How might the raw materials budget help the production manager?
Raw materials are part of the foundation for the cost of a finished product. Since the production manager is responsible for handling the details needed to make an idea a finished product, he or she would use the raw materials budget to determine what materials would be most effective while maintaining the specifications on the original idea. For example, an engineer may build a new type of capacitor. The production manager for that company can use the raw materials budget to determine what materials can be used to produce the capacitor under the overall budget. A material like copper may be the best conductor for the job. After looking at the raw materials budget, and market cost for copper, a production manager might decide that aluminum is a better choice. As a purchasing manager, I use the raw materials guide on the TTI, Inc. MarketEye Research Center. It helps me stay under budget. Hope this helps.
