Internal Assessments

Program – MBA
Subject - Material Management

Assessment Type – Internal Assessment (Subjective

Assignment)

Total Marks - 100

Guidelines:

 The response sheet should be in word format which should be uploaded in

the learning management system
 A plagiarism check should be done by student through plagiarism tool
provided in the learning management system
 Permissible plagiarized limit is 10%. Response sheet found with plagiarized
content above 10% would not be evaluated for the said assessment.
 The said assignment is for 100 marks with 5 questions each. (20 marks per
questions)
 Passing criteria is 50% for every assignment.

Questions:

1. What are the problems of Material Management?

2. What are the methods of vendor rating?
3. What are the objectives of storekeeping?
4. What are the three examples of material handling activities?
5. What is two BIN technique?
1. What are the problems of Material Management?

Material management, also known as inventory management, can face several

challenges. Some common problems include:

1. Overstocking or Understocking: Finding the right balance between having

enough inventory to meet customer demand and avoiding excess stock is a
constant challenge. Overstocking ties up capital and storage space, while
understocking can lead to stock outs and customer dissatisfaction.

2. Inaccurate Demand Forecasting: Accurate demand forecasting is crucial for

effective material management. However, forecasting errors can occur due to
factors such as changing customer preferences, market fluctuations, or
inaccurate data. These errors can lead to inefficient inventory levels and
increased costs.

3. Supply Chain Disruptions: Material management relies on a smooth and

reliable supply chain. Disruptions such as delays in deliveries, supplier issues,
natural disasters, or geopolitical events can impact the availability of materials
and disrupt production schedules.

4. Poor Supplier Performance: Inefficient or unreliable suppliers can cause

problems in material management. Issues such as late deliveries, poor quality,
or inconsistent supply can lead to production delays, increased costs, and
customer dissatisfaction.

5. Lack of Visibility and Tracking: Without proper systems and processes in

place, it can be challenging to have real-time visibility into inventory levels,
locations, and movements. This lack of visibility can result in inefficiencies, stock
outs, or excess inventory.

6. Inefficient Warehouse Management: Poor layout, inadequate storage

systems, or inefficient picking and packing processes can lead to wasted time,
increased labor costs, and errors in material management.

Addressing these problems requires implementing effective inventory

management systems, improving demand forecasting techniques, building
strong supplier relationships, investing in supply chain resilience, and
optimizing warehouse operations

2. What are the methods of vendor rating?

Vendor rating, also known as supplier rating or supplier evaluation, is a process
used to assess and evaluate the performance and capabilities of vendors or
suppliers. There are several methods commonly used for vendor rating. Here
are a few examples:

1. Performance Metrics: This method involves defining key performance

indicators (KPIs) that are relevant to the vendor's performance. These metrics
can include on-time delivery, quality of products or services, responsiveness,
cost-effectiveness, and customer satisfaction. Vendors are then rated based on
their performance against these metrics.

2. Scorecards: Scorecards provide a structured approach to vendor rating by

assigning weights to different performance criteria. Each criterion is evaluated
and given a score, and the scores are then aggregated to calculate an overall
rating for the vendor. This method allows for a more comprehensive evaluation
of vendors based on multiple factors.

3. Qualitative Assessments: In addition to quantitative metrics, qualitative

assessments can be used to evaluate vendors. This can involve conducting
interviews or surveys with key stakeholders to gather feedback on the vendor's
communication, relationship management, flexibility, and other subjective
factors.

4. Financial Analysis: Financial analysis can be used to assess the financial

stability and viability of vendors. This includes evaluating their financial
statements, creditworthiness, and ability to meet contractual obligations.

5. Site Visits and Audits: Site visits and audits provide an opportunity to assess
vendors' facilities, processes, and quality control measures firsthand. This
method allows for a more in-depth evaluation of vendors' capabilities and
compliance with standards.

It's important to note that the specific methods used for vendor rating may vary
depending on the industry, organization, and specific requirements.
Organizations often develop their own customized vendor rating systems based
on their unique needs and priorities

3. What are the objectives of storekeeping?

The objectives of storekeeping in the context of operational research can vary
depending on the specific organization and industry. However, some common
objectives include:

1. Inventory Management: Storekeeping aims to effectively manage and control

inventory levels to ensure that the right quantity of materials or products is
available when needed. This involves monitoring stock levels, tracking usage
patterns, and implementing strategies to minimize stockouts or excess
inventory.

2. Cost Control: Storekeeping plays a crucial role in cost control by optimizing

inventory levels, reducing carrying costs, and minimizing losses due to theft,
damage, or obsolescence. Efficient storekeeping practices help in achieving cost
savings and improving overall profitability.

3. Efficient Material Handling: The objective of storekeeping is to ensure

efficient and organized handling of materials or products within the store. This
includes proper storage, labeling, and retrieval systems to facilitate easy access
and minimize handling time.

4. Accurate Record-Keeping: Storekeeping involves maintaining accurate

records of inventory transactions, including receipts, issues, and returns. The
objective is to have reliable data for inventory control, financial reporting, and
decision-making processes.

5. Timely Replenishment: Storekeeping aims to ensure timely replenishment of

inventory to meet demand and avoid disruptions in operations. This involves
monitoring lead times, forecasting demand, and coordinating with suppliers to
maintain a smooth flow of materials or products.

6. Compliance and Safety: Storekeeping objectives also include compliance with

relevant regulations and safety standards. This involves proper handling,
storage, and disposal of hazardous materials, as well as adherence to legal
requirements related to inventory management.

These objectives collectively contribute to efficient operations, cost control,

customer satisfaction, and overall organizational effectiveness.

4. What are the three examples of material handling activities?

Material handling activities refer to the movement, storage, and control of
materials within a facility or supply chain. Here are three examples of material
handling activities:

1. Transportation: This involves the movement of materials from one location to

another. It can include activities such as loading and unloading trucks,
transporting goods between warehouses or production areas, or delivering
products to customers.

2. Storage and Warehousing: This activity involves the proper storage and
organization of materials within a facility. It includes activities such as receiving
and inspecting incoming materials, inventory management, shelving or
palletizing goods, and optimizing storage space.

3. Order Picking: This activity involves selecting and gathering the required
items from storage to fulfill customer orders. It can include activities such as
locating items in a warehouse, picking them from shelves or racks, and
preparing them for shipment.

These are just a few examples of material handling activities, and there can be
various other tasks involved depending on the specific industry and operational
requirements. Effective material handling is crucial for optimizing efficiency,
reducing costs, and ensuring smooth operations within a facility or supply chain.

5. What is two BIN technique?

The two-bin technique is a method used in inventory management to ensure
efficient replenishment of stock. It is commonly used for managing low-cost,
high-volume items or consumables.

In the two-bin technique, two bins or containers are used to store the inventory.
The first bin, often referred to as the "active bin," contains the quantity of items
currently in use or readily available for use. The second bin, known as the
"reserve bin," holds a predetermined quantity of items as a backup or reserve
stock.

When the active bin is emptied or reaches a predetermined reorder point, it

serves as a signal to replenish the stock. At this point, the reserve bin is used to
meet the immediate demand, while a new order is placed to refill the reserve
bin. This ensures a continuous supply of items without causing stockouts or
disruptions in operations.

The two-bin technique helps in managing inventory levels effectively by

providing a visual indicator of when replenishment is needed. It simplifies the
replenishment process and reduces the chances of stockouts or overstocking.
Additionally, it can help in identifying consumption patterns and optimizing
inventory levels based on actual usage.

Overall, the two-bin technique is a practical and straightforward approach to

inventory management, particularly for items with predictable consumption
patterns and relatively stable demand.