Objectives of Material Management


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Primary objective 

  • low prices- to be lowest – includes transportation: enhances profit
  • high inventory turnover- value of inventories to be low in relation to sales. reduces storage costs
  • low cost acquisition and possession- reduced handling and storage costs.
  • continuity of supply- alternative sources, , captive suppliers, flexible suppliers
  • low payroll costs- low operating costs of material management personnel
  • favorable supplier relations- supplier development

Secondary objectives of materials management

New materials and products- working closely with design and research departments for development of new materials and products

Economic make-buy- coordinating and assisting other departments in make-buy decisions

Standardization- coordinating with design departments in reducing no. of items.

Product improvement- contribution towards product improvement by giving appropriate inputs and assisting design department.

Interdepartmental harmony- success of materials management department depends on the success of other departments. Hence relations are to be harmonious

Forecasts- forecasts in terms of prices, availability and general market conditions are to be regularly monitored towards taking important business decisions.


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