Exam 12: Materials Management Impacts All Supply Chain Participants

Raw materials have value added by the operations.Mining,growing,refining,cleaning,packing and shipping add value.

How is DOI calculated?

Thailand has not become a large source of labor-intensive production for the U.S.A.

If labor is 20 percent and materials 80 percent of COGS-say $20 and $80,then a 10 percent reduction in labor costs yields $18 added to $80 totals $98.This produces a 2 percent reduction in total costs [i.e.,(100 - 98)/100 = 0.02].Make the same comparison for a 20 percent reduction in materials costs.

What are Purchasing Records?

What captures the essence of supply chain objectives regarding throughput and value added?

The strategic component came into play during start-up,when deciding what goods were to be made and what services were to be offered.

The 2002 longshoremen's port strike in Los Angeles epitomized the problem of (port) management not knowing how to convince unions that the use of technology for very labor-intensive work could be in everyone's best interest.

ABC classification of materials is most often done in terms of annual dollar volume.This identifies the most important SKUs as A-class.Increasing numbers of organizations try to prepare for shortage situations by overstocking the C-class of items.

For a manufacturing firm,which class of materials does not have to be purchased from an outside source?