Latest Material Manager Interview Preparation Guide

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An order quantity is the amount of goods that an order requests be shipped to the store.

When conducting a physical inventory the classification, location and number in stock of a good should be recorded.

Yes, through the use of forecasts inventory levels can be set to meet the demands while keeping levels as low as possible.

Procurement Process starts with gathering requirements, then creating a purchase requisition and then we create a formal document that has to be sent to vendor i.e. purchase order. After this goods will be supplied by vendor and goods receipt is done along with invoice verification. Then vendor is paid for supplied goods and services.

Lead time is the period of time from which a order for goods is placed until it is received by the store. Lead time is an important consideration for determining when orders should be placed.

Demand is the quantity that customers are willing to buy. Demand can be found through forecasting and is needed to find the EOQ level.

There are two types of forecasting qualitative and quantitative. Qualitative uses personal opinions to determine forecasts. Quantitative uses numerical data and statistical modeling to determine forecasts.

Forecasting is the process of estimating the future demand of a product.

A batch is a collection of similar items from your stock that have the same characteristics. For example, all food items produced on a particular day belong to one batch.
Batches are searched using the standard facility (match code, key F4) based on the batch names or other properties that distinguish them from others.

A good forecast model will have reasonable costs. the accuracy of its forecasts will allow good decision making. The model will have ample data available for its use and a relevant time span. The model finally will have a low interference level.

The purchasing view consists of RFQ / Quotation, Purchase Requisition (PR), Purchase Order (PO), Master Data that has several fields like info record, source list, conditions, vendors etc. and finally Outline Agreements.

When conducting a physical inventory the classification, location and number in stock of a good should be recorded.

RFQ is request for quotation and it is a form of invitation that is sent to vendors to submit quotation indicating pricing and their terms and conditions while quotation is a reply by a vendor in response to request for quotation.

Times for reordering goods vary dependent on the control system you use and its lead time. In fixed order quantities reorders should be placed when the safety stock is reached. In fixed period systems the reordering is done at set time periods. In just in time systems reordering is based on matching the demand with supply. For just in time a close watch on inventory levels is needed so that reorders are placed before goods are out of stock.

Goods receipt and goods issue will cause change in stock as goods receipt will increase warehouse stock and goods issue will decrease warehouse stock.

By following your inventory policy you should be able to realize important advantages in inventory control. The first is reduced costs for inventories, along with reduced amounts of inventory. Theft and shrinkage should also be reduced if inventory policy is followed. The final benefit will be increased profits for the store.

Materials with some common attributes are grouped together and they are assigned to a material type. This will differentiate materials and allow organization to manage different materials in systematic manner in accordance to company's requirement.

Special stocks available are consignment stocks (from vendor), subcontracting stocks (to sun-contractor), project stocks, pipeline materials, sales order stocks, stock transfer and third party.

Yes, a discount will cause the basic EOQ model to fail. To use a discount in determine a EOQ you must use the EOQ model with quantity discounts.

Yes, material and vendor data is available at all levels as it is normally created for company and it is valid for the levels below company.

Stock within plants is transferred with the help of stock transport order. One plant order the goods internally from another plant(receiving plant/issuing plant) with the help of stock transport order.

Release procedure means approval of documents like purchase orders and purchase requisition manually by the criteria defined in the configuration.

The EOQ formula is the square root of 2 times demand times order completion cost divided by carrying cost. The mathematical formula is square root of 2DS/C.

Yes, material and vendor data is available at all levels as it is normally created for company and it is valid for the levels below company.

A inventory should be taken at least once a year. If items are perishable, seasonal or highly demanded a inventory should be taken more often.