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UNIT-IV

Materials Management


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INDEXUNIT 4 PPT SLIDES

S.NO. TOPIC LECTURE NO.

1. Materials Management L1

2. Objectives, Need of Inventory Control L2

3. EOQ, ABC Analysis L3

4. Purchase Procedure L4

5. Stores Management and Stores Records L5

6. Marketing : Functions of Marketing L6

7. Matketing Mix, Marketing Strategies L7

8. Based on Product Life Cycle L8


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Definition:-

Material refer to inputs into theproduction process, most of which areembodied in the finished goods beingmanufactured.


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Objectives:-

To support the production departmentswith materials.

To minimize investments.

To avoid accumulation of work in process.

To maintain adequate inventories.

To contribute direct profitability.

To ensure economy of costs by processingEOQ


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Need for Inventory control:-

Inventory:-refers to all the idle physicalstocks, which have economic value.

Inventory control:-is defined as the

scientific method of providing the righttype of material at the right time in theright quantities and at right price tosustain the given production schedules.


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Need for Inventory control:-

Minimizing investments for theorganization (in case of materials)

Maximizing the service levels to the

customers


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Economic Order Quantity (EOQ):-

EOQ is defined as that quantity ofmaterial, which can be ordered at onetime to minimize the cost of ordering and

carrying the stocks.

EOQ=2Ao/c

Where A=Annual Demand

O=Ordering cost per order

C=Carrying cost per unit


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ABC Analysis:-

A ---- Very costly and valuablestrictcontrol day to day

B ---- less costly ---- moderate controlweekly

C ---- least cost ---- low control

- monthly


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Purchase Procedure:-

Purchasing is a specialized job.

Objectives:-

To purchase the right quantity and quality of

materials. To ensure continuous flow of supplies.

To explore and develop other sources of supply.

To obtain the best value for the money spent.

To maintain functional relations. To train staff, make policies and procedures.


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Purchasing process:-

Requisitioning purchases

Exploring the sources of supply

Issuing of tenders and obtainingquotations

Opening of tenders and quotations andpreparation of comparative statements.

Negotiating over the purchase price andterms of supply


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Purchasing process:-

Placing purchase order

Receiving of material along with theinvoice

Checking inward invoice

Inspecting and testing materials

Forwarding the material to stores Checking invoice and passing of bills for

payment


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Stores Management:-

Facilitates the maintenance of accountsfor each item of inventory.

Position of inventory can be updated fromtime to time.


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Stores Records:-

Common used store records:-

1. Material requisition note

2. Purchase order

3. Invoice

4. Goods received note

5. Goods returned note

6. Stores ledger account

7. Bin card


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Marketing:-

Definition:- Marketing is an essential function of amodern organization whether it deals inproducts or services.

According to Philip Kotler:- Marketing as a societalprocess by which individuals and groups obtainwhat they need and want through creating,offering, and freely exchanging products and

services of value with others.


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Functions of marketing:-

The marketing functions comprise: buying,selling, transportation, storage,standardization, grading, financing, risk taking

and market research. Based on different authors classification

marketing functions:-

1. Functions of exchange

Buying and assembling

Selling


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Functions of marketing:-

2.Functions of physical supply

Transportation

Storage and warehousing

3.Facilitating functions

Financing

Risk taking

Standardization and grading

Market information and research


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Marketing Mix:-

Marketing is the mixture of four ps

1. Product2. Promotion

3. Place

4. price


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Marketing strategies based onproduct life cycle:-

A product is a physical good or service orcombination of both.

It is capable of satisfying the buyers

needs.


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Stages in Product Life Cycle:-

Introduction

Early growth

Rapid growth Maturity

Saturation

Decline


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Channels of distribution:-

Channels of distribution refer to the wages andmeans of reaching the customer through theintermediaries such as wholesalers, retailersand other agencies.

Types of Channels of distribution:1. Manufacturer ------ consumer2. Manufacturer ---wholesaler---- consumer3. Manufacturer--- retailer---- consumer4. Manufacturer---wholesaler--- retailer---

consumer

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