Q1.

What is the function of a store and how can you organize the store
systems and procedure to achieve the objectives of store management?

Ans: The stores function is important for many organisations and

industrial concerns. The primary and secondary functions of store are
discussed in this article. The function of a store is to provide a physical or
digital location where customers can purchase goods or services. Store
management is the systematic method of handling the materials
maintained in the stores of a business. Its primary objectives are to
ensure availability at nominal costs, calculation of restocking period, and
protection against any possible cause of damage to such materials.
Therefore, store management requires keen attention to detail and is
essential to the normal functions of an organization. Store management is
the systematic method of handling the materials maintained in the stores
of a business.\\Functions of a Store # 1. Primary Functions: The main
objective of the store is to provide necessary inputs to the production/op-
erations departments at a minimum cost.\\To ensure this the following
activities are to be performed:\\(i) To make available a balanced flow of
raw materials, components, tools, equipment and other stores required
for operation.\\(ii) To provide maintenance materials, spare parts and
general stores as required.\\(iii) To receive and issue materials after
physical inspection and proper identification.\\(iv) To store and preserve
materials.\\(v) To ensure safety and security of materials.\\(vi) To
arrange for collection, acceptance of scrap and other discarded materials
for disposal.\\Functions of a Store # 2. Secondary Functions:\\The
secondary activities related to the stores functions are:\\1. Collection,
inspection and acceptance\\2. Stores accounting.\\3. Stock control\\4.
Feedback information to materials control section\\5. Help in
standardisation and variety reduction\\6. Service information such as:\\
(a) Demand for materials and parts giving specification, quantities and
deliveries required\\(b) Notification when stocks are running low\\(c)
Details of deliveries rejected on inspection\\(d) Certification of invoices
for quantity and quality\\(e) Particulars of anticipated changes in
consumption\\(f) Procurement of items urgently required in case of
breakdowns\\(g) Listing of obsolete, surplus and scrap materials for
disposal.\\Organize the store systems:\\a)Assess Demand for
Goods:Evaluate which items in your inventory are most often sold. These
items should be easily accessible. By looking at your inventory from the
standpoint of sales volume, you then can segment your warehouse from
front to back organizing items based on volume and frequency. Keeping
popular items closest to the delivery area shortens the time and energy
needed for staff to get the goods and for customers to leave with them.\\
b)Map and Label Everything:Think about a big box store and how it is
mapped out: There is a section for kitchen, garden, sporting goods,
children and so on. Each section is usually designated with a large hanging
sign from the top shelf. Each aisle has a number and sections might be
subdivided. For example, the children's section might be further divided
into nursing, strollers, car seats and safety items.\\c)Inventory
Management Programs: Inventory management programs such as Cin7
and Inventory Control use bar code readers to scan items. When
someone buys a product, the software records the price and adjusts the
inventory total, which makes it much easier to conduct regular
warehouse inventory counts for quality-control purposes. These
programs generate reports so you can order inventory from vendors
more efficiently. Inventory management systems not only perform these
efficiency tasks, they also allow warehouse staff to quickly determine
whether a product is in stock.\\d)Designated Receiving Areas :As
deliveries of new inventory come in, you need a designated receiving
area where items are sorted and moved to the corresponding warehouse
area. The designated receiving area is often in the back of the warehouse
or near a receiving door if there isn't one in the back. Estimate the
average size of deliveries to determine the needed space.\\e)Upkeep
and Cleaning System:In any warehouse, upkeep is essential to
maintaining order. Over the course of conducting business, items are
removed from shelves. Set a system in place, whether it is daily, weekly
or monthly, to restock shelves with items that are out of place and
perform quality-control checks. Equipment and tools should have a
storage spot and be returned after use.Aisles should be clean and clear of
clutter. All this reduces the chaos caused when items show up in
inventory reports but not on the shelves. Train warehouse workers to
regularly perform upkeep and cleaning.\\Organize stored procedure:\\A
stored procedure is a set of Structured Query Language (SQL) statements
with an assigned name, which are stored in a relational database
management system (RDBMS) as a group, so it can be reused and shared
by multiple programs.Stored procedures can access or modify data in a
database, but it is not tied to a specific database or object, which offers a
number of advantages. \\a)A stored procedure provides an
important layer of security between the user interface and the database.
It supports security through data access controls because end users may
enter or change data, but do not write procedures. A stored procedure
preserves data integrity because information is entered in a consistent
manner. It improves productivity because statements in a stored
procedure only must be written once.\\b)Stored procedures offer
advantages over embedding queries in a graphical user interface (GUI).
Since stored procedures are modular, it is easier to troubleshoot when a
problem arises in an application. Stored procedures are also tunable,
which eliminates the need to modify the GUI source code to improve its
performance. It's easier to code stored procedures than to build a query
through a GUI.\\c)Use of stored procedures can reduce network traffic
between clients and servers, because the commands are executed as a
single batch of code. This means only the call to execute the procedure is
sent over a network, instead of every single line of code being sent
individually.\\d)Stored procedures in SQL Server can accept input
parameters and return multiple values of output parameters; in SQL
Server, stored procedures program statements to perform operations in
the database and return a status value to a calling procedure or batch.\\
e)User-defined procedures are created in a user-defined database or in
all system databases, except for when a read-only (resource database) is
used. They are developed in Transact-SQL (T-SQL) or a reference to
Microsoft. Temporary procedures are stored in tempdb, and there are
two types of temporary procedures: local and global. Local procedures
are only visible to the current user connection, while global procedures
are visible to any user after they are created. System procedures arrive
with SQL Server and are physically stored in an internal, hidden-resource
database. They appear in the SYS schema of each system, as well as in a
user-defined database.

Q2. Describe the significance of vendor selection in purchase system?

Ans: Vendor selection is one strategy needed for enterprise risk

management (ERM). Poor vendor selection has negative consequences
for your business. If a vendor doesn't provide on-time delivery or makes
poor quality products, the production schedule will slip for
manufacturers.\\ A vendor selection is an in-depth look at your suppliers
and vendors. It helps you understand how your chosen vendors operate,
how they can benefit your business, and what their potential roadblocks
are. It’s an important step in the procurement process because it helps
you ensure you’re making the right vendor choices for your company.\\
Vendor selection is an evaluation and authorization process that
organizations can use to ascertain if potential vendors and suppliers can
meet up their organizational standards and commitments once under the
agreement. Vendor evaluations constitute the following major key
points:\\Record business requirements and vendor requirements,Initial
examination of all vendor applications or proposals,Allocate importance
value for each requirement,Allocate a performance Value for each
requirement,Compute a total performance score,\\Vendors are usually
assessed in the areas of pricing, quality, delivery, risk, and service. The
overall process aims at empowering an organization to take suitable
measures for controlling cost, reducing potential risks related to vendors,
ensuring excellent service deliverability, and deriving value from vendors
in the long run.
After going through the above points one can say that the vendor
evaluation process is one of the most critical activities or processes in the
organizations. The major of having a significance vendor selection
process in an organization are:\\Competitive pricing: Receiving requests
for quotations (RFQ) from various vendors helps the organization in
getting competitive pricing which results in reducing the overall cost of
the product or service.\\Improves product quality: Organisations obtain
the right to choose the best quality of product or services from the list of
vendors.\\Improves delivery time: Vendors are selected based on
various key points and one of the important points is to deliver the
material or service as per the timelines. Hence, it can be said that having
a vendor evaluation process helps in saving delivery time of receiving
material or service.\\Safeguard from fraud vendors: While evaluating
vendor profiles companies thoroughly checks the background history of
the vendor. Their financials, product quality, and deliverables are checked
before selecting the final vendor. It helps the company in dealing with
fraud or sham vendors.\\Quality of Product or Service:Price doesn’t
matter if the product or service is poor quality.For instance, if you are
hiring a company to remodel your office space, ask for a list of other
projects they completed and take a field trip to see if the finished job
meets your expectations.When hiring for service, ask about employee
training.level of service your customers are accustomed to.\\Check
References:In many ways, hiring a vendor is like hiring an employee.Most
people would not employ a worker without checking references, and you
should not make that mistake when selecting a vendor.Require each
vendor to submit a list of at least three references. If a vendor hesitates,
that should raise a red flag.\\Customer Service:Companies with a
reputation for exemplary customer service will more than likely take good
care of you.As mentioned above, references are invaluable.Request
vendor referrals from people whose opinion you trust.Then ask those
customers about their experience with the customer service particularly –
service after the sale.Don’t forget to take advantage of the digital age in
which we live.People who have poor customer experiences may vent
their frustrations online. An Internet search can uncover this kind of
feedback.

Q3.Determinants of purchase price?

Ans:The determinants of purchase price are the factors that influence

how much a consumer is willing to pay for a product or service. These
factors can be divided into two main categories: economic factors and
personal factors.\\Economic factors include the following:\\The price of
similar products or services: Consumers will typically compare the price
of a product to the prices of similar products before making a purchase. If
the price of a product is too high, consumers may be less likely to buy
it.\\The consumer's budget:Consumers have a limited amount of money
to spend, so they will typically only buy products that fit within their
budget. If a product is too expensive, consumers may not be able to
afford it.\\The consumer's income: Consumers with higher incomes are
typically more willing to pay for expensive products. However, even
consumers with high incomes may be hesitant to spend a lot of money on
a product if they do not believe that it is worth the price.\\The economic
climate:During economic recessions, consumers are typically more price-
sensitive. This means that they are less likely to buy expensive products
and more likely to buy cheaper products.\\The consumer's needs and
wants:Consumers are more likely to pay a higher price for a product if
they believe that it meets their needs or wants. For example, a consumer
who is willing to pay a premium for a luxury car may believe that the car
will provide them with a higher level of comfort and status.\\The
consumer's perceived value of the product: Consumers will typically pay
more for a product if they believe that it is worth the price. This means
that the product must meet their needs and wants, and it must be of high
quality.\\The consumer's brand loyalty: Consumers who are loyal to a
particular brand may be willing to pay a higher price for that brand's
products. This is because they believe that the brand's products are of
high quality and that they will provide them with good value for their
money.
\\The price of similar products or services: This is one of the most
important factors that consumers consider when making a purchase. If
the price of a product is significantly higher than the prices of similar
products, consumers are less likely to buy it. This is because they believe
that they can get a better deal on a similar product from a different
brand.\\The consumer's budget: Consumers have a limited amount of
money to spend, so they will typically only buy products that fit within
their budget. If a product is too expensive, consumers may not be able to
afford it, even if they believe that it is worth the price.

Q4. What are the attributes required of an efficient purchasing?

Ans: Efficient purchasing is the ability to acquire goods and services at the
lowest possible cost while still meeting the needs of the organization. The
attributes required of an efficient purchasing process include:\\Good
communication skills: Purchasing professionals need to be able to
communicate effectively with suppliers, internal stakeholders, and other
members of the organization. This includes being able to clearly articulate
their needs, negotiate effectively, and resolve any problems that may
arise.\\Strong analytical skills: Purchasing professionals need to be able
to analyze market data, identify trends, and make informed decisions
about where to spend the organization's money. They also need to be
able to understand the financial implications of their decisions.\\
Negotiation skills: Purchasing professionals need to be able to negotiate
effectively with suppliers to get the best possible prices. This includes
being able to understand the supplier's position, build rapport, and make
offers that are fair to both parties.\\Problem-solving skills: Purchasing
professionals need to be able to identify and solve problems that may
arise during the purchasing process. This includes being able to think
critically, identify root causes, and develop solutions that are feasible and
cost-effective.\\Organizational skills: Purchasing professionals need to be
able to organize and manage their work effectively. This includes being
able to set priorities, track progress, and meet deadlines.
\\Attention to detail: Purchasing professionals need to be able to pay
attention to detail to ensure that all aspects of the purchasing process are
completed correctly. This includes checking prices, verifying quantities,
and reviewing contracts.\\In addition to these attributes, efficient
purchasing professionals also need to be knowledgeable about the
products and services they are purchasing, the market, and the supplier
landscape. They also need to be able to work independently and as part
of a team, and be able to adapt to change.

Q5. Why materials management losses are not readily visible?

Ans: There are a few reasons why materials management losses are not
readily visible.\\They can be difficult to track. Materials losses can occur
at any point in the materials management process, from ordering to
receiving to storage to usage. This can make it difficult to track and
identify where the losses are occurring.They can be hidden in other costs.
Materials losses can sometimes be hidden in other costs, such as
increased production costs or decreased sales. This can make it difficult to
identify the true cost of materials losses.They can be unintentional. In
some cases, materials losses may be unintentional. For example,
materials may be lost or damaged during shipping or handling. This can
make it difficult to track and prevent materials losses.As a result of these
factors, materials management losses can be difficult to identify and
track. This can make it difficult to take steps to prevent or reduce these
losses.\\Here are some tips for improving materials management and
reducing losses:\\Implement a materials tracking system: A materials
tracking system can help you track the movement of materials
throughout the materials management process. This can help you identify
where losses are occurring and take steps to prevent them.\\Set up
regular inventory audits: Regular inventory audits can help you identify
any discrepancies between the amount of materials you have on hand
and the amount of materials you should have on hand. This can help you
identify materials losses and take steps to prevent them.
\\Train employees on materials management best practices. Training
employees on materials management best practices can help them
identify and prevent materials losses. This training should cover topics
such as proper handling of materials, storage of materials, and reporting
of materials losses. They can be difficult to track. Materials losses can
occur at any point in the materials management process, from ordering
to receiving to storage to usage. This can make it difficult to track and
identify where the losses are occurring. For example, if a material is lost
during shipping, it may be difficult to determine which supplier was
responsible for the loss.\\They can be hidden in other costs: Materials
losses can sometimes be hidden in other costs, such as increased
production costs or decreased sales. This can make it difficult to identify
the true cost of materials losses. For example, if a material is lost during
production, it may lead to increased production costs as the company has
to use more materials to make the same number of products.\\They can
be unintentional. In some cases, materials losses may be unintentional.
For example, materials may be lost or damaged during shipping or
handling. This can make it difficult to track and prevent materials losses.
For example, if a material is damaged during shipping, it may be difficult
to determine whether the damage was caused by the shipping company
or by the company that packed the material.

Q6. Areas of Material Management?

Ans: Areas of Material Management:\\1. Materials Requirements

Planning: It is one of the most important steps in material management
as the inventory of materials costs around 60% of the total investment.
The amount of material utilized directly affects the profit earned by the
organization. Lesser the amount of material used, the more the profit
gained. Nowadays, few industries are considering a new strategy to gain
maximum profit. It is termed as Just in Time (JIT), which involves
practically no inventory. However, it is not possible to avoid the inventory
of materials required for production.\\2. Purchasing: The profit gained by
any organization depends on the efficient and economical purchasing of
its various materials from the suppliers as around 60% of the total capital
investment is done for the purchasing of the various materials. There is a
simple rule: lesser the cost of purchasing material, more will be the profit
gained.\\3. Inventory Planning and Control: Inventory is the term used
to denote various kinds of goods industry has at a particular time. It
includes finished goods, goods ready for sale, goods used in production,
etc. Nowadays, the company follows a simple strategy: materials are
purchased and brought in the stores just before they enter the
production stage or just before they are sold out. This cuts the cost of
maintenance of inventory. For ideal material management, zero
inventories are considered.\\4. Flow and Supply of Materials: Material
Management is a vital part of Supply Chain Management. During the
distribution of materials to various production centers, their continuous
supply must be maintained. Lack of inventories creates situations of
stock-outs which lead to huge losses to the organization. Poor storage of
materials is also sometimes responsible for the disruption of material
supplies. The material management department must have alternatives
supply systems so that production work continues.\\5. Quality Control of
Materials: The quality of material used in production is of great
importance. It is the quality of a starting material that determines the
quality of finished goods. That’s why it is necessary to examine the quality
of materials before purchasing. Durability, dimensional accuracy,
dependability, high performance, reliability and aesthetic value are some
of the parameters used for determining the quality of the material.

Q7.Describe the system of purchase of equipment’s and store in an

inventory?

Ans: A purchasing system is a process for buying products and services

encompassing purchase from requisition and purchase order through
product receipt and payment. Purchasing systems are a key component
of effective inventory management in that they monitor existing stock
and help companies determine what to buy, how much to buy and when
to buy it. Purchasing systems may be based on economic order quantity
models.\\ Purchasing systems makes the purchasing process more
efficient and help companies reduce supply costs. Computerized
purchasing systems can cut companies' administrative costs, shorten the
length of the purchase cycle and reduce human error, thereby minimizing
shortages. They can also simplify order tracking and make it easier to
manage purchasing budgets by quickly creating expenditure reports.\\
Purchasing systems play an essential role in controlling a company's cash
outflows. They ensure that only necessary purchases are made and that
they are made at reasonable prices. Purchasing systems make use of
outputs from production planning systems. These outputs include input
amounts needed in the production process.\\Store in an inventory:\\
Store management helps companies identify which and how much stock
to order at what time. It tracks inventory from purchase to the sale of
goods. The practice identifies and responds to trends to ensure there’s
always enough stock to fulfill customer orders and proper warning of a
shortage.\\One measurement of good inventory management is
inventory turnover. An accounting measurement, inventory turnover
reflects how often stock is sold in a period. A business does not want
more stock than sales. Poor inventory turnover can lead to deadstock, or
unsold stock.\\Raw Materials: Raw materials are the materials a
company uses to create and finish products. When the product is
completed, the raw materials are typically unrecognizable from their
original form, such as oil used to create shampoo.\\Components:
Components are like raw materials in that they are the materials a
company uses to create and finish products, except that they remain
recognizable when the product is completed, such as a screw.\\Work In
Progress (WIP): WIP inventory refers to items in production and includes
raw materials or components, labor, overhead and even packing
materials.\\Finished Goods: Finished goods are items that are ready to
sell. Maintenance, Repair and Operations (MRO) Goods: MRO is inventory
— often in the form of supplies — that supports making a product or the
maintenance of a business.\\Packing and Packaging Materials: There are
three types of packing materials. Primary packing protects the product
and makes it usable. Secondary packing is the packaging of the finished
good and can include labels or SKU information. Tertiary packing is bulk
packaging for transport. Safety Stock and Anticipation Stock: Safety stock
is the extra inventory a company buys and stores to cover unexpected
events. Safety stock has carrying costs, but it supports customer
satisfaction. Similarly, anticipation stock comprises of raw materials or
finished items that a business purchases based on sales and production
trends. If a raw material’s price is rising or peak sales time is approaching,
a business may purchase safety stock.\\Decoupling Inventory:
Decoupling inventory is the term used for extra items or WIP kept at each
production line station to prevent work stoppages. Whereas all
companies may have safety stock, decoupling inventory is useful if parts
of the line work at different speeds and only applies to companies that
manufacture goods.\\Cycle Inventory: Companies order cycle inventory
in lots to get the right amount of stock for the lowest storage cost.\\
Transit Inventory: Also known as pipeline inventory, transit inventory is
stock that’s moving between the manufacturer, warehouses and
distribution centers. Transit inventory may take weeks to move between
facilities.\\Theoretical Inventory: Also called book inventory, theoretical
inventory is the least amount of stock a company needs to complete a
process without waiting. Theoretical inventory is used mostly in
production and the food industry. It’s measured using the actual versus
theoretical formula.\\Excess Inventory: Also known as obsolete
inventory, excess inventory is unsold or unused goods or raw materials
that a company doesn’t expect to use or sell but must still pay to store.

Q8. What is the difference materials management and physical

distribution management?

Ans: Material Management and Physical Distribution Management are

two closely related functions within supply chain management. However,
there are some key differences between the two. Material Management
is concerned with the acquisition, storage, movement, and management
of materials. This includes activities such as:\\Planning: forecasting
demand, developing sourcing strategies, and managing inventory levels.\\
Procurement: sourcing materials from suppliers, negotiating contracts,
and managing the supply chain.\\Warehousing: receiving, storing, and
picking materials.\\Transportation: moving materials from one location to
another. Physical Distribution Management is concerned with the
transportation of products from the place of production to the place of
consumption in an efficient and cost-effective manner. This includes
activities such as:\\Order processing: receiving and processing customer
orders.\\Shipping: packing and shipping products to customers.\\
Logistics: managing the transportation of products, including choosing the
right mode of transportation, scheduling deliveries, and tracking
shipments.\\In summary, Material Management is concerned with the
upstream side of the supply chain, while Physical Distribution
Management is concerned with the downstream side. Material
Management is responsible for ensuring that the right materials are
available at the right time, while Physical Distribution Management is
responsible for getting those materials to the customer in a timely and
cost-effective manner.\\Here is a table that summarizes the key
differences between Material Management and Physical Distribution
Management:

Factor Material Management Physical Distribution

Management
Focus Acquisition, storage, Transportation of
and movement of products from
materials production to
consumption
Activities Planning ,procurement Order
, warehousing, and processing ,shipping,
transportation and logistic
Timeframe Upstream side of the Downstream side of
supply chain the supply chain
Q9. Write different types of wastavity?
Ans: Types Of Wastavity:\\In general, the wastes may be classified into
the following categories:\\Solid wastes – These are the unwanted
substances that are discarded by human society. These include urban
wastes, industrial wastes, agricultural wastes, biomedical wastes and
radioactive wastes.\\Liquid wastes – Wastes generated from washing,
flushing or manufacturing processes of industries are called liquid
wastes.\\Gaseous wastes – These are the wastes that are released in the
form of gases from automobiles, factories or burning of fossil fuels like
petroleum. They get mixed in the other gases atmosphere and
occasionally cause events such as smog and acid rain.\\Sources Of
Wastes- Generation of waste is a part and parcel of day-to-day human
life. Wastes can be generated from various sources. This includes trash or
garbage from households, schools, offices, marketplaces, restaurants and
other public places. Everyday items like food debris, used plastic bags,
soda cans and plastic water bottles, broken furniture, broken home
appliances, clothing, etc. make up the wastes generated from such
sources.\\Medical or Clinical sources of wastes: Wastes produced from
health care facilities, such as hospitals, clinics, surgical theatres,
veterinary hospitals, and labs are referred to as medical/clinical waste.
This includes surgical items, pharmaceuticals, blood, body parts, wound
dressing materials, needles and syringes.\\Agricultural sources of
wastes: Waste generated by agricultural activities, including horticulture,
livestock breeding, market gardens and seedling nurseries, are called
agricultural wastes. Wastes generated from this source include empty
pesticide containers, old silage wrap, out of date medicines and wormers,
used tires, surplus milk, cocoa pods and corn husks.\\Industrial Sources
of Wastes: These are the wastes released from manufacturing and
processing industries like chemical plants, cement factories, power
plants, textile industries, food processing industries, petroleum
industries. These industries produce different types of waste products.\\
Wastes from Construction or Demolition: Concrete debris, wood, huge
package boxes and plastics from the building materials comprise
construction waste, which is yielded as a result of the construction of
roads and building. Demolition of old buildings and structures also
generate wastes and these are called demolition waste.\\Commercial
Sources:As a result of the advancement of modem cities, industries and
automobiles, wastes are generated daily on a large scale from
commercial enterprises. These may include food items, disposable
medical items, textiles and much more.\\Mining Sources:Mining
activities also generate wastes that have the potential to disturb the
physical, chemical and biological features of the land and atmosphere.
The wastes include the overburden material, mine tailings (the waste left
after extracting the ore from the rock), harmful gases released by blasting
etc.\\Electronic sources of waste:The DVD and music players, TV,
Telephones, computers, vacuum cleaners and all the other electrical stuff
at your home, which are of no more use, are electronic wastes. These are
also called e-waste, e-scrap, or waste electrical and electronic equipment
(WEEE). Some e-waste (like TV) contains lead, mercury and cadmium,
which are harmful to humans and the environment.

Q10. What is Inventory? What are the types and objectives of inventory
management? What are the factors affecting inventory management?

Ans: Inventory is the accounting of items, component parts and raw

materials that a company either uses in production or sells. As a business
leader, you practice inventory management in order to ensure that you
have enough stock on hand and to identify when there’s a
shortage.\\“inventory” refers to the act of counting or listing items. As an
accounting term, inventory is a current asset and refers to all stock in the
various production stages. By keeping stock, both retailers and
manufacturers can continue to sell or build items. Inventory is a major
asset on the balance sheet for most companies, however, too much
inventory can become a practical liability.\\There are four different top-
level inventory types: raw materials, work-in-progress (WIP),
merchandise and supplies, and finished goods. These four main
categories help businesses classify and track items that are in stock or
that they might need in the future. However, the main categories can be
broken down even further to help companies manage their inventory
more accurately and efficiently.\\1.Raw Materials: Raw materials are the
materials a company uses to create and finish products. When the
product is completed, the raw materials are typically unrecognizable from
their original form, such as oil used to create shampoo. \\
2.Components: Components are like raw materials in that they are the
materials a company uses to create and finish products, except that they
remain recognizable when the product is completed, such as a
screw.Work In Progress (WIP): WIP inventory refers to items in
production and includes raw materials or components, labor, overhead
and even packing materials.\\3.Finished Goods: Finished goods are items
that are ready to sell. Maintenance, Repair and Operations (MRO) Goods:
MRO is inventory — often in the form of supplies — that supports making
a product or the maintenance of a business.\\4.Packing and Packaging
Materials: There are three types of packing materials. Primary packing
protects the product and makes it usable. Secondary packing is the
packaging of the finished good and can include labels or SKU information.
Tertiary packing is bulk packaging for transport.\\5.Safety Stock and
Anticipation Stock: Safety stock is the extra inventory a company buys
and stores to cover unexpected events. Safety stock has carrying costs,
but it supports customer satisfaction. Similarly, anticipation stock
comprises of raw materials or finished items that a business purchases
based on sales and production trends. If a raw material’s price is rising or
peak sales time is approaching, a business may purchase safety stock.\\
6.Decoupling Inventory: Decoupling inventory is the term used for extra
items or WIP kept at each production line station to prevent work
stoppages. Whereas all companies may have safety stock, decoupling
inventory is useful if parts of the line work at different speeds and only
applies to companies that manufacture goods.\\7.Service Inventory:
Service inventory is a management accounting concept that refers to how
much service a business can provide in a given period. A hotel with 10
rooms, for example, has a service inventory of 70 one-night stays in each
week.\\8.Transit Inventory: Also known as pipeline inventory, transit
inventory is stock that’s moving between the manufacturer, warehouses
and distribution centers. Transit inventory may take weeks to move
between facilities.\\9.Theoretical Inventory: Also called book inventory,
theoretical inventory is the least amount of stock a company needs to
complete a process without waiting. Theoretical inventory is used mostly
in production and the food industry. It’s measured using the actual versus
theoretical formula.\\10.Excess Inventory: Also known as obsolete
inventory, excess inventory is unsold or unused goods or raw materials
that a company doesn’t expect to use or sell but must still pay to store.\\
the objectives of the Inventory Management :The investment put in
inventory is very high, especially for those businesses that deal in
manufacturing, wholesale, and retail trade.The amount of investment
might be sometimes more than the amount spent on other assets of the
company. \\The objectives of inventory management are operational and
financial. In operational, materials and stock should be available in
sufficient amount whereas, in functional, the minimum working capital
should be locked in.\\The objectives of inventory management are as
follows:\\To ensure a continuous supply of materials and stock so that
production should not suffer at the time of customers demand.\\To avoid
both overstocking and under-stocking of inventory.\\To maintain the
availability of materials whenever and wherever required in enough
quantity.\\To maintain minimum working capital as required for
operational and sales activities.\\To optimize various costs indulged with
inventories like purchase cost, carrying a cost, storage cost, etc.\\To keep
material cost under control as they contribute to reducing the cost of
production. \\To eliminate duplication in ordering stocks.\\To
minimize loss through deterioration, pilferage, wastages, and damages.\\
To ensure everlasting inventory control so that materials shown in stock
ledgers should be physically lying in the warehouse.\\To ensure the
quality of goods at reasonable prices.\\To facilitate furnishing of data for
short and long-term planning with a controlled inventory.\\To supply the
required material continuously.\\To maintain a systematic record of
inventory.\\To make stability in price.
\\The Factors Affecting Inventory Management: The factors that are
affecting the effectiveness of inventory are discussed below:\\Factors
Affecting Inventory Management\\1. Financial Factor: It is obvious that
the most important factor is money. For effective inventory management
getting financial investment right is significant, as the progression of the
cycle includes a lot of monetary danger. When you plan the expenditure
of each stock management task, for example, item ordering, tax expenses
related to the stocks, and so on. Deliberately you will have the option to
manage your inventory management process and minimize significant
financial issues.\\2. Market Demand: Understanding market demand is
very important for effective inventory management. As it all depends on
the demand and supply. As it is important to deliver products on time in
order to keep our customer satisfied. Demand is something, a business
creates products as per the customer requirement sometimes the
quantity of high sometimes low. For instance, you need a charger for
using a mobile phone, without a charger you will not be able to charge
your phone. Eventually mobile will be of no use without a charger.
Therefore, it is important that you have enough chargers for charging
several phones. There shall not be a shortage of charge (inventory) so
that businesses of yours do not suffer.\\3. Inventory Theft: Inventory
theft is one of the most common issues across the world. It is also one of
the reasons that influence inventory. According to the Tech jury, “28% of
retail inventory losses in the US are due to employee theft. “For instance,
you think inventory is available in the stock but when you check your
warehouse you don't find inventory as per the expectation. It affects
business in a negative way.\\4. Lead Time: IN this competitive world,
everything needs to be delivered quickly and that is why supply chains are
becoming more complex every day. For those industries who bring their
inventory from another country or another region via plane or ship, lead
time is very crucial. When inventory is coming from this far obviously it
takes time to reach so this type of scenario impacts inventory. Therefore,
strategy shall be created keeping in mind all these factors so that
inventory management is not affected.
\\5. Forecast Quality & Quantity: IN order to forecast the quality and
quantity accuracy of the record is very important. In small and medium-
sized organizations the forecasting inventory is simple. However, in large
organizations, the process is not simple especially when lots of
inventories come in and goes out. Furthermore, quality impacts the
business operation & inaccuracy can lead to miscalculation. As a result,
inventory management will not be as per the expectations.
\\6. Product Types: When you are thinking about inventory effectiveness
you need to ensure that inventory is used before they are expired or
broken. Inventory can be any type. For instance, in the retail sector fresh
vegetable or food has only a few days' life after that their effectiveness
decreases. Therefore, the inventory shall be managed and utilized in a
way so that they are consumed before they expire.
\\7. Vendors & Manufacturers: Banding together with the right vendor is
significant, as vendors are the most persuasive variable that can impact
inventory management. Monitoring and managing the supply chain can
be hard for organizations, especially in the event of you can't depend on
vendors to comply with time constraints and convey quality stocks.
\\In the finance industry, diversification is done so that risk is minimized if
you invest all your money in single-source results can be hazardous.
Similarly, in inventory management, you should not rely on a single
vendor. If anything happens to the vendor's business your business will
suffer as well. Furthermore, there are other benefits of choosing more
suppliers such as you can bargain for the price and ask for a better deal.
Q11. What is the significance of MRP?
Ans: Material requirements planning (MRP) is a manufacturing planning
system that helps ensure that the right inventory is available for the
production process exactly when it is needed and at the lowest possible
cost. MRP is a critical tool for operations managers, as it can help to
improve efficiency, flexibility, and profitability.\\Here are some of the
significance of MRP in operations management:\\Improved inventory
management: MRP can help to reduce inventory levels by ensuring that
only the necessary materials are ordered and that they are ordered at the
right time. This can save businesses money on storage costs and reduce
the risk of stock outs.\\Increased efficiency: MRP can help to improve
efficiency by ensuring that production runs are scheduled in a way that
minimizes waste and maximizes output. This can lead to shorter lead
times and higher customer satisfaction.\\Enhanced flexibility: MRP can
help businesses to be more flexible in responding to changes in demand.
By having a clear understanding of their inventory needs, businesses can
quickly adjust their production schedules to meet changing demand.\\
Improved decision-making: MRP can provide operations managers with
the information they need to make better decisions about production.
For example, MRP can help managers to determine the optimal level of
inventory, the best way to schedule production runs, and the most cost-
effective way to source materials.

Q12.What is Vendor ratings? Various techniques of vendor rating?

Ans: Vendor rating is a process of evaluating and assessing the
performance of suppliers or vendors. It is a systematic way of collecting
and analysing data on a variety of vendor performance factors, such as
delivery times, product quality, responsiveness to customer needs, and
compliance with contractual obligations.\\Vendor ratings can be used
to:\\Identify areas of weakness in a vendor's performance and take
corrective steps.\\Ensure a consistent level of vendor performance
through regular reviews.\\Establish the appropriate level of
communication with vendors.\\Understand a vendor in all critical aspects
and determine whether or not they are the right fit for your business.
Various techniques of vendor ratings: \\Scorecard-based rating: This
method involves assigning a score to each vendor on a set of
predetermined criteria. The scores are then totalled to determine the
overall rating for each vendor\\Weighted rating: This method is similar to
scorecard-based rating, but it assigns different weights to each criteria.
This allows the organization to prioritize certain criteria over others.\\
360-degree rating: This method involves collecting feedback from
multiple stakeholders, such as customers, employees, and suppliers. The
feedback is then used to create a comprehensive rating for each
vendor.\\Benchmarking: This method involves comparing a vendor's
performance to the performance of other vendors in the same industry.
This can help to identify areas where a vendor can improve their
performance.\\Vendor self-assessment: This method involves asking
vendors to assess their own performance. This can be helpful for getting a
vendor's perspective on their own performance.\\ Vendor rating can be a
valuable tool for improving vendor performance and reducing risk. By
following the tips above, you can ensure that your vendor rating system is
successful.

Q13.What is waste management? Discuss its objective and scope?

Ans: Waste management is the collection, transportation, treatment, and
disposal of waste materials. It is a complex process that involves a variety
of stakeholders, including government agencies, businesses, and
individuals. The goal of waste management is to protect human health
and the environment, while also conserving natural resources. Waste
management is an important issue for both human health and the
environment. Waste management is a complex issue, but it is one that we
can all play a role in addressing.\\ The objectives of waste management
are to:\\1]Protect human health and the environment: Waste can
contain harmful substances that can pollute the air, water, and soil. By
properly managing waste, we can prevent the spread of disease and
protect our natural resources.\\2]Conserve natural resources: Waste is
often made up of valuable materials that can be recycled or reused. By
reducing, reusing, and recycling, we can reduce our reliance on virgin
materials and help to protect our forests, oceans, and other natural
resources.\\3]Minimize the environmental impacts of waste: Waste
disposal can have a significant impact on the environment. By using
sustainable methods of waste management, we can reduce our impact on
the planet.\\4]Create jobs: The waste management industry employs
millions of people around the world. By creating a more sustainable
waste management system, we can create new jobs and boost the
economy.\\The scope of waste management can vary depending on the
specific situation. However, it typically includes the following
activities:\\Waste collection: This involves collecting waste from homes,
businesses, and other sources.\\Waste transportation: This involves
transporting waste to a treatment or disposal facility.\\Waste treatment:
This involves processing waste to reduce its volume or to make it safe for
disposal.\\Waste disposal: This involves disposing of waste in a safe and
environmentally responsible manner.\\Geographic scope: This refers to
the area that is covered by the waste management system. For example,
a city may have a waste management system that covers all of the city
limits, while a country may have a waste management system that covers
the entire country.\\Waste type: This refers to the types of waste that
are managed by the system. For example, a waste management system
may only manage municipal solid waste (MSW), while another system
may also manage hazardous waste.\\Waste management method: This
refers to the methods that are used to manage waste. For example, a
waste management system may use incineration, landfilling, or recycling
to manage waste.
Q14. What is centralized and decentralized material purchasing? Explain
its advantages and disadvantages?

Ans: Centralized and decentralized material purchasing are two different

approaches to managing the procurement of materials for an
organization.\\Centralized Material Purchasing is a system where all
purchasing decisions are made by a central procurement team. This team
is responsible for sourcing materials, negotiating contracts, and managing
supplier relationships. Centralized purchasing can help to achieve
economies of scale, improve bargaining power, and ensure that all
purchases are made in accordance with corporate policy. However, it can
also lead to delays in the purchasing process and a lack of flexibility. \\
Decentralized material purchasing is a system where each department or
business unit is responsible for its own purchasing. This gives
departments more autonomy and control over their spending, but it can
also lead to duplication of effort, inconsistent pricing, and a lack of
visibility into overall spending.\\The best approach to material purchasing
will depend on the specific needs of the organization. Large organizations
with complex procurement requirements may benefit from centralized
purchasing, while smaller organizations with simpler needs may be able
to get by with decentralized purchasing. Sure.\\Advantages of
decentralized material purchasing:\\More autonomy and control:
Decentralized purchasing gives departments more autonomy and control
over their spending. This can lead to increased efficiency and productivity,
as departments are able to make purchasing decisions that are tailored to
their specific needs.\\Flexibility: Decentralized purchasing can be more
flexible than centralized purchasing. This is because departments are able
to make purchasing decisions more quickly and easily, without having to
go through a central procurement team. This can be especially beneficial
in situations where there is a need for urgent or emergency purchases.\\
Speed: Decentralized purchasing can be faster than centralized
purchasing. This is because departments are able to make purchasing
decisions without having to go through a central procurement team. This
can be especially beneficial in situations where there is a need to get
products or materials quickly.\\Disadvantages of decentralized material
purchasing:\\1]Duplication of effort: When different departments are
responsible for their own purchasing, there is a risk that they will end up
purchasing the same products or materials from different suppliers. This
can lead to duplication of effort, as well as increased costs.\\Inconsistent
pricing: When different departments are responsible for their own
purchasing, they may end up paying different prices for the same
products or materials. This can lead to customer dissatisfaction and
increased costs.\\Lack of visibility into overall spending: When
purchasing is decentralized, it can be difficult to get visibility into overall
spending. This can make it difficult to track costs and identify areas where
savings can be made.\\Lack of standardization: When purchasing is
decentralized, there is a risk that different departments will use different
procurement processes and procedures. This can lead to inconsistencies
in the way that materials are purchased, which can make it difficult to
manage the supply chain. \\Increased risk of fraud: When
purchasing is decentralized, there is an increased risk of fraud. This is
because each department may have its own purchasing staff, and it can
be difficult to monitor their activities. Improved cost savings: By
consolidating purchases, centralized purchasing can help organizations
negotiate better prices with suppliers. This is because suppliers are more
likely to offer discounts to large buyers who can commit to regular
orders.\\Advantages of centralized material purchasing:\\Increased
efficiency: Centralized purchasing can help to streamline the
procurement process. This is because all purchases are made through a
single department, which can help to reduce duplication of effort and
improve communication between departments. \\
Enhanced control: Centralized purchasing can help organizations to
improve control over their spending. This is because all purchases are
made through a single department, which makes it easier to track
spending and ensure that it is aligned with the organization's overall
goals.
\\Improved supplier relationships: Centralized purchasing can help
organizations to build stronger relationships with suppliers. This is
because the centralized department can develop a deep understanding of
the organization's needs and requirements, which can help to ensure that
suppliers are able to meet those needs.
\\ Improved cost savings: By consolidating purchases, centralized
purchasing can help organizations negotiate better prices with suppliers.
This is because suppliers are more likely to offer discounts to large buyers
who can commit to regular orders.\\Disadvantages to centralized
material purchasing, such as:\\Increased bureaucracy: Centralized
purchasing can lead to increased bureaucracy, as all purchases must go
through a single department. This can slow down the procurement
process and make it more difficult for departments to get the materials
they need when they need them.\\Loss of local control: Centralized
purchasing can lead to a loss of local control, as departments may no
longer be able to make their own purchasing decisions. This can be
frustrating for departments that have specific needs or requirements.\\
Increased risk: Centralized purchasing can increase the risk of a single
point of failure. If the centralized department is unable to function, it can
disrupt the entire procurement process.

Q15. What is material organization? Discuss the organization structure

for material function in single plant operation?
Ans: The term "material organization" can refer to a number of different
things. In general, it refers to the way in which materials are organized or
structured. This can be in a physical sense, such as the way in which
materials are stored in a warehouse or factory. It can also be in a more
abstract sense, such as the way in which materials are organized in a
computer system or database.\\In the context of procurement, material
organization can refer to the way in which materials are organized for the
purpose of purchasing. This includes things like the way in which
materials are classified, the way in which they are stored in the
procurement system, and the way in which they are linked to suppliers.
\\ In the context of logistics, organization material refers to the way in
which materials are organized for the purpose of transportation and
warehousing. This includes things like the way in which materials are
packaged, the way in which they are labelled, and the way in which they
are stored in warehouses.\\In the context of manufacturing, organization
material refers to the way in which materials are organized for the
purpose of production. This includes things like the way in which
materials are stored in the factory, the way in which they are moved
around the factory, and the way in which they are used in the production
process. The organization structure for material function in single plant
operation:\\1] Material Manager: The material manager is responsible
for the overall management of the material function.
a]Planning and forecasting material requirements: The material
manager is responsible for forecasting the organization's future material
needs. This information is then used to develop purchasing plans and
ensure that the organization has the necessary materials on hand to meet
its production and operational needs.\\b]Procurement of materials: The
material manager is responsible for procuring the materials that the
organization needs. This includes sourcing suppliers, negotiating
contracts, and ensuring that the materials are delivered on time and in
the correct quantity.\\2] Inventory management: The material manager
is responsible for managing the organization's inventory levels.
\\a] Tracking inventory levels: The material manager is responsible for
tracking the organization's inventory levels to ensure that they are
sufficient to meet production and operational needs.
\\b] Reducing inventory levels: The material manager is responsible for
reducing inventory levels to minimize costs and improve efficiency.
\\c] Controlling inventory costs: The material manager is responsible for
controlling inventory costs by negotiating better prices with suppliers and
ensuring that the organization is not overstocked.
\\3]Warehouse management: The material manager is responsible for
managing the organization's warehouse.
\\a] Organizing the warehouse: The material manager is responsible for
organizing the warehouse to ensure that materials are stored in a safe
and efficient manner.\\b] Managing inventory in the warehouse: The
material manager is responsible for managing inventory in the warehouse
to ensure that it is not damaged or lost. \\
c]Shipping and receiving materials: The material manager is responsible
for shipping and receiving materials to and from the warehouse.\\
4]Purchasing Manager: The purchasing manager is responsible for the
day-to-day procurement of materials. \\a]Identifying and
qualifying suppliers: The purchasing manager is responsible for
identifying and qualifying suppliers. This includes tasks such as:\\
b]Researching potential suppliers: The purchasing manager is
responsible for researching potential suppliers to ensure that they are
reliable and offer competitive prices.\\c]Qualifying suppliers: The
purchasing manager is responsible for qualifying suppliers by evaluating
their financial stability, quality control standards, and delivery
performance.\\5]Negotiating contracts: The purchasing manager is
responsible for negotiating contracts with suppliers. \\a]Determining the
terms of the contract: The purchasing manager is responsible for
determining the terms of the contract, such as price, quantity, delivery
terms, and payment terms. \\b]Negotiating with suppliers: The
purchasing manager is responsible for negotiating with suppliers to
obtain the best possible terms. \\c]Monitoring supplier performance:
The purchasing manager is responsible for monitoring supplier
performance to ensure that they are meeting the organization's
expectations. This includes tasks such as the purchasing manager is
responsible for tracking delivery performance to ensure that suppliers are
delivering materials on time and in the correct quantity.\\d]Monitoring
quality control standards: The purchasing manager is responsible for
monitoring quality control standards to ensure that suppliers are meeting
the organization's quality requirements.