Budgeting is an important tool adopted by the company for planning and controlling purchases and materials usage. Sales forecast is the basis for planning and budgeting after carefully considering various factors such as capacity available and product mix. Since inventory involves significant investment, keeping it at an optimum level is very important for controlling cost. Material requirement planning is carried out in line with the production schedule for the year. Importance of study Home appliances market is very competitive. The company’s products face stiff competition from the products imported from China and Japan. The company is under tremendous pressure to ensure quality of its products and make improvements to maintain its market share. The company focuses on ‘planning and controlling purchases and materials usage’ with a view to bring down the cost of production to make its products more competitive in the market. The main objective of inventory planning is to keep the investment low for reducing the interest cost. The inventory can be classified into three categories. 1. Raw materials 2. Components purchased for assembly 3. Finished products Purchase and production departments along with stores are responsible for planning and controlling of inventory of raw materials and components and the production department is responsible for planning and controlling of material usage. There are varieties of household appliances manufactured and marketed by the company. Since most of the appliances are electrically operated, quality of materials purchased is very important, keeping in view the safety of the customers. Timely supply of raw materials and components avoid disruptions in production schedule usually. Order size is decided based on factors such as price, usage and lead time required for supply of materials. The materials should be purchased without compromising quality of materials at the cheapest cost in line with the purchase policy of the organization. This requires product knowledge and negotiating skills on the part of purchase manager. Planning and control of purchases is closely relating to storing of raw materials and component part before issue to various production or assembly units of the organization. Inventory planning is therefore is an important aspect in planning and control of purchases in the organization. According to Michalski (2008) “The basic financial inventory management aim is holding the inventory to a minimally acceptable level in relation to its costs. Holding inventory means using capital to finance inventory and links with inventory storage, insurance, transport, obsolescence, wasting and spoilage costs.” Planning and control of usage of materials in production department depends upon the regular supply of materials by the stores department, efficiency in production by the workers and keeping generation of scrap at minimum level. At the same time, requirements as per the production schedule and changes thereof for a week need to be informed in advance to the stores for closely monitoring the stock levels of various raw materials and components for making necessary requisition to purchase department for initiating purchase process. Though reorder levels are fixed for various materials, uncertainties in lead time and sudden demand for appliances should be informed to the purchase and
Planning and Controlling Purchases and Materials Usage Table of contents Introduction 2 Importance of study 2 Analysis 5 Conclusion 7 References 9 Planning and Controlling Purchases and Materials Usage Introduction “Eagle Home Products” is a medium sized company engaged in manufacturing of home appliances of various types and sizes for local market and exports…
According to Nice (2002), Capital expenditures imply outlays of cash that are mostly needed to upgrade a business asset. Capital expenditure can sometimes be referred to as capital spending or capital expense.
When undertaking a project such as construction, it is important for individuals involved to keep in mind cost planning as well as cost control. Cost control is a key objective in any given construction project and should, therefore, be recognized that, it is only achieved through the final decision of the manager (Potts, 2007, p.12).
Most often than not, the benefits and ease that comes with commonality for manufacturers make them overlook materials requirements planning. But regardless of the fact that commonality gives the company some key benefits like meeting market pressure and cutting down on the cost of production, materials requirements planning also would come with several long term advantages for the company.
The technique has been recognized as the controlling tool of the business operations within GM. It contributes in the control of manufacturing along with labor costs during the production process. Introduction Lean manufacturing can be well described as a compound approach aiming at reduction of wastes, coordination with supply chain and creation of close collaboration with customers (Brondo & Baba, 2010).
At seventeen he started to study law at the University of Bonn. Because of distractions, particularly his membership in the Trier Tavern Club, his academic performance became poor, and so his father had him transfer to the more serious University of Berlin.
The current focus on sustainable development in concrete technology aims at producing more environmentally friendly cement, which spawns less carbon dioxide and expends less energy. Such environmentally favorable cement is what is referred to as “green
On the other hand we have structure B which is a 800 circular column with a thickness of 50 cm. the total volume for this structure is 400. The analysis period for this structure is similar to that of the above structure. This structure is also
Preponderances of the construction projects are facing uncertainty and risks that can result in escalation in costs and hence, the cost control is the method of combating the cost performance as compared to its cost plan, thereby fine-tuning one or the other functions
Current engineers, however, apply automated machines in undertaking manufacturing works. Old machines are no longer applicable in the manufacturing process; automated machines outdo the role of old machines. Markillie emphasizes on the introduction of 3D
2 pages (500 words)Essay
Hire a pro to write a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Apply my DISCOUNT
Got a tricky question? Receive an answer from students like you!Try us!
Let us find you an essay for FREE
Contact us via Live Chat, call us at +16312120006or send an email to email@example.com