HARAMAYA UNIVERSITY
COLLEGE OF CONTINUING AND DISTANCE
EDUCATION
DEPARTMENT OF MANAGEMENT
ASSGNMENT 30%
ASSIGNMENT FOR THE COURSE: MATERIALS MANAGEMENT
Personal Information
Name-----------------------------------------------------ID NO----------------------------------------------------Department----------------------------------------------Center_______________________
WISH YOU ALL THE BEST!!
1
ANSWER SHEET FOR PART ONE AND PART TWO:
1.
2.
3.
4.
5.
6.
Fill in the
blank space
7.
1.
8.
2.
9.
3.
10.
4.
5.
PART 1: MULTIPLE CHOICE (1 POINT EACH).
1. Which of the following is correctly matched
A. Finished goods inventories-- Raw materials, parts, and components
B. Production inventories-- Maintenance, repair, and operation supplies
C. MRO inventories--- Completed products ready for shipment
D. All
E. None
2. In operations management, _________________refers to any scarce resource that remains idle
in anticipation of satisfying a future demand for it.
A. Resources
D. Supply
B. Inventory
E. None
C. Materials
3. An inventory is used up to cover actual demand and there is a need for replenishment, it
is important to decide on how much to order at a time
A. Economic order production
D. MRP
B. Economic order quantity
E. None
C. ABC analysis
4. To protect against such reasonable but nevertheless random, i.e., uncontrollable
occurrences, it is necessary to maintain additional inventory beyond what is needed for
normal requirements.
A. Buffer stock
D. EPQ
B. MRP
E. None
C. EOQ
2
5. One of the following is not the merit of FIFO method.
A. It is most suitable when the prices are falling.
B. Simple to understand and easy to operate
C. It is correctly as curtained for cost of job or work-order
D. Closing stock of raw materials is valued at recently purchased price.
E. None
6. Which of the following demand forecasting technique is not grouped under quantitative
demand forecasting method?
A. Exponential smoothing
D. Trend projections
B. Weighted moving average
E. None
C. Simple moving average
7. The demand for summer production inputs increases every three years before and after
the summer production. This demand illustrates
A. Cyclical
D. Seasonal pattern
B. Random variation
E. None
C. Trend
8. -----------------is used to define a functional relationship between two or more correlated
variables.
A. Simple linear regression
D. Panel consensus
B. Multiple regressions
E. None
C. Trend projections
9. Which of the following are objectives of materials management?
A. Keep inventory investment and loss at a minimum
B. Maintain adequate quality standards.
C. Purchase required items and services at least possible price.
D. Maintain the organization’s competitive position
E. All of the above
10. The structure of material management can depend on:
A. The size of the organization
D. All
B. Management Philosophy of
E. None
the organization.
C. The type of business
Part 2
Fill in the blank space
1. _______________ are an extension of the simple regression analysis and it allows
building a model with more than one independent variable
2. The important aspects in _________________&____________ are choice of mode of transport,
route selection, rate verification and auditing, management of calms and lost shipments as well as
application of linear programming to minimize transportation costs.
3
3. ___________________________is the function dealing with the preparation, placing and
positioning of materials to facilitate their movement or storage
4. In _________________________ "purchasing is the procuring of materials, supplies,
machines, tools and services required for the equipment, maintenance and operation of
the business.
5. ___________________________is a term to describe the grouping of management
functions related to the complete cycle of material flow, form the purchase and internal
control of production materials to the planning and control of work-in progress, to the
warehousing, shipping and distribution of finished products.
Part3: work out questions
1. Assume that you are the member of the tender committee in your organization. The
committee has decided to use the cost ratio method to evaluate and select suppliers.
The tender committee has decided to use four (4) factors: quality, delivery, services and
price to evaluate the suppliers.
The past performance of suppliers with respect to: total purchased, quality, delivery and service,
is available from the records of the purchasing department. Total amount of previous purchases
is given on the following table.
Supplier
W
X
Y
Z
Purchase in birr
200,000
220,000
100,000
160,000
XYZ Plc is Data related to quality costs from the suppliers:
(Rejects, reworks and etc)
Supplier
W
X
Y
Z
Quality costs in birr
1,000
3,600
3,200
3,800
4
Data related to delivery costs from suppliers:
(Telephone, fax and etc)
Supplier
W
X
Y
Z
Delivery costs in birr
3,000
1,200
3,200
3,800
Service performance ratings (in points)
Supplier
W
X
Y
Z
Service costs in birr
84
90
56
49
Assume that service standard set by your organization is 60 points.
Recent price quotation for supply is:
Supplier
W
X
Y
Z
Price in birr
94
95
96
92
N.B the service standard is 80 points and the weight of services is 30%.
Which supplier shall the tender committee of your organization select and offers the bid
award?(8 points).
2.
In problem whether it has to produce an item or buy is from outside supplier at cost of
birr 20/unit. The management body is provided with the necessary information
concerning the decision by the production department engineering group. The cost
making the item is expected to be:
Labor cost-------------------- 6birr/unit
Material cost------------------4birr/unit
In addition there will be a fixed cost of birr 38,000 annually in acquisition of new machine for
this purpose. The estimated annual demand for the item in the next year is 24,000units.
Requirements: Which decision will be profitable for the plc, making or buy? (4 points).
5
3. Assume that ABC enterprise buys and uses 66,000 units annually. Ordering cost is
estimated to be 50 birr per each order and carrying cost is estimated to be 0.75 birr per
unit per year. Each unit of the items cost 4 birr per unit.
Required: What should be the level of optimum order size? (3 point).
6