industry. The chapter also gives some background information about Ambassadeur Hotel; it outlines the statement of the problem, research objectives, research questions, significance, limitations, assumptions and scope 1.2 Background of the study Material purchase for food products is a function concerned with the search, selection, receipt, storage and final use of a commodity in accordance with the catering industry policy of the establishment. Business strategy literature is replete with evidence that indicate the purchasing methods of a firm have an impact on achieving a firm’s goals. The purchasing function can have an impact on the firm’s ability to achieve its chosen strategies because organizational buying is one of the forces that impact competition (Carr et al. 2000; Landeros and Monczka 1989). As hotels strive to achieve global competitiveness, effective purchasing has assumed great importance. According to Carter and Narasimhan (1996), firms need to recognize the strategic role of purchasing as well as the impacts that it exerts on organizations. The relevance of effectively managing the material resources of an organization to its competitive success has been observed by both practitioners and researchers in purchasing and supply management. As a result, purchasing has evolved in many firms from a low-skill, clerical...
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...second part of this report will be discussing the main financial statements, comparing appropriate formats of financial statements for different types of business, and using ratios extracted from the company’s financial statements I will be comparing and interpreting accounts from two consecutive years. 3.1) Using Information provided sales, production, material usage, material purchases and value budgets have been prepared for the month of January 2012 Sale Budget for January 2012: Sales in quantity and value, including total value Sale Budget | Product A | Product B | Total: | Sales Units | 1000 | 2000 | | Sales Values | 100000 | 240000 | 340000 | The sales values can be found by simply multiplying the number of units sold by the selling price per unit (data for sold units and unit selling price have been provided). Production Budget for January 2012: Production quantities Units | Product A | Product B | Total: | Sales | 1000 | 2000 | | Opening Stock | 1000 | 1500 | | Plus Production | 1100 | 2150 | |...
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...Materials Management / 1 CHAPTER I Materials Management Introduction Materials Management is simply the process by which an organization is supplied with the goods and services that it needs to achieve its objectives of buying, storage and movement of materials. Materials Management is related to planning, procuring, storing and providing the appropriate material of right quality, right quantity at right place in right time so as to co-ordinate and schedule the production activity in an integrative way for an industrial undertaking. Most industries buy materials, transport them in to the plant, change the materials in to parts, assemble parts in to finished products, sell and transport the product to the customer. All these activities of purchase of materials, flow of materials, manufacture them in to the product, supply and sell the product at the market requires various types of materials to manage and control their storage, flow and supply at various places. It is only possible by efficient materials management. The materials requirements planning, purchasing, inventory planning, storage, inventory control, materials supply, transportation and materials handling are the activities of materials management. They will be discussed in details in various chapters to follow. About 20-25 years ago, there was no cut-throat competition in the market to sell the various consumer items manufactured by different industrial undertakings and the availability of materials to manufacture...
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...Analysis The goal of "Bangalore Textile Company" is to make profit through production of the suit materials and sell in the market. In order to meet the demand from the market, in case of production shortage, the company may also has to purchase some materials from other production plant and then resell to the market as well. The information of production cost, selling price and purchase price from other plants are provided. The table below shows the profit for production profit and trading from purchasing and reselling profit. Table 1: Profit by production for each material Material | Selling price | Production cost | Production profit* | 1 | $18.50 | $14.10 | $4.40 | 2 | $20.50 | $16.30 | $4.20 | 3 | $22.60 | $17.90 | $4.70 | 4 | $27.90 | $22.40 | $5.50 | 5 | $29.85 | $24.15 | $5.70 | 6 | $32.75 | $26.70 | $6.05 | *Production profit equals selling price less production cost Table 2: Profit by reselling for each material Material | Selling price | Purchasing price | Resell profit* | 1 | $18.50 | $16.55 | $1.95 | 2 | $20.50 | $18.35 | $2.15 | 3 | $22.60 | $20.25 | $2.35 | 4 | $27.90 | $25.30 | $2.60 | 5 | $29.85 | $27.10 | $2.75 | 6 | $32.75 | $29.85 | $2.90 | *Resell profit equals selling price less purchasing price The two profit tables suggest that production profit are higher than resell profit for each material. The amount of materials to be produced by each type of machines and / or to be purchased from other plants are to be determined...
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...will use this example throughout this Exercise: Standard cost of Product A $ Materials (5kgs x $10 per kg) 50 Labour (4hrs x $5 per hr) 20 Variable o/hds (4 hrs x $2 per hr) 8 Fixed o/hds (4 hrs x $6 per hr) 24 102 Budgeted results Production: 1,200 units Sales: 1,000 units Selling price: $150 per unit ACTUAL Results Production: 1,000 units Sales: 900 units Materials: 4,850 kgs, $46,075 Labour: 4,200 hrs, $21,210 Variable o/hds: $9,450 Fixed o/hds: $25,000 Selling price: $140 per unit 1. Variable cost variances Direct material variances The direct material total variance is the difference between what the output actually cost and what it should have cost, in terms of material. From the example above the material total variance is given by: $ 1,000 units should have cost (x $50) 50,000 But did cost 46,075 Direct material total variance 3, 925 (F) It can be divided into two sub-variances The direct material price variance This is the difference between what the actual quantity of material used did cost and what it should have cost. $ 4,850 kgs should have cost (x $10) 48,500 But did cost 46,075 Direct material price variance 2,425 (F) The direct material usage variance This is the difference between how much material should have been used for the number of units actually produced and how much material was used, valued at standard cost 1,000 units should have used...
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...minor design differences. These products require the same basic raw materials and are processed on the same set of machines. DEMAND The orders are received by the marketing department and are cumulated into three categories (A, B and C). The demand forecast for year 2011 is given in Table 1. Table 1: Demand for 2011 in Thousands of Units | Product | Jan | Feb | Mar | Apr | May | Jun | July | Aug | Sept | Oct | Nov | Dec | A | 7 | 8 | 7 | 5 | 3 | 5 | 9 | 10 | 12 | 15 | 10 | 8 | B | 4 | 5 | 4 | 3 | 2 | 3 | 5 | 6 | 8 | 9 | 6 | 4 | C | 3 | 3 | 3 | 2 | 1 | 1 | 4 | 4 | 5 | 6 | 4 | 3 | Product A has the highest demand among the three products while B has the second highest demand. The product demand rises around the second half of the year and even surpasses the total maximum production capacity of the company which is 19,000 for 2 shifts. The amount of raw material required for each product is the same. Therefore, it is assumed that one unit of raw material is required for each one unit of finished product. The cost of raw material is $ 6.00 per unit. In addition to the basic raw material, the cost of other supplies is $ 1.00 per unit of finished product. The ordering cost is $ 1,500 per order and the inventory carrying cost is $ 0.15 per unit per month. There are 15,000 units of raw material in stock at the start of the year and there are no outstanding orders.The lead time for receiving the material is one month. This means that an order placed in any month will be...
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...Systems Design: Process Costing Similarities Between Job-Order and Process Costing • Both systems assign material, labor and overhead costs to products and they provide a mechanism for computing unit product cost. • Both systems use the same manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. • The flow of costs through the manufacturing accounts is basically the same in both systems. Differences Between Job-Order and Process Costing • Process costing is used when a single product is produced on a continuing basis or for a long period of time. Job-order Jobcosting is used when many different jobs are worked on each period. • Process costing systems accumulate costs by department. JobJob-order costing systems accumulated costs by individual jobs. • Process costing systems use department production reports to accumulate costs. Job-order costing systems use job cost Jobsheets to accumulate costs. • Process costing systems compute unit costs by department. JobJob-order costing systems compute unit costs by job. Quick Check Process costing is used for products that are: a. Different and produced continuously. b. Similar and produced continuously. c. Individual units produced to customer specifications. d. Purchased from vendors. Quick Check Process costing is used for products that are: a. Different and produced continuously. b. Similar and produced continuously. c. Individual units produced...
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...warehouse. The narrative of the production cycle and sales and revenue cycle are as follows. When product designers create and save a new product specification, the computer automatically generates and sends a message to the product planning clerk to advise them of the new product. The product planning clerk inputs the new product number into the computer and requests the computer to print a copy of the relevant product specification. After the product planning clerk collects the copy of the product specification they read it carefully to ensure they understand the nature and details of the new product. If any part of the product specification is unclear they liaise with the product designers to ensure that they understand the specification before continuing with the product planning. The product planning clerk keys in a request for details of current stocks of raw material inventory items. The computer extracts and displays a list of the items, including the inventory item’s number, a description of the material, and the amount of material currently in stock. The product planning clerk compares the list of materials inventory with the details of the raw materials required for the product in the product specifications. If a raw material is required that is not currently held in inventory the product planning clerk sends a copy of the product specification to the inventory management department along with a request for them to investigate supply of the material. The product planning clerk...
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...Riordan Current Business Practices Audit MGT/360 University of Phoenix Riordan Current Business Practices Audit Riordan Manufacturing is a global plastics manufacturer with locations in California, Georgia, Michigan, and China. The vice president of operations decided to develop a sustainability plan. Team A has been assigned the task to conduct a business audit to evaluate the Riordan’s current business practices at each location. The audit provides valuable information to identify the nonsustainable business practices and how each effects the environment. The subject in this paper is how Riordan Manufacturing will identify their nonsustainable practices, federal regulations, mandatory, and voluntary actions necessary to implement a successful sustainability plan. Nonsustainable Business Practices The business practice audits brought to light three nonsustainable practices. The three practices highlighted by the audit include wasted energy from the plants, the use of toxic cleaning solvents, and spilled ink. These three business practices can be very harmful to the environment. Burning fossil fuels for energy creates gases such as sulfur dioxide, nitrogen oxide, and volatile organic compounds. These gases cause air pollution. They can cause several kinds of air pollution, particular matter, smog, and ozone (New Energy Alternative, 2008). Air pollution can travel thousands of miles and can harm areas that burn fossil fuels sparingly. The next nonsustainable...
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...1 PRODUCTION AND OPERATIONS MANAGEMENT Introduction Product. Production. Management. Production and Operations Management an Overview. Definition of Production Operations Management. Objectives of Production Management. Scope of Production Management. Benefits derived from efficient Production Management Department. Functions of Production Management. Types of Production Systems. Characteristics of production systems and Production cycle. INTRODUCTION The Subject of Production Management is studied under different Headings-such as Production Planning and control, Production and Inventory control, production and operations control and many more. What ever may be the title of the subject, the contents of the subject are more or less one and the same. Before we discuss about production management, let us discuss about product, production and management. This will give us a rough idea about production Management and with what a production manager has to deal with. 1.1. PRODUCT Though many authors define the product with Consumer orientation, it is better for us to deal with different angles, because it will be helpful for us to understand the subject of production and Operation Management. (i) For a Consumer: The product is a combination of or optimal mix of potential utilities. This is because every consumer expects some use or uses from the product. Hence he/she always identifies the product in terms of the uses. Say for example-Soap can be identified by complexion, cleanliness...
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...current business practices at its processing plants located in California, Georgia, Michigan, and China. The business sustainability worksheets used to complete the evaluation aided the team in locating common areas of non-sustainable practices relating to land, water, and air pollution. The three non-sustainable practices evaluated further are solid waste, and hazardous waste causing land pollution, hazardous waste causing water pollution, and gaseous waste causing air pollution. These areas are the most harmful to the immediate population, which includes the plant workers and the communities. Solid Waste and Hazardous Waste Causing Land Pollution One of the non-sustainable practices is adding to land pollution. Currently, off-spec materials are sent to the landfill (Apollo, 2012). In addition to this, scrap plastic managed as waste goes to the landfill (Apollo). The biggest problem is that plastic is not biodegradable. When plastic and off-spec products are sent to the landfill, breakdown occurs but at minimal rates and these take longer to biodegrade over time. To remain compliant with government regulations, Riordan Manufacturing is required to identify hazardous waste generated each month if it exceeds 2,200 pounds (Apollo, 2012). If Riordan Manufacturing’s plants generate products in excess of 2,200 pounds per month, a set procedure needs to be followed to ensure proper disposal (Apollo). Regulations are set to minimum standards, and Riordan Manufacturing should...
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...Case Study: Anonymous Company Eo Martin is a production manager for Anonymous Company, and he is very concerned about the way the company currently control its production. The method used is a manual in which job order tickets are written and production progress is followed through the shop by production expenditers. A number of scheduling and load charts are used to enable the production control people to record and visually observe order progress. This method worked fine during the early years of the firm. When there were very few employees and the production manager could keep information about the few in-process jobs in her head. Mr. Martin is one of the original employee of Anonymous and can remember their original “shop” in the garage of Martin Masilungan, company founder and current president. Mr. Masilungan had designed several unique digital control devices for the petroleum industry during the late 1970’s, and these systems were the first products of the company. Because of the company continuing success, the firm has had to move twice to a larger production facilities during the past 15 years. The company now has an extensive product line and many customers for digital control devices, which are used in both the continuous process and discrete product industries. In process inventory is extensive and raw material storage has been enlarged twice during the past five years. Mr. Martin feels that the current production control methods are just not adequate for the...
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...tracked through a series of connected manufacturing processes or departments, rather than by individual jobs. 5. In a process cost system, total costs are determined at the end of a month or year. 6. Separate work in process accounts are maintained for each production department or manufacturing process in a process cost system. 7. In a process cost system, materials, labor and overhead are only added in the first production department. 8. The assignment of the three manufacturing cost elements to Work in Process in a process cost system is the same as in a job order cost system. 9. Fewer materials requisitions are generally required in a process cost system than in a job order cost system. 10. In a process cost system, labor costs incurred may be captured on time tickets. 11. A primary driver of overhead costs in continuous manufacturing operations is machine time used. 12. Equivalent units of production are used to determine the cost per unit of completed products. 13. Equivalent units of production measure the work done during a period, expressed in fully completed units. 14. Equivalent units of production is the sum of units completed and...
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