What do you understand by the concept material? 2. Define Material Control . Wha

Question

What do you understand by the concept material? 2. Define Material Control . What are the important functions of Materials Control? 4. Explain the objectives of Material Control 5. Explain briefly the essentials of Materials Control. 6. What are the advantages of Material Control? 7. What do you mean by material purchase control? What is Centralized Purchasing? What are its merits and demerits? What is meant by Decentralized Purchasing? 0 What are the important functions of the purchasing department? . Explain briefly the duties of a purchase Manager in a large organization. 12. What are the important functions of the purchasing department? 3. What are the procedure to be adopted for purchasing the materials? 14. Write Short notes on: (a) Bill of Materials (b) Material Requisition (c) Goods Received Note (d) Purchase Order

Explanation / Answer

1. Material means the raw material and other supplies used for the production purpose by the concern. Effective management of the same is important in ensuring quality of goods produced.

2. A system for checking that a company or an enterprise has enough materials in stock for its production needs. It is not storing more than an enterprise need because it will become an unnecessary use of working capital. It is used to ensure adequate quality and quantity of materials for uninterrupted production process with the objective of minimizing material cost per unit.

3.

The following functions are assigned for material control

i) Production and Material Control:

Production schedules are prepared on the basis of orders received or anticipated demand for goods. It is ensured that every type or part of material is made available so that production is carried on smoothly without any distraction.

ii) Purchasing:

Purchasing department is authorized to make buying arrangements on the basis of requisitions issued by production department. This department keeps contracts with suppliers and collects quotations etc. at regular intervals. This department is to purchase proper quality goods at reasonable prices. Purchasing right quantity and quality of material is important because it will otherwise effect the working capital

iii) Non-Production Stores:

Non-production materials like office supplies, perishable tools and maintenance, repair and operating supplies are maintained as per the needs of the business. These stores may not be required daily but their availability in stores is essential. The non-availability of such stores may lead to stoppage of work.

iv) Transportation:

The vehicles may either be purchased for the business or these may be chartered from outside. It all depends upon the quantity and frequency of buying materials. The purpose is to arrange cheap and quick transport facilities for incoming materials.

v) Materials Handling:

It is concerned with the movement of materials within a manufacturing establishment and the cost of handling materials is kept under control. It is also seen that there are no wastages or losses of materials during their movement.

vi) Receiving:

The receiving department is responsible for the unloading of materials, counting the units, determining their quality and sending them to stores etc.

4.

Objectives of Materials Control

(a) To enable uninterrupted production:

The main object of material control is to ensure smooth and unrestricted production. Production stoppages and production delays cause substantial loss to a concern.

(b) To ensure quality of materials:

The quality of finished products depends mainly on the quality of raw materials used. If quality of the raw materials is not up to desired standards, the end product will not be of desired quality which affects the sale of the product in the market resulting in loss of profits as well as goodwill of the concern.

(c) To minimise wastage:

The loss of material may occur due to various mistakes like careless handling of materials, poor packing etc. The causes responsible for such losses must be brought to light and efforts should be made to minimise the wastage of raw materials. This is possible only by introducing an efficient materials control system.

(d) To fix responsibility

A proper system of materials control also aims at fixing responsibility of operating units and individuals connected with the purchase, storage and handling of materials.

(e) To provide information

Another objective of materials control is to provide accurate information regarding material cost and inventory whenever needed by management.

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