1

UNIVERSITY OF MINDANAO

College of Business Administration Education

Program: Human Resource Management

Physically Distanced but Academically Engaged

Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)

Course/Subject: CBM 112

Name of Teacher: RESTIE E. TORRES,MBA

THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

REPRODUCTION AND DISTRIBUTION OUTSIDE OF ITS INTENDED USE.
THIS IS INTENDED ONLY FOR THE USE OF THE STUDENTS WHO ARE
OFFICIALLY ENROLLED IN THE COURSE/SUBJECT.
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EXPECT REVISIONS OF THE MANUAL.

Table of Contents

PART 1: COURSE OUTLINE POLICY 5

PART 2: INSTRUCTION PROPER 5
BIG PICTURE A 5
WEEK 1-3: Introduction to Production and Operation Management 9
Unit Learning Outcome (ULO A) 9
Metalanguage 9
Essential Knowledge

Introduction of Production and Operation Management 10

Operation Management Topics 12
The difference between production and operation 13
Evolution of production and operation management 14
Production concept 16
Objectives of production management 17
Element of product management and operation Management 18
Objectives of operation management 20
Scope of Production and Operation Management 28
Strategies of Operation Management 28
Factor of Production 29

Production System 36
Production Model 37
Production system design 38
Classification of system 38

Capacity Planning 46
Types of capacity planning 46
Capacity measurement 47
Priority rules 47
Four types of capacity planning 47
Capacity planning technique 49
Aggregate planning 51
Aggregate planning strategies 53
Capacity measurement 56

Week 4 to Week 5
Material Management 60
Scope of material management 62
Material Requirement Planning Process 63
Four basic Purchasing activities 63
Five basic traffic activities 65
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Benefits of integrated waste management 66

Comprehensive waste stream analysis 67
Selection of supplies 67
Human engineering 68
Codification 69
Effective of value analysis 69
Value analysis framework 69
Step in value analysis 69
Store management 70

INVENTORY MANAGEMENT AND CONTROL 75

Inventory control management 75
Reason for keeping inventories 75
Inventory control 75
Objective of Inventory control 76
Benefits of inventory control 76
Technique of inventory 76

Week 6 to Week 7
Material Requirement Planning (MRP) 80
Benefits of MRP 82
MRP Functions 83
MRP System Structure 84
Overview of Inventory Planning with MRP 85
Bill of Material 85

Quality Assurance and control 88

Differences of quality assurance and quality control 88
Quality Assurance 89
Quality Control 90
Concept of quality 90
Total Quality Management 91
Quality Perspective 94
Quality Level 94
Historical Philosophies of Quality 95
Quality Gurus 97
Cost of Quality 102
Typical Quality Cost Ratio 104
Assuring customer satisfaction 105
Process management 107
ISO 109
Quality Management System 109
ISO Series 110

Work Measurement 115

Standard time 115
Work measurement and time study 115
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Work measurement technique 115

Purpose of work measurement 116
Normal time 117
Uses of work measurement 118
Work measurement technique 119
Methods of work measurement 120
Time study 120
Work sampling 121

Supply chain management 124

Common and accepted definition SCM 125
Needs of SCM 126
Benefits of SCM 127
Sales and operation planning 127
Benefits of SCM 127
Integrated supply chain 130
Logistics 131
Outsourcing logistics 132
Electronic Data Interchange (EDI) 132
EDI Process 133
E-Commerce 133
Requirement for Supply Chain Management 134
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Course Outline: CBM 112 – OPERATION MANAGEMENT AND

TQM
Course Coordinator: RESTIE E. TORRES, MBA

Email: [email protected]

Student Consultation: Done by online (LMS) or thru text, emails or calls

Mobile: 0922-827-6610 sun / 0977-342-2169 globe

Phone: (082) 2275456 / (082) 300-0647

Effectivity Date: June 2020

Mode of Delivery: Blended (On-Line with face to face or virtual sessions)

Time Frame: 54 Hours

Student Workload: Expected Self-Directed Learning

Requisites: None

Credit: 3

Attendance Requirements: A minimum of 95% attendance is required at all

scheduled Virtual or face to face sessions.

Course Outline Policy

Areas of Concern Details

Contact and Non-contact Hours This 3-unit course self-instructional manual is designed
for blended learning mode of instructional delivery with
scheduled face to face or virtual sessions. The
expected number of hours will be 54 including the face
to face or virtual sessions. The face to face sessions
shall include the summative assessment tasks (exams)
since this course is crucial in the licensure examination
for teachers.
Assessment Task Submission Submission of assessment tasks shall be on 3rd, 5th, 7th
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and 9th week of the term. The assessment paper shall

be attached with a cover page indicating the title of the
assessment task (if the task is performance), the
name of the course coordinator, date of submission
and name of the student. The document should be
emailed to the course coordinator. It is also expected
that you already paid your tuition and other fees before
the submission of the assessment task.

If the assessment task is done in real time through the

features in the Blackboard Learning Management
System, the schedule shall be arranged ahead of time
by the course coordinator.

Turnitin Submission (IF To ensure honesty and authenticity, all assessment

NECESSARY) tasks are required to be submitted through Turnitin
with a maximum similarity index of 30% allowed. This
means that if your paper goes beyond 30%, the
students will either opt to redo her/his paper or explain
in writing addressed to the course coordinator the
reasons for the similarity. In addition, if the paper has
reached more than 30% similarity index, the student
may be called for a disciplinary action in accordance
with the University’s OPM on Intellectual and Academic
Honesty.

Please note that academic dishonesty such as cheating

and commissioning other students or people to
complete the task for you have severe punishments
(reprimand, warning, expulsion).
Penalties for Late The score for an assessment item submitted after the
Assignments/Assessments designated time on the due date, without an approved
extension of time, will be reduced by 5% of the possible
maximum score for that assessment item for each day
or part day that the assessment item is late.

However, if the late submission of assessment paper

has a valid reason, a letter of explanation should be
submitted and approved by the course coordinator. If
necessary, you will also be required to present/attach
evidences.
Return of Assessment tasks will be returned to you two (2) weeks
Assignments/Assessments after the submission. This will be returned by email or
via Blackboard portal.

For group assessment tasks, the course coordinator

will require some or few of the students for online or
virtual sessions to ask clarificatory questions to validate
the originality of the assessment task submitted and to
ensure that all the group members are involved.
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Assignment Resubmission You should request in writing addressed to the course

coordinator his/her intention to resubmit an assessment
task. The resubmission is premised on the student’s
failure to comply with the similarity index and other
reasonable grounds such as academic literacy
standards or other reasonable circumstances e.g.
illness, accidents financial constraints.
Re-marking of Assessment You should request in writing addressed to the program
Papers and Appeal coordinator your intention to appeal or contest the
score given to an assessment task. The letter should
explicitly explain the reasons/points to contest the
grade. The program coordinator shall communicate
with the students on the approval and disapproval of
the request.

If disapproved by the course coordinator, you can

elevate your case to the program head or the dean with
the original letter of request. The final decision will
come from the dean of the college.
Grading System Course exercises – 30% (including BlackBoard forum)
1st exam – 10%
2nd exam – 10%
3rd exam – 10%
Final exam – 40
Preferred Referencing Style (IF Follow the APA 6th Edition format
THE TASK REQUIRES)

Student Communication You are required to create a umindanao email account

which is a requirement to access the BlackBoard
portal. Then, the course coordinator shall enroll the
students to have access to the materials and resources
of the course. All communication formats: chat,
submission of assessment tasks, requests etc. shall be
through the portal and other university recognized
platforms.

You can also meet the course coordinator in person

through the scheduled face to face sessions to raise
your issues and concerns.

For students who have not created their student email,

please contact the course coordinator or program head.
Contact Details of the Dean Dr. Vicente Montaňo
Email:vicente_montaň[email protected]
Phone: 082-227-5456 local 131
Contact Details of the Program Ramonchito M. Nalangan, MM
Head Email: [email protected]
Phone: 082-227-5456 local 131
Students with a Special Needs Students with special needs shall communicate with
the course coordinator about the nature of his or her
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special needs. Depending on the nature of the need,

the course coordinator with the approval of the program
coordinator may provide alternative assessment tasks
or extension of the deadline of submission of
assessment tasks. However, the alternative
assessment tasks should still be in the service of
achieving the desired course learning outcomes.
Online Tutorial Registration (IF Your course coordinator will endorse you to the tutorial
NECESSARY) or enhancement program offered by the CBAE-HR
program. This can be done on-line or you can call or
text directly the course coordinator for assistance if you
do not have internet connection.
Help Desk Contact Mr. Reil Romero
LMS Coordinator
Email: [email protected]
Phone: (082) 227-5456 local 131
Library Contact Details Ms. Brigida E. Bacani
Head -LIC
Email: [email protected]
Phone: 082-300-5456
Hotline: 0951-376-6681

Course Information – see/download course syllabus in the Black Board LMS

CC’s Voice: Hello prospective HR Practitioner! Welcome to this course CBM 112: The
Business and School Curriculum. By now, we are confident that you really
wanted to become an HR and that you have visualized yourself already being
in front of the business world.

CO

1. Articulate the fundamental concept and applications of operation

management and TQM.
2. Apply the process that integrates and converts several resources
used in the operation of the organization.

Let us begin!
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Big Picture

Week 4-5: Unit Learning Outcomes (ULO) 2: At the end of

the unit, you are expected to
a. Discuss the concepts of material management
b. Explain the nature and importance of inventory management system

Big Picture in Focus: ULO a. Discuss the concept of material

management

Metalanguage

Material Management - is a total concept having its definite organization to plan and
control all types of materials, its supply, and its flow from raw stage to finish stage. It
can be defined as the function of the business that is responsible for coordination of
planning, sourcing, purchasing, moving and storing materials

Sub-function:

1. Materials planning and control – materials required for any operations are
based on the sales forecast and production plans.
2. Purchasing – the job of a material manager is to provide to the user
departments right material at the right time in right quality at right price from
the right source.
3. Stores Keeping - refers to the safe custody of all items of raw materials,
supplies, finished parts, purchased parts etc. In the store room for which the
store keeper acts as a trustee. It is said to be the process of receiving and
distributing stores or supplies.
4. Inventory Control – one of the powerful ways of controlling the materials
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Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) from week 4 to week 5
of the course, you need to fully understand the following essential knowledge that will be laid
down in the succeeding pages. Please note that you are not limited to exclusively refer to
these resources. Thus, you are expected to utilize other books, research articles and other
resources that are available in the university’s library e.g. ebrary, search.proquest.com
etc.

Material Management

Material planning is concerned with Objectives of material management:

answering three basic questions:

To balance the demand for material with

the supply of material so that an
1. What materials are required? appropriate quantity of material is
available when they are needed.
2. How many are required?

3. When are they ready?

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Scope of Materials Management

Material management strives to ensure that the material cost component of the total cost
be the least.

In order to achieve this, the control is exercised in the following fields:

 Materials Planning
 Purchasing
 Store Keeping
 Inventory Control
 Receiving, Inspection and Dispatching
 Value Analysis, Standardization and Variety Reduction
 Materials Handling and Traffic
 Disposal of Scrap and Surplus, Material Preservation
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Material Planning –is a scientific technique of determining in advance the requirement of

raw materials, ancillary parts and components, spares etc. ad directed by the production
program. It is the overall planning activity.

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Purchasing – is a business or organization attempting to acquire goods or services to

accomplish its goals. Although there are several organizations that attempt to set standards
in the purchasing process, processes can vary greatly between organizations.

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Purchasing Department – also called procurement department buys materials based on

the purchase requisition from user departments and store departments and annual
production plan. Support operations by serving as the primary buyer of goods and services
in a private sector company, government agency, educational institution or another type of
organization.

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Four Basic Purchasing Activities

1. Selecting suppliers, negotiating and issuing purchase order

2. Expediting delivery from suppliers
3. Acting as a liaison between suppliers and other company departments
4. Looking for new products, materials and supplier that can contribute to
company objectiveness

Purchase System

Forward Buying – occurs when retailers purchase units during a particular period,
hold some of them in inventory, and then sell them in subsequent period.

Tender Buying – invites bids for a project accept a formal offer.

Blanket Order System – which a customer places with its supplier to allow multiple
delivery dates over a period of time, often negotiated to take advantage of
predetermined pricing. It is normally used when there is a recurring need for
expendable goods.

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Zero Stock – no on-hand inventory stock / is to order the exact quantity that will be
sold, and receipt goods into stock when they are needed

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Rate Contract (RC) or rate of agreement – is procurement cost reduction strategy

aimed at standardizing procurement prices for commonly procured, homogenous and
price varying inputs.

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Reciprocity – practice of exchanging things with business to other business for

mutual benefits.
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Oxford. Dictionary

Systems Contract – are exclusive contracts with designated suppliers for specific
commodities of goods or services, with pricing and others agreement.

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Stock Level - production parts and materials are checked against blueprints and
specifications. Non productions are also reviewed. Once it is as per the specification
given the goods will be accepted.

Cost - material handling section is responsible for the transport of materials to

various departments.

Five Basic Traffic Activities

1. Selecting common or charter carriers and routing for dispatch/shipments as

required.
2. Tracing in-bound shipments of materials
3. Auditing invoices from carriers and filing claims for refunds or excess charges
or for damage shipments when required
4. Developing techniques to reduce transportation cost
5. Packaging of finished products, labeling, and loading of end product in the
trades. Finally, the disposal of scraps and surplus must be done periodically
to release the capital locked in those items.

Non-Production Stores

 Maintains physical stocks of non-production items to be drawn on as needed

for operations or maintenance.
 Manages inventories of non-production materials and prepares
purchase requisition for needed materials when stocks from to the re-
order point.
 Keeps record and maintains control.

Integrated Concept
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Material managers are responsible to exercise control and coordinated with an

overview that ensures proper balance of conflicting objectives of the individual
function.

Advantages of Integrated Material Management

 Better Accountability
 Better Coordination
 Better Performance
 Adaptability to EDP
 Miscellaneous Advantage

Integrated Waste Management

Is a systematic approach that uses multiple methods to control and dispose of

waste? The goal is to divert as much solid waste as possible, and to minimize other
methods such as incineration that harm the environment.

Benefits of Integrated Waste Management

 Greater service coordination of procurement and waste management among

local government departments and agencies can lead to more efficient
service delivery and cost savings.
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 Municipal Solid Waste (MSW ) is a “clean” waste stream that requires less
procuring
 Revenue for local governments from the sale of recyclable materials in the
commodities market.
 Strengthening and expansion of both local and national economies.
 Conservation of energy and natural resources, reduction of greenhouse gas
emissions and reduction in landfills and incineration disposal.
 Growing the market for more environmentally responsible products

Comprehensive Waste Stream Analysis

Waste characterization/waste stream analysis is methods used to determine

the types of materials being dispatched in a waste stream and in what proportion.

Comprehensive waste stream answers for central question about Municipal Solid
Waste (MSW) programs:

1. What is in your community’s waste stream?

2. What are the sources of each waste type?

3. How much total waste is being generated?

4. Where is diverted waste sent?

5. Extended Producer Responsibility Policies

Based on the idea that “the polluter pays.” EPR Policies are designed to
share the cost of a product’s environmentally sustainable disposal with
manufacturers and/or consumers.

This can be achieved by integrating environmental costs into the final product
price, or holding manufacturers liable for end-of-life costs associated with reuse,
recycling, and disposal.

Selection of Suppliers

 Sources of Suppliers
- Specialized trade directories.
- Assistance of professional bodies or consultant.
- The buyer’s guide or purchase handbook.
- The manufacturer’s or distributor’s catalogue
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- Advertisements in dailies
- Advertisement in specialized trade journals
- Trade fair exhibitions
 Development of Approved List of Suppliers
 Evaluation and Selection of the Supplier
 Cost Factors
 Delivery
 Design and Specification Factors
 Legal Factors
 Vendor Rating

Human Engineering

Ergonomics (also called as "Human Engineering”)

 It is the study of the man in relation to work.

 It is concerned with man-machine system.

Objectives of Human Engineering

1. To enhance the efficiency and effectiveness with which the activities (work) is carried
out so as to increase the convenience of use, reduced errors and increase in
productivity.
2. To enhance certain desirable human values including safety reduced stress and
fatigue and improved quality of life.

Just-In-Time (JIT) Manufacturing

It is by eliminating all waste and seeking continuous improvement, it aims at

creating manufacturing system that is response to the market needs.

Seven Wastes
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1. Waste of over production eliminate by reducing set-up times, synchronizing

quantities and timing between processes, layout problems.
2. Waste of waiting eliminate bottlenecks and balance uneven loads by flexible work
force and equipment.
3. Waste of transportation establishes layouts and locations to make handling and
transport unnecessary if possible. Minimize transportation and handling if not
possible to eliminate.
4. Waste of processing itself question regarding the reasons for existence of the
product and then why each process is necessary.
5. Waste of stocks reducing all other wastes reduces stocks.
6. Waste of motion study for economy and consistency.
7. Waste of making defective products develop the production process to prevent
defects from being produced, so as to eliminate inspection.

Codification

Is a process of representing each item by a number, the digit of which

indicates the group, the sub-group, and the dimension of the items.

Objectives of Codification:

 Bringing all items together.

 To enable putting up of any future item in its proper place.
 To classify an item according to its characteristics.
 To give a unique code number to each item to avoid duplication and
ambiguity.
 To reveal excessive variety and promote standardization and variety
reduction.
 To establish common language for the identification of an items.
 To fix essential parameters for specifying an item.
 To specify items as per national and international standards.
 To enable data processing analysis.

Value Analysis

An organized creative approach which has its objective, the efficient identification of
unnecessary cost which provides neither quality nor use nor life nor appearance nor
customer features.

 Value analysis focuses engineering, manufacturing and purchasing attention to one

objective-equivalent performance at a lower cost.
 Value analysis is concerned with the costs added due to inefficient or unnecessary
specifications and features.
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 Value is not inherent in a product, it is a relative term, and value can change with
time and place.

Value Analysis Framework

 What is the item?

 What does it do?
 What does it cost?
 What else would do the job?
 What would the alternative cost be?

Steps in Value Analysis

 Identifying the Function

 Evaluation of the Function by Comparison
 Develop Alternatives
 Brain Storming sessions

STORE MANAGEMENT
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Functions of store

 To receive raw materials, components, tools, equipment and other items and
account for them.
 To provide adequate and proper storage and preservation to the various
items.
 To meet the demands of the consuming departments by proper issues and
account for the consumption.
 To minimize obsolescence, surplus, and scrap through proper codification,
preservation, and handling.
 To highlight stock accumulation, discrepancies, and abnormal consumption
and effective control measures
 To ensure good housekeeping so that material handling, preservation,
stocking, receipt and issue can be done adequately
 To assist in verification and provide supporting information for effective
purchase action

Forum / Discussion

Let’s Check

Activity 1

1. Which a customer places with its supplier to allow multiple delivery dates over a
period of time?

A. Zero Stock
B. Blanket Order System
C. Value Analysis
D. None of the choices

2. It sets safety stock level, lead time, analysis and reporting.

A. Purchasing

B. Stores

C. Inventory control
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D. None of the choices

3. Once the material is delivered, its physical control, preservation, minimization of

obsolescence and damage is done in_______.

A. Purchasing

B. Stores

C. Inventory control

D. None of the choices

4. Basically the job of materials manager is to provide the user department right
materials at the right time in right quantity of right quality at right price from the right
source.

A. Purchasing

B. Stores

C. Inventory control

D. None of the choices

5. It can be defined as the function of business that is responsible for the

coordination of planning, sourcing, purchasing, moving, storing and controlling
materials in an optimum manner.

A. Inventory control B. Materials management

C. Inventory management D. None of these

6. This helps in evaluating the performance of materials management in an objective

manner.

A. Miscellaneous advantage

B. Better accountability
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C. Better performance

D. Better coordination

7. Under a Centralized material Manager, a team spirit is inculcated and this result in
better morale and cooperation.

A. Miscellaneous advantage

B. Better accountability

C. Better performance

D. Better coordination

8. Create initiatives that divert all reusable materials into a form that is most efficient
for next use.

A. Reduce

B. Reuse

c. Recycle

D. None of these

9. Local government should implement procurement program that purchase durable,

non-toxic, energy efficient products made from recycled content.

A. Reduce

B. Reuse

C. Recycle

D. None of these

10. It is concerned with man-machine system

A. Ergonomics
B. Reciprocity
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C. Purchasing
D. All of the choices

Let’s Analyze

Activity 2

1. Discuss the scope of material management.

___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
_______________________________________________________________

2. What is codification?

___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
_______________________________________________________________

In a Nutshell

Activity 3

Discuss the concept of material management.

___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
_______________________________________________________________

Big Picture in Focus: ULOb. Explain the nature and importance of

inventory management system

INVENTORY MANAGEMENT AND CONTROL

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Inventory Control Management - Inventory generally refers to the materials in stock. It

Is also called the idle resource of an enterprise. Is the supervision of non-capitalized assets?
Or inventory, stock items, as a component of supply chain. Supervise the flow of goods from
manufactures to warehouse and from these facilities to pint of sale.

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Reasons for Keeping Inventories

• To stabilize Production
• To Take Advantage of Price Discounts
• To Meet the Demand during the Replenishment Period
• To Prevent Loss of Orders
• To Keep Pace with Changing Market Conditions

Inventory Control - is a planned approach of determining what to order, when to order and
how much to order and how much to stock so that costs associated with buying and storing
are optimal without interrupting production and sales.

Problems:

1. When should an order be placed? (Order level)

2. How much should be ordered? (Order quantity)

Scientific Inventory System - strikes the balance between the loss due to non-availability
of an item and cost of carrying the stock of an item

Scientific Inventory Control - maintaining optimum level of stock of goods required by the
company at minimum cost to the company

Objectives of Inventory Control

 24

 To ensure adequate supply of products to customer and avoid shortages as far as

possible
 To make sure that the financial investment on inventories is minimum
 Efficient purchasing, storing, consumption and accounting for materials is an
important objective
 To maintain timely record of inventories of all the items and to maintain the stock
within the desired limits
 To ensure timely action for replenishment
 To provide a reserve stock for variations in lead times of delivery of materials
 To provide a scientific base for both short-term and long-term planning of materials

Benefits of Inventory Control

 Improvement in costumers relationship because of the timely delivery of goods and

service
 Smooth and uninterrupted production and, hence, no stock out
 Efficient utilization of working capital. Helps in minimizing loss due to deterioration,
obsolescence damage and pilferage
 Economy in purchasing
 Eliminates the possibility of duplicate ordering

Techniques of Inventory Control

ABC Analysis

 The classification of existing inventory is based on annual consumption and the

annual value of the items.
 It carried out by drawing a graph based on the cumulative number of items and
cumulative usage of consumption cost.

ABC Classification

A-Item: Very tight control, the items being of high value. The control need to be
exercised at higher level of authority

B-Item: Moderate control, the items being of moderate value. The control need to be
exercised at middle level of authority

C-Item: The items being low value, the control can be exercised at gross root level of
authority by respective user department managers

HML Analysis
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The classification of existing inventory is based on unit price of the items. They are
classified as high price, medium price and low cost items.

VED Analysis

The classification of existing inventory is based on criticality of the items. They are
classified as vital, essential and desirable items.

FSN Analysis

The classification of existing inventory is based consumption of the items. They are
classified as fast moving, slow moving and non-moving items.

SDE Analysis

The classification of existing inventory is based on the items.

GOLF Analysis

The classification of existing inventory is based sources of the items. They are classified as
Government supply ,ordinarily available, local availability and foreign source of supply items

SOS Analysis

The classification of existing inventory is based nature of supply of items. They are
classified as seasonal and off-seasonal items.

Inventory Model

Deals with idle resources like men, machines, money and materials. These models are
concerned with two decisions: HOW MUCH TO ORDER and WHEN TO ORDER so as to
minimize the total cost. Economic order is calculated by balancing the two costs.

Economic order quantity can be determined by two methods:

 26

1. Tabulation Method – data presentation which clear and attractive manner that easily
understood and analyzed.
 Textual presentation –reading the data
 Tabular presentation – present a chart of data that many variables. Function
by using computer program have been developed employing this algorithm.
 Diagram presentation - tool for scheduling activities in a project plan. Using
boxes refers to a node of activities.

2. Algebraic Method – used to solve a pair of linear equations with two variables.
Includes substitution, elimination and graphing.

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Forum / Discussion

Let’s Check

Activity 1

A. TRUE B. FALSE

1. The B-item: Very tight control, the items being of high value.

2. The HML analysis, the classification of existing inventory is based on unit price of the items.

3. The VED analysis, the classification of existing inventory is based consumption of the items.

4. The FSN analysis, the classification of existing inventory is based on the items.

5. The CSR policies are based on the idea that “the polluter pays”.
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6. The second phase of facilities planning is assessing status.

7. A typical manufacturing plant has number of diverse activities interacting with each other.

8. Building, dams, bridge and roads are sample of fixed position layout.

9. Service which employ process layout comprise hospital, bank, auto repair, libraries and
universities.

10. Offices are designed to be distasteful and to reflect the organization’s approach to business
dealing.

Let’s Analyze

Activity 2

1. What are inventory costs?

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2. What are the objectives of inventory management system?

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In a Nutshell

Activity 3

Explain the nature and importance of inventory management system.

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Second Examination Week 4-5 Coverage