Introduction to Materials Management

by Arnold, J.R. Tony; Chapman, Stephen N.; Clive, Lloyd M.

• ISBN13: 9780131128743
• ISBN10: 0131128744
• Edition: 6th
• Format: Hardcover
• Copyright: 2008-01-01
• Publisher: Prentice Hall

Summary

For courses in Materials Management, Production and Inventory Control, and Logistics taught in business and industrial technology departments of community colleges and universities. This is the only text listed in the APICSThe Educational Society for Resource Management CPIM Exam Content Manual as the text reference for the Basics of Supply Chain Management (BSCM) CPIM certification examination. Written in a simple and user-friendly style, it covers all the basics of supply chain management and production and inventory control.

Table of Contents

Introduction to Materials Management	1	(18)
Introduction	1	(1)
Operating Environment	2	(3)
The Supply Chain Concept	5	(5)
What Is Materials Management?	10	(4)
Supply Chain Metrics	14	(2)
Summary	16	(1)
Key Terms	16	(1)
Questions	17	(1)
Problems	17	(2)
Production Planning System	19	(29)
Introduction	19	(1)
Manufacturing Planning and Control System	20	(5)
Sales and Operations Planning (SOP)	25	(2)
Manufacturing Resource Planning (MRP II)	27	(1)
Enterprise Resource Planning (ERP)	28	(1)
Making the Production Plan	29	(12)
Summary	41	(1)
Key Terms	41	(1)
Questions	42	(1)
Problems	43	(5)
Master Scheduling	48	(26)
Introduction	48	(1)
Relationship to Production Plan	49	(3)
Developing a Master Production Schedule	52	(6)
Production Planning, Master Scheduling, and Sales	58	(8)
Summary	66	(1)
Key Terms	66	(1)
Questions	66	(1)
Problems	67	(7)
Material Requirements Planning	74	(46)
Introduction	74	(4)
Bills of Material	78	(8)
Material Requirements Planning Process	86	(13)
Using the Material Requirements Plan	99	(5)
Summary	104	(1)
Key Terms	104	(1)
Questions	105	(1)
Problems	106	(14)
Capacity Management	120	(24)
Introduction	120	(1)
Definition of Capacity	120	(2)
Capacity Planning	122	(1)
Capacity Requirements Planning (CRP)	123	(2)
Capacity Available	125	(5)
Capacity Required (Load)	130	(3)
Scheduling Orders	133	(3)
Making the Plan	136	(1)
Summary	137	(1)
Key Terms	138	(1)
Questions	139	(1)
Problems	139	(5)
Production Activity Control	144	(35)
Introduction	144	(4)
Data Requirements	148	(2)
Order Preparation	150	(1)
Scheduling	150	(7)
Load Leveling	157	(1)
Scheduling Bottlenecks	158	(3)
Theory of Constraints and Drum-Buffer-Rope	161	(2)
Implementation	163	(1)
Control	164	(7)
Production Reporting	171	(1)
Summary	171	(1)
Key Terms	172	(1)
Questions	172	(1)
Problems	173	(6)
Purchasing	179	(20)
Introduction	179	(4)
Establishing Specifications	183	(2)
Functional Specification Description	185	(3)
Selecting Suppliers	188	(3)
Price Determination	191	(2)
Impact of Material Requirements Planning on Purchasing	193	(2)
Some Organizational Implications of Supply Chain Management	195	(1)
Key Terms	196	(1)
Questions	197	(1)
Problems	197	(2)
Forecasting	199	(34)
Introduction	199	(1)
Demand Management	200	(1)
Demand Forecasting	201	(1)
Characteristics of Demand	201	(3)
Principles of Forecasting	204	(1)
Collection and Preparation of Data	204	(1)
Forecasting Techniques	205	(2)
Some Important Intrinsic Techniques	207	(4)
Seasonality	211	(5)
Tracking the Forecast	216	(7)
Summary	223	(1)
Key Terms	224	(1)
Questions	224	(1)
Problems	224	(9)
Inventory Fundamentals	233	(27)
Introduction	233	(1)
Aggregate Inventory Management	234	(1)
Item Inventory Management	234	(1)
Inventory and the Flow of Material	235	(1)
Supply and Demand Patterns	236	(1)
Functions of Inventories	236	(2)
Objectives of Inventory Management	238	(2)
Inventory Costs	240	(4)
Financial Statements and Inventory	244	(5)
ABC Inventory Control	249	(4)
Summary	253	(1)
Key Terms	254	(1)
Questions	254	(1)
Problems	255	(5)
Order Quantities	260	(20)
Introduction	260	(1)
Economic-Order Quantity (EOQ)	261	(6)
Variations of the EOQ Model	267	(1)
Quantity Discounts	268	(1)
Use of EOQ When Costs Are Not Known	269	(2)
Period-Order Quantity (POQ)	271	(2)
Summary	273	(1)
Key Terms	273	(1)
Questions	274	(1)
Problems	274	(6)
Independent Demand Ordering Systems	280	(31)
Introduction	280	(1)
Order Point System	281	(2)
Determining Safety Stock	283	(7)
Determining Service Levels	290	(2)
Different Forecast and Lead-Time Intervals	292	(2)
Determining When the Order Point Is Reached	294	(2)
Periodic Review System	296	(2)
Distribution Inventory	298	(4)
Key Terms	302	(1)
Questions	302	(1)
Problems	303	(8)
Physical Inventory and Warehouse Management	311	(21)
Introduction	311	(1)
Warehousing Management	311	(7)
Physical Control and Security	318	(1)
Inventory Record Accuracy	319	(8)
Key Terms	327	(1)
Questions	327	(1)
Problems	328	(4)
Physical Distribution	332	(31)
Introduction	332	(3)
Physical Distribution System	335	(2)
Interfaces	337	(1)
Transportation	338	(3)
Legal Types of Carriage	341	(1)
Transportation Cost Elements	342	(4)
Warehousing	346	(7)
Packaging	353	(1)
Materials Handling	354	(2)
Multi-Warehouse Systems	356	(3)
Key Terms	359	(1)
Questions	359	(1)
Problems	360	(3)
Products and Processes	363	(34)
Introduction	363	(1)
Need for New Products	363	(2)
Product Development Principles	365	(2)
Product Specification and Design	367	(2)
Process Design	369	(1)
Factors Influencing Process Design	370	(2)
Processing Equipment	372	(1)
Process Systems	373	(2)
Selecting the Process	375	(4)
Continuous Process Improvement (CPI)	379	(12)
Key Terms	391	(1)
Questions	391	(2)
Problems	393	(4)
Just-in-Time Manufacturing	397	(32)
Introduction	397	(1)
Just-in-Time Philosophy	398	(1)
Waste	399	(3)
Just-in-Time Environment	402	(9)
Manufacturing Planning and Control in a JIT Environment	411	(11)
Lean Production	422	(1)
Which to Choose---MRP (ERP), Kanban, or Theory of Constraints?	423	(2)
Summary	425	(1)
Key Terms	426	(1)
Questions	426	(1)
Problems	427	(2)
Total Quality Management	429	(29)
What Is Quality?	429	(2)
Total Quality Management (TQM)	431	(4)
Quality Cost Concepts	435	(1)
Variation as a Way of Life	436	(4)
Process Capability	440	(4)
Process Control	444	(3)
Sample Inspection	447	(2)
ISO 9000	449	(2)
Benchmarking	451	(3)
JIT, TQM, and MRP II	454	(1)
Key Terms	455	(1)
Questions	455	(1)
Problems	456	(2)
Readings	458	(5)
Index	463

Excerpts

Introduction to Materials Managementis an introductory text written for students in community colleges and universities. It is used in technical programs, such as industrial engineering and manufacturing engineering; in business programs; and by those already in industry, whether or not they are working in materials management. This text has been widely adopted by colleges and universities not only in North America, but also in other parts of the world. APICS--The Educational Society for Resource Management recommends this text as the reference for certification preparation for various CPIM examinations. In addition, the text is used by production and inventory control societies in other countries, including South Africa, Australia, New Zealand, Germany, France, and Brazil, and by consultants in presenting in-house courses to their customers. Introduction to Materials Managementcovers all the basics of supply chain management, manufacturing planning and control systems, purchasing, and physical distribution. The material, examples, questions, and problems lead the student logically through the text. The writing style is simple and user-friendly--both instructors and students who have used the book attest to this. In the fifth edition, we have added content in the following areas: Supply chain metrics coverage in Chapter 1, Introduction to Materials Management. New ERP coverage in Chapter 2, Production Planning System. New "Vendor-managed inventory" and "Organizational implications of supply chain management" sections in Chapter 7, Purchasing. Production lead time/demand lead time ratio in Chapter 8, Forecasting. New "Methods of evaluating inventory" section in Chapter 9, Inventory Fundamentals. Performance metrics, Lean production, and Poke-yoke in Chapter 15, Just-in-Time Manufacturing. New "Other quality control tools" section in Chapter 16, Total Quality Management. Coverage of first in, first out (FIFO); last in, first out (LIFO); average cost; and standard cost added to Chapter 9, Inventory Fundamentals. In addition, we have modified figures in many of the end-of-chapter problems to provide adopters with a new set of problems. Also, the index has been updated to include all key terms. Features carried over from the fourth edition include: Margin icons note key concepts. Key terms listed at the end of each chapter with chapter page cross-references. Example problems within the chapters. Chapter summaries. Questions and problems at the end of each chapter. Chapter references to case studies inIntroduction to Materials Management Casebook. THE CASEBOOK For the fifth edition, we developed theIntroduction to Materials Management Casebook,authored by Arnold, Chapman, and Lloyd M. Clive. The casebook takes the student beyond the textbook problems by presenting a situation followed by related analysis questions. Most text chapters have cases associated with them, as noted in the table that follows the Table of Contents, and some cases bridge several chapters. Cases vary in level of difficulty, with the more challenging cases requiring students to think about the management issues involved in their decisions on the job. Reviewers noted that the casebook has added overall rigor to this text. APPROACH AND ORGANIZATION Materials management means different things to different people. In this textbook, materials management includes all activities in the flow of materials from the supplier to the consumer. Such activities include physical supply, operations planning and control, and physical distribution. Other terms sometimes used arebusiness logisticsandsupply chain management.Often, the emphasis in business logistics is on transportation and distribution systems with little concern for what occu