2014

1. Name and describe the three primary activities of manufacturing planning

and control.

MPC Primary Activities

a. Production Planning includes:
o Forecasting,
o Master planning MPS
o Material Requirements Planning MRP
o Capacity Planning
b. Implementation and control (Production Activity Control) PAC
c. Inventory management
Provide buffer against the differences in demand rates and production
rates

2. Explain different types of sourcing.

In business, the term word sourcing refers to a number of procurement practices,
aimed at finding, evaluating and engaging suppliers for acquiring goods and services:

Outsourcing, the process of contracting a business function to someone else

Insourcing, a process of contracting a business function to someone else to be
completed in-house
Global sourcing, a procurement strategy aimed at exploiting global efficiencies in
production
Strategic sourcing, a component of supply chain management, for improving and
re-evaluating purchasing activities
Vested outsourcing, a hybrid business model in which a company and service
provider in an outsourcing or business relationship focus on shared values and
goals to create an arrangement that is mutually beneficial to each

3. Explain different factors influencing design for stores building.

F-Flow
A-Accessibility
S-space
T- Throughput
1. Flow- What were looking for here is a logical sequence of operations within the
warehouse where each activities located as close as possible to that which precedes it
and also the function that follows it. We are concerned with the controlled and
uninterrupted movement of materials, people and traffic with, if possible, no cross flow
clashes or areas of high traffic or work density. It is also concerned with the awareness
of where material is located within the system, and the status and location in the storage
and handling equipment and medium. Our aim is to site and position the various
warehouse activities in order to contribute to a smooth flow of operations with a
minimum amount of movement and disruption.
2. Accessibility We are not only talking about whether or not we can get to the
product. But can we get to the required level of pack? Take the example of bottled water
for instance, from major FMC distribution centre well be looking at being able to receive
and issue product by the pallet load possibly even by the truck load. So you only need to
access full pallets and since it is very fast moving with a fairly long shelf life, strict first in
first out by row to individual pallet level need not be followed. At the wholesaler or
distributor level, you might be accessing down to case level and then in the convenience
store stock room individual bottles. It can go further than this. For pharmaceuticals,
accessibility may need to beyond individual item level down to specific lock and batch
number. The requirements of levels of accessibility must be achieved especially in the
pick base and fast moving stock holding areas with a minimum compromise to the next
factor, which is the use of space.
3. Space When considering how to use the available spac,e the maximum should be
allocated to operational storage and stock processing purposes. And the minimum
space given up for associated functions such as offices, working areas, empty pallets
storage, battery charging, etc. Todays wide range of storage media available on the
market allows us to make optimum use of a cubic capacity of the available space, not
just the floor area. As most of these equipment is free standing and requires no
structural support from the building itself, it means that the building can be of the
simplest and cheapest big box design. It also allows us to build inflexibility to the
operation by selecting the storage media to meet the current stock profile and then
change it as the operation evolves to meet future requirements. This can be done
without expensive and disruptive changes to the actual building. But remember, you still
have to consider flow accessibility and now finally:
4. Throughput When we look at throughput, where not only looking at the categories
of product parting through the warehouse but also the nature of the product and its
velocity through the flow. By nature, we mean the handling characteristics, dimensions
and any other factors that will impact on how it is moved through the flow such as
hazard, bulk, fragility, security requirements and compatibility with other products. The
velocity of the product will consider the volumes moving through the warehouse on a
daily basis. Link lanisis analytic. Pick period activities need to be determined as do
minimum activity levels. A high degree of availability of accurate throughput data will
assist greatly in the outcome of the design or layout exercise. The better the data and
the longest spent on collecting and analysing it, the less the risk, however it is still
possible to come up with an acceptable solution when one does not have the luxury of
accurate data going back into history. You have to do the best with what is available.
Financial consideration
Movement of people and equipment

Site details

The characteristics of the particular place (site) will determine the final layout
design. The topography of the site, along with other factors, including drainage and
ground status will decide the designing. You must have a layout that proves to
stand firm on the situated place. For example, if the area is poorly drained, flooded
water can negate the integrity of all the products, which are water sensitive. The
warehouse must be specially designed with a raised floor to protect all the items.
 4. List down certain new developments in store management
5. Explain the different OR techniques used in integrated materials
management.
6. Discuss different techniques used for materials management.
The techniques most commonly used are the following:

a. ABC Analysis: ABC analysis is a business term used to

define an inventory categorization technique often used in
materials management. It is also known as Selective
Inventory Control.
ABC analysis provides a mechanism for identifying
items which will have a significant impact on overall
inventory cost21 whilst also providing a mechanism for
identifying different categories of stock that will require
different management and controls.22 When carrying out an
ABC analysis, inventory items are valued (item cost
multiplied by quantity issued/consumed in period) with the
results then ranked. The results are then grouped typically
into three bands.23 These bands are called ABC codes.
ABC CODES
"A class" inventory will typically contain items that
account for 80% of total value, or 20% of total items.
"B class" inventory will have around 15% of total
value, or 30% of total items.
"C class" inventory will account for the remaining 5%,
or 50% of total items.

b. High, Medium and Low Classification: The High,

medium and Low (HML) classification follows the same
procedure as is adopted in ABC classification. Only
difference is that in HML, the classification unit value is
the criterion and not the annual consumption value. The
items of inventory should be listed in the descending
order of unit value and it is up to the management to fix
limits for three categories.

The HML analysis is useful for keeping control over

consumption at departmental levels, for deciding the
frequency of physical verification, and for controlling
purchases.
Procurement department is more concerned with
prices of materials so this analysis helps them to take
them the decisions such as, who will procure what based
on the hierarchy and price of material.
c. VED Classification: While in ABC, classification
inventories are classified on the basis of their
consumption value and in HML analysis the unit value is
the basis, criticality of inventories is the basis for vital,
essential and desirable categorization.
The VED analysis is done to determine the criticality of
an item and its effect on production and other services. It
is specially used for classification of spare parts.
d. SDE Classification: The SDE analysis is based upon the
availability of items and is very useful in the context of
scarcity of supply. In this analysis, items, generally
imported, and those which are in short supply. It refers
to difficult items which are available indigenously but are
difficult items to procure. Items which have to come from
distant places or for which reliable suppliers are difficult
to come by fall into category. It also refers to items which
are easy to acquire and which are available in the local
markets.
The SDE classification, based on problems faced in
procurement, is vital to the lead time analysis and in
deciding on purchasing strategies.
SDE analysis is done based on purchasing problems
associated with items on day-to-day basis.

e. FSN Classification: FSN stands for fast moving, slow

moving and non-moving. Here, classification is based on
the pattern of issues from stores and is useful in
controlling obsolescence.
To carry out an FSN analysis, the date of receipt or
the last date of issue, whichever is later, is taken to
determine the number of months, which have lapsed
since the last transaction. The items are usually grouped
in periods of 12 months.

f. SOS Analysis: S stands for Seasonal items and OS

stands for off-seasonal items. It may be advantageous to
buy seasonal items at low prices and keep inventory or
buy at high price during off seasons. Based on the
fluctuation in prices and availability, suitable decision
has to be taken regarding how much to purchase and at
what prices.
g. XYZ Analysis: XYZ analysis is calculated by dividing an
item's current stock value by the total stock value of the
stores. The items are first sorted on descending order of
their current stock value. The values are then
accumulated till values reach say 60% of the total stock
value. These items are grouped as 'X'. Similarly, other
items are grouped as 'Y' and 'Z' items based on their
accumulated value reaching another 30% & 10%
respectively. The XYZ analysis gives an immediate view of
which items are expensive to hold. Through this analysis,
firm can reduce its money locked up by keeping as little
as possible of these expensive items.
h. GOLF Analysis: This stands for Government, Open
market, Local or Foreign source of supply. For many
items imports are canalized through government agencies
such as State Trading Corporations, Mineral and Metals
Trading Corporations, Indian Drugs and Pharmaceuticals
etc.
For such items, the buying firms cannot apply any
inventory control techniques and have to accept the
quota allotted by the Government. Open market
categories are those who form bulk of suppliers and
procurement is rather easy. L category includes those
local suppliers from whom items can be purchased offthe
shell on cash purchase basis. F category indicates
foreign suppliers. Since an elaborate import procedure is
involved, it is better to buy imported items in bigger lots
usually covering the annual requirements.
i. Economic Order Quantity: Economic order quantity is
the level of inventory that minimizes the total inventory
holding costs and ordering costs. It is one of the oldest
classical production scheduling models. The framework
used to determine this order quantity is also known as
Wilson EOQ Model or Wilson Formula. The model was
developed by F. W. Harris in 1913. But still R. H. Wilson,
a consultant who applied it extensively, is given credit for
his early in-depth analysis of the model.
Assume that the demand for a product is constant
over the year and that each new order is delivered in full
when the inventory reaches zero. There is a fixed cost
charged for each order placed, regardless of the number
of units ordered. There is also a holding or storage cost
for each unit held in storage (sometimes expressed as a
percentage of the purchase cost of the item).
An organization wants to determine the optimal
number of units of the product to order so that it
minimize the total cost associated with the purchase,
delivery and storage of the product
The required parameters to the solution are the
total demand for the year, the purchase cost for each
item, the fixed cost to place the order and the storage
cost for each item per year. It is worth noteable that the
number of times an order is placed will also affect the
total cost; however, this number can be determined from
the other parameters-

7. List down different components of E-procurement.

These components include Catalog content, Processes, User maintenance,

Establishing buyer/seller relationships, Billing management, Price
establishment, Data transmission, and System maintenance.
Catalogue content

At the heart of every e-procurement process lies an electronic catalog. Similar to a

traditional mail-order catalog, electronic catalogs contain detailed information on
products or services available for sale. Suppliers customize the content to address
the specific needs of targeted buyers. This content is manipulated and imported into
a database that the e-procurement application integrates into web pages

The management of catalog data can be handled using import and

aggregation tools or by outsourcing the task to companies specializing in
content management. Content providers generally offer the following
services:

Convert catalog data into a uniform language and format

Gather and aggregate data from multiple suppliers into one catalog
Publish and maintain the product catalog

Once a catalog is created, various

cataloging strategies are used to provide
access to the content. Strategies include
using a centralized catalog model where
the aggregated data is hosted at a central
location, a distributed model where data
resides at multiple sites, or a content-
 retrieval method where suppliers present
catalog data directly to buyers.

There are three types of catalogues that

address various buyer needs :
Product catalogs: Contain data on
tangible items such as office products,
medical supplies, rolls of steel, etc.
Service catalogs: Offer professional
service intangibles such as office
maintenance
services, temporary personnel services, etc.
Commodity-specific catalogs: Offer specific product families or groups such as
chemicals, paper, or other raw materials

E-procurement Processes
In addition to creating an electronic catalog, existing procurement processes need to
be electrified end-to-end to support the entire e-procurement process. This includes
requisition and order management, real-time tracking and receiving, online order
fulfillment, automatic billing, invoicing and payment, as well as workflow
management, commerce transactions, and reporting and analysis tools.

Note that an effective e-procurement platform must support both the buyers and the
suppliers business processes. It should also offer functionality that can easily be
customized and configured to meet specific e-procurement requirements. In general,
a successful e-procurement solution will be founded on an open, component-based
model that offers easy configurability and scalability.

User Maintenance
Closely related to the two preceding process management components, user
maintenance includes defining the individuals authorized to use the e-procurement
system, how these users will be enrolled, and how to provide them access to the
trading community. This component serves as the foundation for managing the
complex buyer-supplier relationships that will occur within the marketplace.

E-procurement user maintenance must address two primary tasks:

Establish user profiles, access rules, catalog filters, and workflow

Allow for unique pricing and contractual relationships between a buyer and supplier

The following steps are vital to successful user management:

Creating the buyer organization: Identifying and defining the individual buyers, how
they will form buying groups, and how they will access the e-procurement process
Creating the supplier organization: Identifying sellers, maintaining company profiles,
and creating shipping options and other high-level parameters for supplier activities
E-procurement organization: Aggregating the entire marketplace, including buyer
and supplier, to include such things as hours of operation, billing rates, etc.
Additionally, user maintenance requires establishing authorization levels and
associated procedures to precisely govern buyer and supplier capabilities.
Three authorization levels that must be addressed are:

Access to the electronic catalog:Defines who may access catalogs and how to do so
Creating and editing requisitions:Defines who can create requisitions, who can edit
requisitions, and who can edit accounting codes
Managing orders: Defines who has access to POs and who has authorization to
override shipping or billing information
Establishing Buyer/Seller Relationships
This component has two phases: managing supplier relationships and managing
pricing.
Buyers and sellers may be linked based on their previous buying relationship or
based on the buyers unique needs. Buyers may make purchases based on
negotiated contracts or choose the specific commodities they need from customized
catalogs. Price lists too may be customized for a buyer or buying group. For
example, prices may be established by adding filters that dynamically calculate a
price as a markup or discount of the list price. Or groups of buyers may be
categorized into classes with filters applied for each group.

Billing Management
E-procurement revenues are generally based on transaction fees. A billing
management system will calculate usage charges and generate and distribute
statements or invoices to buyer-seller members of the e-procurement network.
Suppliers may also use the billing system to calculate ordering charges or to
distribute operating costs for specific orders. These functions must directly interface
with back office invoicing systems to automatically generate bills
Price Establishment

Effective pricing enables buyers to negotiate the best possible deals and sellers to
liquidate excess inventory. Two major pricing options are used: Dynamic Pricing and
Fixed Pricing.

Dynamic pricing: Allows buyers and sellers in an Internet market to trade goods and services at prices
determined by market forces instead of by a predetermined price list or catalog.
An example of dynamic pricing includes business services such as auctions, reverse auctions, and
exchanges.

Fixed pricing: Based on a predetermined price list or catalog prices negotiated between a buyer and
seller

Data Transmission
Transmitting data over the Internet involves two facets: messaging agents
and security. Data and messaging tools enable the Internet-based
exchange of transactional data between different buyers and

suppliers in the e-procurement marketplace. To do this, transactions are sent via the
Internet as messages and then integrated into a suppliers or buyers back-office
system, enabling financial postings that coincide with the receipt, payment, and
invoicing processes. Data messaging tools are also used to cancel transactions and
log failures when messages cant be delivered within a predefined time period or
following a specified number of attempts. The most important aspect of the
 messaging tool is that it enables real-time communication between buyers and
sellers.

Coincidentally, security is an important aspect of any Internet transaction. Protecting

a buyers confidential financial information and ensuring
that only designated buyers have access to supplier product information is critical to
ensuring confidence in any e-procurement system.

System Management
Maintaining an e-procurement system involves configuring and monitoring
performance usage, average response time, transaction sources, and traffic
patterns. To maximize the benefits and strategic opportunities e-procurement
systems offer, this information should be used to analyze growth patterns, session
times, and ultimately to fine-tune the systems performance to fit specific market
communities or technical environments.

Once an e-procurement system is up and running, its important to monitor traffic and
system security on a day-to-day basis.

Inadequately designed transaction engines can result in poor marketplace

performance, lack of scalability, breakdowns in security, and, ultimately, frustrated
users.

8. Explain the disadvantage of using E-procurement system over traditional

purchasing system.

Disadvantages of E-Procurement
Disadvantages of e-procurement are mostly on the side of the supplier. Ageshin suggests that
buyers reap more benefits than suppliers such as shorter ordering cycles, a wider adoption of
just-in-time practices and increased supplier involvement in product development.
On the other hand, Ageshin says that suppliers face problems such as high training costs, the
necessity of dealing with more than one marketplace, higher risk of data compromise and full
organizational restructuring in some cases. Some suppliers used to dealing with clients face-to-
face may find online transactions uncomfortable, since suppliers dont necessarily know whom
they are dealing with online. Just like online dating, knowing and verifying an organization over
the Internet is more difficult, and deception is easier to carry out online.
Another disadvantage of e-procurement services is rapidly growing multiple standards. Both
buyers and suppliers are uncertain of which e-procurement service provider will survive or
become obsolete. Multiple standards also add to the confusion about which one to use and may
increase costs for the seller as it attempts to fulfill multiple standards.
DISADVANTAGES OF E-PROCUREMENT
===============================

Price
======

The major disadvantage is the financial commitment a company must make

in order to invest in the software necessary to participate in the
e-marketplace. And, of course, the costs can vary depending on the
applications.

Implementation Problems
========================

Just because the software set-up is available, implementation is not

necessarily easy. Getting employees to use the e-procurement service
can be difficult. And surprisingly, equipment suppliers are not always
anxious to join in the process, either!

Loss of direct relationship between the Buyer and the Seller

==============================================================

The lack of personal contact between the two parties can be

off-putting to some companies. E-procurement relationships are reduced
to electronic transactions with no personal interaction. Companies
must choose whether this is the way they want to conduct business
between the different entities that sustain them.

What are the disadvantages of e-procurement?

1. E-procurement systems derive information from internal catalogs that often contain static
products and pricing that is updated infrequently.
2. Vendors on e-procurement systems might have one-price-fits-all, which can be list pricing.
Procurement service providers, on the other hand, can obtain wholesale pricing in their role as
re-sellers and can pass on those discounts to you.
3. Procurement outsourcing companies have direct relationships with vendors and therefore they
may be privy to information on vendor-unadvertised limited-time specials.
4. Experienced procurement service providers can negotiate discounts on volume purchases on a
case by case basis when dealing directly with vendors.
5. E-procurement systems find the lowest pricing based on only those vendors that they list in
their system. Procurement service providers who have experience dealing with certain
commodities are able to locate those suppliers/distributors who are not always visible on these
systems.
6. Real time inventory levels are not always accurate on electronic systems. Procurement service
providers can directly verify if the vendor inventory levels are accurate. If there is a delay due to
non-stock items, they are agile enough to switch the order to another vendor, and they can
directly negotiate matching offers with vendors that do have stock.
7. There are certain to be discrepancies in orders due to mismatched part numbers, product
descriptions, etc., that may not always be caught on e-procurement systems and/or these
discrepancies might cause the order to be bounced off the system. The human element can
analyze the discrepancies directly and quickly resolve the problem.
8. Of course there are some types of orders that e-procurement systems may not be set up to
handle, i.e. custom orders, made to spec orders, replacements for discontinued items, etc., where
skilled procurement specialists are better equipped to assist.

9. What are documents required for starting export of goods from an

organization?

To start export business, the following steps may be followed:

1) Establishing an Organisation

To start the export business, first a sole Proprietary concern/ Partnership firm/Company
has to be set up as per procedure with an attractive name and logo.

2) Opening a Bank Account

A current account with a Bank authorized to deal in Foreign Exchange should be opened.

3) Obtaining Permanent Account Number (PAN)

It is necessary for every exporter and importer to obtain a PAN from the Income Tax
Department. (To apply PAN Card Click Here)

4) Obtaining Importer-Exporter Code (IEC) Number

An IEC is a 10 digit number which is mandatory for undertaking export/ import. Application
for obtaining IEC Number can be submitted to Regional authority of DGFT in form ANF 2A
along with the documents listed therein.

Applicants can also apply for e-IEC on the DGFT website (http://dgft.gov.in/). Only one
IEC can be obtained against a single PAN.

5) Registration cum membership certificate (RCMC)

For availing authorization to import/ export or any other benefit or concession under FTP
2015-20, as also to avail the services/ guidance, exporters are required to obtain RCMC
granted by the concerned Export Promotion Councils/ FIEO/Commodity Boards/
Authorities.

6) Selection of product

All items are freely exportable except few items appearing in prohibited/ restricted list.
 After studying the trends of export of different products from India proper selection of the
product(s) to be exported may be made.

7) Selection of Markets

An overseas market should be selected after research covering market size, competition,
quality requirements, payment terms etc. Exporters can also evaluate the markets based
on the export benefits available for few countries under the FTP. Export promotion
agencies, Indian Missions abroad, colleagues, friends, and relatives might be helpful in
gathering information.

8) Finding Buyers

Participation in trade fairs, buyer seller meets, exhibitions, B2B portals, web browsing are
an effective tool to find buyers. EPCs, Indian Missions abroad, overseas chambers of
commerce can also be helpful. Creating multilingual Website with product catalogue, price,
payment terms and other related information would also help.

9) Sampling

Providing customized samples as per the demands of Foreign buyers help in getting export
orders. As per FTP 2015-2020, exports of bonafide trade and technical samples of freely
exportable items shall be allowed without any limit.

10) Pricing/Costing

Product pricing is crucial in getting buyers attention and promoting sales in view of
international competition. The price should be worked out taking into consideration all
expenses from sampling to realization of export proceeds on the basis of terms of sale i.e.
Free on Board (FOB), Cost, Insurance & Freight (CIF), Cost & Freight(C&F), etc. Goal of
establishing export costing should be to sell maximum quantity at competitive price with
maximum profit margin. Preparing an export costing sheet for every export product is
advisable.

11) Negotiation with Buyers

After determining the buyers interest in the product, future prospects and continuity in
business, demand for giving reasonable allowance/discount in price may be considered.

12) Covering Risks through ECGC

International trade involves payment risks due to buyer/ Country insolvency. These risks
can be covered by an appropriate Policy from Export Credit Guarantee Corporation Ltd
(ECGC). Where the buyer is placing order without making advance payment or opening
letter of Credit, it is advisable to procure credit limit on the foreign buyer from ECGC to
protect against risk of non-payment

10. Discuss physical systems used for store management.

11. What are different equipments used for material handling?

Material handling equipment is mechanical equipment used for the movement, storage, control
and protection of materials, goods and products throughout the process of manufacturing,
distribution, consumption and disposal.[1] The different types of handling equipment can be
classified into four major categories:[2] transport equipment, positioning equipment, unit load
formation equipment, and storage equipment.

The four main categories of material handling equipment include: storage,

engineered systems, industrial trucks and bulk material handling.

Storage and Handling Equipment

Storage equipment is usually limited to non-automated examples, which are

grouped in with engineered systems. Storage equipment is used to hold or buffer
materials during downtimes, or times when they are not being transported. These
periods could refer to temporary pauses during long-term transportation or long-
term storage designed to allow the buildup of stock. The majority of storage
equipment refers to pallets, shelves or racks onto which materials may be stacked in
an orderly manner to await transportation or consumption. Many companies have
investigated increased efficiency possibilities in storage equipment by designing
proprietary packaging that allows materials or products of a certain type to conserve
space while in inventory.

Examples of storage and handling equipment include:

Racks, such as pallet racks, drive-through or drive-in racks, push-back racks,

and sliding racks
Stacking frames
Shelves, bins and drawers
Mezzanines
Engineered Systems

Engineered systems cover a variety of units that work cohesively to enable storage
and transportation. They are often automated. A good example of an engineered
system is an Automated Storage and Retrieval System, often abbreviated AS/RS,
which is a large automated organizational structure involving racks, aisles and
shelves accessible by a shuttle system of retrieval. The shuttle system is a
mechanized cherry picker that can be used by a worker or can perform fully
automated functions to quickly locate a storage items location and quickly retrieve it
for other uses.

Other types of engineered systems include:

Conveyor systems
Robotic delivery systems
Automatic guided vehicles (AGV)

Industrial Trucks

Industrial trucks refer to the different kinds of transportation items and vehicles
used to move materials and products in materials handling. These transportation
devices can include small hand-operated trucks, pallet-jacks, and various kinds of
forklifts. These trucks have a variety of characteristics to make them suitable for
different operations. Some trucks have forks, as in a forklift, or a flat surface with
which to lift items, while some trucks require a separate piece of equipment for
loading. Trucks can also be manual or powered lift and operation can be walk or ride,
requiring a user to manually push them or to ride along on the truck. A stack truck
can be used to stack items, while a non-stack truck is typically used for
transportation and not for loading.

There are many types of industrial trucks:

Hand trucks
Pallet jacks
Pallet trucks
Walkie stackers
Platform trucks
Order picker
Sideloader
Many types of AGV

Bulk Material Handling Equipment

Bulk material handling refers to the storing, transportation and control of materials
in loose bulk form. These materials can include food, liquid, or minerals, among
others. Generally, these pieces of equipment deal with the items in loose form, such
as conveyor belts or elevators designed to move large quantities of material, or in
packaged form, through the use of drums and hoppers.

Conveyor belts
Stackers
Reclaimers
Bucket elevators
Grain elevators
Hoppers
Silos

12. Explain the influence of MRP on purchasing process

2015
1. List the components of inventory record file
2. Explain different types of sourcing
2014

3. Explain first in first out in inventory management

"FIFO" stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold
first but do not necessarily mean that the exact oldest physical object has been tracked and sold.
In other words, the cost associated with the inventory that was purchased first is the cost
expenses first. With FIFO, the cost of inventory reported on the balance sheet represents the
cost of the inventory most recently purchased.
Consider this example: Foo Co. had the following inventory at hand, in order of acquisition in
November:

Number of units Cost

100 units $50

125 units $55

75 units $59

If Foo Co. sells 210 units during November, the company would expense the cost associated
with the first 100 units at $50 and the remaining 110 units at $55. Under FIFO, the total cost of
sales for November would be $11,050. The ending inventory would be calculated the following
way:

Number of units Price per unit Total

Remaining 15 units $55 $825 ($55 x 15 units)

75 units $59 $4425 ($59 x 75 units)

Total $5250

Thus, the balance sheet would now show the inventory valued at $5250.

4. List down all import and export documents required for a manufacturing industry
2014 7

5. List major benefits of using e procurement for suppliers

top seven benefits to e-procurement

process.
#1 Reduced Costs
E-procurement saves you money by preventing duplicate spending,
leveraging volume buying, and saving you costs associated with paper-
based systems (for example, the cost of stamps to mail your paperwork).

#2 Transparent Spending
Electronically conducting your procurement makes it easier to write and
analyze reports on your procurement systems, meaning you can ensure
that your procurement procedures conform to your policies.

#3 Increased Productivity
Once youve learned the system, e-procurement is less time-consuming
than traditional procurement. Having your records stored electronically
makes it easier to submit reusable tenders. Meanwhile, use of templates
means paperwork can be filled out more quickly.

#4 Eliminating Paperwork
Tired of finding new space to store all that paperwork? With e-procurement,
everything can be saved and stored electronically. This not only saves you
from needing more room, it also makes the process of finding older tenders
more simple.

#5 Increased Transaction Speed

E-procurement is both time-saving and efficient. As the electronic handling
of tasks supports and simplifies the purchasing process, transaction speed
is increased. Also, because of e-enabled relationships with suppliers,
procurement cycle times speed up. The e-procurement process eliminates
unnecessary activities, allowing you to focus on more valuable tasks.

#6 Standardized Buying
When you have various departments making procurement decisions, there
can be differences in what and how they purchase. Conducting purchasing
electronically makes it easier for every department to conform to company
procurement standards.

#7 Reduced Errors
Electronic paperwork is streamlined and thus easier to check for errors
theres no messy printing to get in the way either. Along with this, past
orders are more easily referenced, meaning theres a greater chance that
your company can compare orders to ensure new ones are correct.

6. Explain different factors influencing design for stores building

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7. Expand EMD

What is 'Earnest Money'

Earnest money is a deposit made to a seller showing the buyer's good faith in a
transaction. Often used in real estate transactions, earnest money allows the buyer
additional time when seeking financing. Earnest money is typically held jointly by the
seller and buyer in a trust or escrow account.

BREAKING DOWN 'Earnest Money'

An earnest money deposit shows the seller that a buyer is serious about purchasing
a property. When the transaction is finalized, the funds are put toward the
buyer's down payment. If the deal falls through, the buyer may not be able to reclaim
the deposit. Typically, if the seller terminates the deal, the earnest money will be
returned to the buyer. When the buyer is responsible for retracting the offer, the
seller will usually be awarded the money.
 8. Explain the relation between the quality of the product produced by a company and
purchase of material. Give one example

Quality is an important part of the supply chain, whether it is quality inspections

during the manufacturing process, quality checks before goods arrive at the customer,
or checking the quality as raw materials and parts enter the factory.

Before any part or raw material is used in a manufacturer of a finished good that will
be delivered to a customer, it is the responsibility of the purchasing department to
ensure that the materials that arrive are of the correct quality specification.

Quality in the Purchasing Process

When the purchasing department is looking at the procurement of materials from

suppliers they will have been given some guidance by the manufacturing department,
research, and development, or the quality department.

This should include a variety of information about the item to be sourced, such as:

Physical description
Dimensional measurements
Chemical composition
Performance specifications
Industrial standards
Brand name

Physical Description

The purchasing department must know the physical attributes of the part they are
required to source.

For example, if the required material must be made of a certain shade of a blue, then
the purchasing department must be able to communicate that requirement to the
potential suppliers to ensure that the specification can be met.

Chemical Composition

This is very important for sourced materials that are used in the chemical process.

The quality department should give the purchasing team a detailed list of chemical
specifications of the required material. This should include a list of characteristics and
specifications that the materials should conform to, as well as the ranges that the
materials must lie within.

For example, a sourced chemical may be required to have a pH of between 5.6 and
5.9; otherwise, the material would not be suitable for the manufacturing processes.

Dimensional Measurements

For a part to be used in the manufacturer of a machine the part must conform to
certain dimensional specifications.

For example, if the manufacture of a finished item required the use of a Pentalobe TS1
screw with a length of 4mm, then the supplier must be able to produce the item in that
correct size.

Performance Specifications

If a part is required to withstand certain forces or perform in a particular manner, the

purchasing department must find a supplier that can achieve those specifications.

For example, on a household item such as a washing machine, the rubber belt that is
used must be bale to withstand certain forces and not fail within a certain number of
revolutions. This quality measurement is key for a business if they are to produce
finished goods that are reliable in the eyes of their customers. Therefore, it is
important for the purchasing department to find suppliers who can provide parts that
meet quality specifications.

Industrial Standards

Some parts required in the production of finished goods must conform to certain
industry standards.

These standards are set by a number of trade or industry groups who try to maintain a
certain level of quality.

By having an item that conforms to a particular industry standard, the customer will
have a level of confidence in the product.

There are a number of industry standards that are used, such as Society of Automotive
Engineers (SAE), which is a global association of more than 128,000 engineers and
related technical experts in the aerospace, automotive and commercial-vehicle
industries. The society has hundreds of standards that relate to different technical
aspects of manufacturing.
Brand Name

Sometimes the quality department or development team will inform the purchasing
department to only source a particular brand name.

This may be due to the specific nature of the part made by one company or the level of
quality it has over competitors.

Summary

The quality of the parts and raw materials that are used by a company makes a
difference to the finished products that are sold to their customers.

By ensuring that the purchased parts are of a specific quality, as defined by the
development, manufacturing, or quality departments, the purchasing department is
ensuring that the quality of the finished goods is maintained.

9. Explain different methods and procedures of purchasing

Some of the methods of purchasing are discussed as follows:

1. Purchasing by Requirement:
This method refers to those goods which are purchased only when needed
and in required quantity. The goods which are not regularly required are
purchased in this way. On the other hand it refers to the purchase of
emergency goods. These goods are not kept in store. Purchasing
department must be in knowledge of the suppliers of such goods so that
these are purchased without loss of time.

2. Market Purchasing:
Market purchasing refers to buying goods for taking advantages of
favourable market situations. Purchases are not made to meet immediate
needs but are acquired as per the future requirements. This method will be
useful if future needs are estimated accurately and purchases are made
whenever favourable market situations arise. The market situation is
constantly studied for forecasting price trends.

The advantages of this method are: lower purchase prices, more margin on
finished products due to lower material cost and saving in purchase
expenses. This method suffers from some limitations: losses in case of
wrong judgment, fear of obsolescence, higher storing expenses due to
more purchases.

3. Speculative Purchasing:
Speculative purchasing refers to purchases at lower prices with a view to
sell them at higher prices in future. The attention in this method is to earn
profits out of price rises later on. The purchases are not made as per the
production needs of the plant rather these are far in excess of such
requirements. A cloth mill may purchase cotton in the market when prices
are low with the attention of earning profits out of its sales when prices go
up.

Speculative purchasing should not be confused with market purchasing.

The former is done to earn profits out of future price rises where as the
latter is concerned with purchasing for own needs when favourable market
situations exist. Though speculative purchasing may result in profits but
there are chances of prices going down in future, fear of obsolescence and
incurring higher storage costs.

4. Purchasing for Specific Future Period:

This method is used for the purchase of those goods which are regularly
required. These goods are needed in small quantity and chances of price
fluctuations are negligible. The needs for specific period are assessed and
purchases made accordingly. The requirements for such purchases may be
assessed on the basis of past experience, period for which supplies are
needed, carrying cost of inventory etc.

5. Contract Purchasing:
In the words of Spriegel it is the purchasing under contract, usually formal,
of needed materials, delivery of which is frequently spread over a period of
time. Under this method a specific quantity of materials is contracted to be
purchased and delivery is taken in future. Even though the goods are
procured in future but the price and other terms and conditions are fixed at
the time of contract. This method may be useful when price rises in future
may be expected and material requirements for future may be accurately e
6. Scheduled Purchasing:
Under this method the suppliers are supplied a probable time schedule for
material requirements so that they are in a position to arrange these in
time. An accurate production schedule is prepared for estimating future
material needs. The suppliers are informed of probable needs and orders
are sent accordingly. The schedule provided by the purchaser to the
vendor is not a contract. This is only a gentlemans agreement for terms
and conditions of purchases. The main objectives of this method are:
minimum inventory, prompt service. low prices, quality goods etc.

7. Group Purchasing of Small Items:

Sometimes a number of small items are required to be purchased. The
prices of these items are so small that costs of placing orders may be more
than prices. In such situations the buyer places order with a vendor for all
these items. The purchase price is agreed to be by adding some
percentage of profit in the dealers cost. This method will be used only
when dealers records are open to inspection for determining his cost. This
type of purchasing reduces the cost of the buyer by eliminating much
clerical work.

8. Co-operative Purchasing:
Small industrial units may join to pool their requirements and then place
bulk orders with dealers. This will help them in availing rebates on large
quantity purchases, cash discounts and savings in transportation costs.
After receiving the materials these are divided among the member units.
Co-operative purchasing helps small units in availing the benefits of bulk
purchasing.

10. Explain store systems procedure used by different companies

11. Explain the evolution of materials management

Material management is an essential business function and it is concerned with planning,
acquisition and flow of materials within the supply chain. Material is one of the four basic
resources (labor, material, equipment and capital) of any industrial of business activity. For
a long time, it was regarded as a routine function with less importance but over the years,
with accelerating economic, technological, societal and environmental changes, this
function has become more important, more complex and more professional.

The evolution of material management can be grouped in three separate periods, early part
of twentieth century; the function of materials management was largely reactive and
clerical. Its contribution to profit was not perceived as significant and management did not
attach much importance to it.

In the second period, two important developments took place. After second world was,
demand for consumer goods increased greatly. This created a shortage of raw material,
leading to innovative concepts like substitution of material and value engineering. Then the
oil crisis of the 1970s occurred. Petroleum products and their derivatives become scarce.
There was sharp rise in the cost of raw material and this led to the increase in cost of
inventory.

Purchase managers were forced to adopt innovative and proactive measure such as looking
for new sources of supply, finding substitute products, applying value analysis in purchased
products, specification change that allowed use of less costly and scarce materials, use of
scientific methods of inventory control policies, partnerships, involving carefully chosen
suppliers at an early stage in design and development, and increasing integration of
information system.

All of the above action allowed purchasing to fulfill its role as an expense controller for the
organization and helped to increase regard for the purchase department as a contributor to
profit. Towards the end of twentieth century firms believed in purchasing fewer items.
Generally, they were purchasing raw material and converting these into end products.
Consequently, the concept of outsourcing emerged and firms tried to outsource items
which did not fall under their core competency. Responsibility of outsourcing fell on the
purchase managers; this responsibility makes material manager as key role player in all
organizations.

12. Explain the disadvantage of using e procurement system over traditional purchasing
system
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13.
 14. Explain the objectives of e procurement. explain the various components of e
procurement software solution

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