APICS Terms 1/2
demand chain
-1) A demand chain is composed of the enterprises that sell a business's goods or services - 2) Supply chain as seen from the viewpoint of the customer, the entity who chooses among competing products and services and thus controls the demand
acceptance number
-1) A number used in acceptance sampling as a cutoff at which the lot will be accepted or rejected - For example, if x or more units are bad within the sample, the lot will be rejected - 2) The value of the test statistic that divides all possible values into acceptance and rejection regions
dispatcher
-1) A production control person whose primary function is dispatching - 2) A transportation workerwho sends out and tracks cars, buses, trucks, railcars, and othervehicles
global positioning system (gps)
-A system that uses satellites to locate an object's position
frequency distribution
-A table that indicates the frequency with which data falls into each of any number of subdivisions of the variable - The subdivisions are usually called classes, frequency of repair
duty
-A tax levied by a government on the importation, exportation, or use and consumption of goods
clean technology
-A technical measure taken to reduce or eliminateat its sourcethe production of any nuisance, pollution, orwaste, and to help save raw materials, natural resources, and energy
days outstanding
-A term used to imply the amount of an asset or liability measured in days of sales - For example, accounts payable days are the typical number of days that a firm delays payment of invoices to its suppliers
direct deduct inventory transaction processing
-A method of inventory bookkeeping that decreases the book (computer) inventory of an item as material is issued from stock, and increases the book inventory as transactions are processed for each item - The key conceptisthatthebookrecordisupdatedcoincidentally with the movement of material out of or into stock - As a result, the book record is a representation of what is physically in stock - Syn: discrete issue
churn reduction
-Losing fewer customers to the competition
batch picking
-A method of picking orders in which order requirements are aggregated by product across orders to reduce movement to and from product locations - The aggregated quantities of each product are then transported to a common area where the individual orders are constructed - See: discrete order picking, order picking, zone picking
discrete order picking
-A method of picking orders in which the items on one order are picked before the next order is picked - See: batch picking, order picking, zone picking -Whitin algorithm
fixed location storage
-A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse - Although more space is needed to store parts than in a randomlocation storage system, fixed locations become familiar, and therefore a locator file may not be needed - See: randomlocation storage
critical value analysis
-A modified ABC analysis where a subjective metric of the criticality of an item is assigned to each item
breeder bill of material
-A bill of material that recognizes and plans for the availability and usage of byproducts in the manufacturing process - The breeder bill allows for complete byproduct MRP and product/byproduct costing
debenture
-A bond that is backed by the general credit of the issuingfirm
business process management (bpm)
-A business discipline orfunction that uses business practices, techniques, and methods to create and improve business processes - BPM is a holistic approach to the use of appropriate processrelated business disciplines to gain business performance improvements across the enterprise or supply chain - It promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology - Most process improvement disciplines or activities can be considered as BPM
distributor
-A business that does not manufacture its own products but instead purchases and resells these products - Such a business usually maintains a finished goods inventory - Syn: wholesaler
contract carrier
-A carrier that does not serve the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract
buyer code
-A code used to identify the purchasing person responsible for a given item or purchase order
inventory optimization software
-A computer application that can find optimal inventory strategies and policies related to customer service and return on investment over several echelons of a supply chain
knowledge based system
-A computer program that employs knowledge of the structure of relations and reasoning rules to solve problems by generating new knowledge from the relationships about the subject
product structure record
-A computer record definingthe relationship of one component to its immediate parent and containingfields for quantity required, engineering effectivity, scrap factor, application selection switches, and so forth
electronic funds transfer (eft)
-A computerized system that processes financial transactions and information about these transactions or performs the exchange of value between two parties
graphical user interface (gui)
-A connection between the computer and the user employing a mouse and icons so that the user makes selections by pointing at icons and clickingthe mouse
firm fixed price contract
-A contract in which the seller is paid a set price without regard to costs - Syn: fixedprice contract
appraisal
-1) An evaluation of employee performance - 2) In total quality management, the formal evaluation and audit of quality
capital recovery
-1) Charging periodically to operations amounts that will ultimately equal the amount of capital expenditure - See: amortization, depletion, depreciation - 2) The replacement of the original cost of an asset plus interest - 3) The process of regaining the net investment in a project by means of revenue in excess of the cost from the project - (Usually implies amortization of principal plus interest on the diminishing unrecovered balance -)
cumulative sum control chart
-A control chart on which the plotted value is the cumulative sum of deviations of successive samples from a target value - The ordinate of each plotted point represents the algebraic sum of the previous ordinate and the most recent deviations from the target
job costing
-A cost accounting system in which costs are assigned to specific jobs - This system can be used with either actual or standard costs in the manufacturing of distinguishable units or lots of products - Syn: job order costing
activity based cost accounting
-A cost accounting system that accumulates costs based on activities performed and then uses cost drivers to allocate these costs to products or other bases such as customers, markets, or projects - It attempts to allocate overhead costs on a more realistic basis than by using direct labor or machine hours
avoidable cost
-A cost associated with an activity that would not be incurred if the activity was not performed (e -g -, telephone cost associated with vendor support)
lead time managed part
-A critical nonstocked part that will have special attention paid to it over its execution horizon - Typically, these items are critical, long lead time components that do not have sufficient volume to justify stocking
coreteam
-A crossfunctional team of specialists formed to manage new product introduction - See: crossfunctional team
artificial intelligence (al)
-1) Computer programs that can learn and reason in a mannersimilarto humans - The problem is defined in terms of states and operators to generate a search space that is examined for the best solution - In contrast, conventional programming collects and processes data by algorithm or fixed step by step procedures - 2) An area in computer science that attempts to develop Al computer programs
breakbulk
-1) Dividing truckloads, railcars, or containers of homogeneous items into smaller, more appropriate quantities for use - 2) A distribution center that specializes in breakbulk activities - (3) Unitized cargo in bales, boxes, or crates that is placed directly in a ship's holds ratherthan in containers
data normalization
-A database maintenance term used in the context of relational databases, which helps to minimize the duplication of information or safeguard the database against certain types of logical or structural data anomalies - It is often used when merging data from one or more databases
activity
-1) In activity based cost accounting, a task or activity, performed by or at a resource, required for production of the organization's output of goods and services - A resource may be a person, machine, or facility - Activities are grouped into pools by type of activity and allocated to products - 2) In project management, an element of work on a project - It usually has an anticipated duration, anticipated cost, and expected resource requirements - Sometimes major activity is used for larger bodies of work
control decision
-A decision about the planning or controlling of daily operations
depreciation of a currency
-A decrease in the buying power of a country's currency in terms of other countries' goods and services
city driver
-A delivery person who drives a local route as opposed to longhaul route
conveyor
-A device following a fixed route that has the capability of moving material between points in a facility - This device commonly is used when there is a high volume of flow alongthe route
jig
-A device that holds a piece of work in a desired position and guides the tool or tools that perform the necessary operations - See: fixture
fixture
-A device to hold and locate a work piece during inspection or production operations - See: jig
firewall
-A device used to control access to a company's data from the internet or other outside sources
due date rule
-A dispatching rule that directs the sequencing of jobs by the earliest due date
first come first serve rule
-A dispatching rule under which the jobs are sequenced by their arrival times - See: firstin, firstout
funds flow statement
-A financial statement showing the flow of cash and its timing into and out of an organization or project - Syn: cash flow statement, statement of cash flows
income statement
-A financial statement showing the net income for a business over a given period of time - See: balance sheet, funds flow statement
constraint oriented finite loading
-A finite loading technique that plans orders around bottleneck work centers - The objective is to maximize total production throughput - Orders in small lot sizes aggregate into large lot sizes at the constraint and then load forward - Prior operations are then backwardscheduled, and downstream operations are forwardscheduled - See: drum buffer rope, order oriented finite loading
environmentally responsible business
-A firm that operates in such a way as to minimize detrimental impacts on society - See: green manufacturing, green supply chain
initial public offering (ipo)
-A firm's first sale of common stock
imposed date
-A fixed date given to an activity, usually start no earlier than or finish no later than -
channel
-1) In queuing theory, a line for waiting - 2) In distribution, a route from raw materials through consumption - See: distribution channel, marketing channel
accessibility
-1) In transportation, the ease with which a carrier provides service from one point to another - 2) In warehousing, the ability to get to and within the point of storage easily
days of supply
-1) Inventoryonhand metric converted from units to how long the unitswill last - For example, if there are 2,000 units on hand and the company is using 200 per day, than there are 10 days of supply - 2) A financial measure of the value of all inventory in the supply chain divided by the average daily cost of goods sold rate
aggregate reporting
-1) Reporting of process hours in general, allowing the system to assign the actual hours to specific products run duringthe period based on standards - 2) Also known as gang reporting or the reporting of total labor hours
intermodal transport
-1) Shipments moved by different types of equipment combining the best features of each mode - 2) The use of two or more different carrier modes in the through movement of a shipment
cost estimation
-1) Specification of the relationship between cost and the underlying cost drivers - 2) In project management, creating an approximation of the resources and associated costs needed to complete a project
data element
-A group of characters that defines an item at a basic level - Syn: data field
consortium
-A group of companies that work together to jointly produce a product, service, or project
assured source of supply
-A guaranteed supply source generally created by a contract
customer facing
-A hardware or software product, technology, or any thing or person that a business's customer deals with directly
functional organization
-A hierarchical organization in which each individual has one clear superior and staff areas are well defined
datecode
-A label on products with the date of production - In food industries, it is often an integral part of the lot number
crew size standard
-A labor estimate of the number of workers necessary to complete the required output for a given shift
distribution center
-A location used to store inventory - Decisions driving warehouse management include site selection, number of facilities in the system, layout, and methods of receiving, storing, and retrieving goods
aggregate production plan (app)
-A longrange plan that is used to determine timing and quantity of total future production for a family of products - Syn: longterm production plan
customer supplier partnership
-A longterm relationship between a buyer and a supplier characterized by teamwork and mutual confidence - The supplier is considered an extension of the buyer's organization - The partnership is based on several commitments - The buyer provides longterm contracts and uses fewer suppliers - The supplier implements quality assurance processes so that incoming inspection can be minimized - The supplier also helps the buyer reduce costs and improve product and process designs - Syn: customer partnership - See: outpartnering
industry analysis
-A major study of an industry its major competitors, customers, and suppliers and the focus and driving forces within that industry
gembawalk
-A management approach in which managers observe the actual work being carried out in order to understand it better, coach, guide, and follow up on corrective actions with the line manager
green belt
-A manager or team member who has been trained in six sigma improvement methods and will have fulltime responsibilities for process and quality improvement
cell
-A manufacturing or service unit consisting of a number of workstations and the materials transport mechanisms and storage buffers that interconnect them
human factors engineering
-A merging of those branches of engineering and the behavioral sciences that concern themselves principally with the human component in the design and operation of humanmachine systems - Human factors engineering is based on afundamental knowledge and study of human physical and mental abilities and emotional characteristics
dual sourcing
-A method for sourcing requirements by using a few suppliers for the same products or services - See: multisourcing, multiple sourcing, single sourcing
bar coding
-A method of encoding data using bar codes for fast and accurate readability
any quantity rate
-A situation in which no quantity discount is available for large shipments - AOAAbbreviation for activityonarrow network - AONAbbreviation for activityonnode network - AOQAbbreviation for average outgoing quality
eurocurrency
-Money that is deposited outside the country that issued it (outside the issuing country's control)
hybrid edi
-A situation in which only one trading partner is EDIenabled and the other continues to use paper and fax - Usually the EDIenabled partner has its electronic documents converted to fax
gray box design
-A situation in which the supplier and client jointly design a product or service - See: black box design
container on a flatcar (cofc)
-A specialized form of containerization in which rail, motor, and sea transport coordinate
acceptable sampling plan
-A specific plan that indicates the sampling sizes and the associated acceptance or nonacceptance criteria to be used
flowrack
-A storage rack using metal shelves equipped with wheels or rollers allowing product to flow from the back to the front of the rack to make the product more accessible for order picking
functional strategy
-A strategy that is built from the business strategy for various business functions such as finance, marketing, and production - See: strategic planning
annuity
-A stream of fixed payments for a stipulated time—yearly or at other intervals
internal supply chain
-A structure for sharing information within a firm and creating an atmosphere for cooperation between functions to strengthen the firm
cross selling
-Occurs when customers buy additional products orservices afterthe initial purchase
diseconomies of scale
-Occurs when more outputs are required than the efficient quantity the facility is designed to produce - Causes an increase in unit cost
bin transfer
-An inventory transaction to move a quantity from one valid location (bin) to another valid location (bin)
cumulative trauma disorder
-An occupational injury believed to be caused by repetitive motions such as typing or twisting
control phase
-One of the six sigma phases of quality - Process performance is observed, often with control charts, for steady results
codes (epcs)
-Codes that are used with RFID tags to carry information on the product that will support warranty programs - electronic publishingRepresentation of text and multimedia documents electronically
block control
-Control of the production process in groups, or blocks, of shop orders for products undergoing the same basic processes
inventory costs
-Costs associated with ordering and holding inventory - See: carrying costs, ordering cost, inventory cushionSyn: inventory buffer
certificate of compliance
-A supplier's certification thatthe supplies orservices in question meet specified requirements
current ratio
-Current assets divided by current liabilities
deseasonalized data
-Data from which seasonality has been removed using annual moving averages - deshiA Japanese word meaning student
derived demand
-Demand for component products that arises from the demand for final design products - For example, the demand for steel is derived from the demand for automobiles
booked orders
-Demand that has been confirmed - See: customer order, demand, order penetration point
environmentally sensitive engineering
-Designing with consideration of how a product or its packaging will ultimately be disposed
centralized purchasing
-A system in which all purchasing decisions are made from a corporate purchasing office
direct numerical control (dnc)
-A system in which sets of numerical control machines are connected to a computer, allowing direct control of machines by the computer without use of external storage media
customer coproduction
-A system in which the customer is part of the service delivery process - For example, in grocery stores customers often have the option to use selfcheckout
focus forecasting
-A system that allows the user to simulate the effectiveness of numerous forecasting techniques, enabling selection of the most effective one
lead time scheduling
-Development of a schedule of start and completion times of planned operations for a manufacturing order by calculation of the lead time - The calculation includes the duration of all operations, interoperation times, and order administration times - See: back scheduling, central point scheduling, forward scheduling, probable scheduling - leanSyn: lean production
free alongside ship (fas)
-A term of sale indicating the seller is liable for all changes and risks until the goods sold are delivered to the port on a dock that will be used by the vessel - Title passes to the buyer when the seller has secured a clean dock or ship's receipt of goods
form fit function
-A term used to describe the process of designing a part or product to meet or exceed the performance requirements expected by customers
bundle
-One or more unassembled items shipped together as a set of items
first tier supplier
-One that supplies goods or services directly to a business
internet operations
-Operations performed over the internet encompassing such things as email, telnet, newsgroups, file transfer protocol, and the World Wide Web
advance material request
-Ordering materials before the release of the formal product design - This early release is required because of long lead times
cost based contract
-A type of purchasing contract where the price of goods or services is tied to the cost of key inputs or other economic factors such as interest rates
aggregate inventory management
-Establishing the overall level (dollar value) of inventory desired and implementing controls to achieve this goa
financial forecasting
-Estimating a firm's future financial statements
customer profitability
-Estimating the profit retained on business with a specific customer
capacity cushion
-Extra capacity that is added to a system after capacity for expected demand is calculated - Syn: safety capacity - See: protective capacity
barrier to entry
-Factors that prevent companies from entering into a particular market, such as high initial investment in equipment
authorized deviation
-Permission for a supplier or the plant to manufacture an item that is not in conformance with the applicable drawings or specifications
demand manager
-Person who assists sales and marketing in the development and maintenance of sales forecasts and reconciles volume and mix variations in the forecast
forward integration
-Process of buying or owning elements of the production cycle the channel of distribution forward toward the final customer
commodity buying
-Grouping like parts or materials under one buyer's control for the procurement of all requirements to support production
event based marketing
-Promoting goods or services through specific events
import merchant
-Purchasing agent who buys and takes the title to goods and then resells them
order slotting
-Is the process of entering order into FAS by defining the order's requirements to calculate the consumption of FAS capacity
green scor
-A version ofthe Supply Chain Operations Reference (SCOR) Model that addresses environmental sustainability efforts with best practices, metrics for measuring greening efforts, and processes to deal with waste management
work center, where used
-Records kept of every item prodcued and routed from a work center
general merchandise warehouse
-A warehouse for the storage of goods that require no special handling
abc frequency of access
-A warehouse location that is determined by both a product's ABC classification and by the frequency with which it is removed or replaced
cross docking warehouse
-A warehouse or portion of a warehouse used for cross docking
assortment warehousing
-A warehousing technique that stores the goods close to the customerto ensure short customer lead times
implied warranty
-A warranty imposed on sellers beyond any express agreement in the contract
incentive pay system
-A way to compensate employees based on their job performance
interactive system
-Refers to those computer applications in which a user communicates with a computer program via a system, entering data and receiving responses from the computer - See: interactive computer system
breakdown maintenance
-Remedial maintenance that occurs when equipment fails and must be repaired on an emergency or priority basis - Syn: irregular maintenance, reactive maintenance
alternate operation
-Replacement for a normal step in the manufacturing process - Ant: primary operation
double sampling plan
-A way to control quality by taking one sample and making an accept or reject decision, and, if the decision cannot be made, taking a second sample and making the accept or reject decision by combiningthe results of both samples, double smoothingSyn: secondorder smoothing
brand name
-A word or combination of words used to identify a product and differentiate it from other products the verbal part of a trademark, in contrast to the pictorial mark a trademark word, brand planSyn: market plan
electronic invoice presentment and payment (eipp)
-Accepting and sending invoices and payments over the internet
dashboard
-An easytoread management tool similar to an automobile's dashboard designed to address a wide range of business objectives by combining business intelligence and data integration infrastructure - See: executive dashboard
green logistics
-An effort to minimize the negative environmental impacts of logistics activities in the supply chain to create sustainability for the organization
advance ship notice (asn)
-An electronic data interchange (EDI) notification of shipment of product - advantageSee: competitive advantage
dynamic kanban
-An electronic signal using kanban to create an automatic purchase orderto a supplier or a manufacturing order to a shop - Dynamic kanban is one of the elements of a manufacturing execution system that enables justintime deliveries to production - See: kanban
cellular layout
-An equipment configuration to support cellular manufacturing
event
-An event is an identifiable point in time among a set of related activities - Graphically, an event can
algorithm
-A prescribed set of welldefined rules or processes for solving a problem in a finite number of steps (e -g -, the full statement of the arithmetic procedure for calculating the reorder point)
future value
-A present payment's value at some point in the future valued at a given interest rate
dewey's reflective thinking
-A problemsolving technique with a formal sequence of (1) problem definition, (2) problem analysis, (3) brainstorming solutions, (4) development of proposed solutions, and (5) solution testing and validation
job analysis
-A process of gathering (by observation, interview, or recording systems) significant taskoriented activities and requirements aboutwork required of employees
appreciation of a currency
-An increase in the buying power of a country's currency in terms of other countries' goods and services
expeditor
-A production control person whose primary duty is expediting - expendablesSyn: consumables
dedicated line
-A production line permanently configured to run welldefined parts, one piece at a time, from station to station
chase production method
-A production planning method that maintains a stable inventory level while varying production to meet demand - Companies may combine chase and level production schedule methods - Syn: chase strategy, chasedemand strategy, chase strategy
autonomous work group
-A production team that operates a highly focused segment of the production process to an externally imposed schedule but with little external reporting, supervision, interference, or help
job enrichment
-An increase in the number of tasks that an employee performs and an increase in the control over those tasks - It is associated with the design of jobs and especially the production worker's job - Job enrichment is an extension of job enlargement
cpk
-An index method of the variability of a process - A widely used process capability index - It is expressed as: p mnearer specification unit
cycle counter
-An individual who is assigned to do cycle counting
iso 22301
-An international standard that specifies requirements for setting up and managing an effective business continuity management system
iso 28000
-An international standard that specifies the requirements for a security management system, including those aspects critical to security assurance of the supply chain
independent project
-A project which, whether or not it is accepted, does not eliminate other projects from eligibility - See: contingent project, mutually exclusive project
bid
-A quotation specifically given to a prospective purchaser upon request, usually in competition with othervendors - See: quotation
direct sales
-Sales from the manufacturer to the ultimate consumerwithout goingthrough a distributor or retailer
award audits
-Site visits associated with award programs such as the Malcolm Baldrige National Quality Award or similar statesponsored award programs
hold points
-Stockpoints for semifinished inventory
aftermarket
-A secondary market for parts and accessories used to repair or enhance an item
customer as product
-A service system designed to actually perform the service on the customer, such as in health care or hair salons
failsafe work methods
-Methods of performing operations so that erroneous orfaulty actions cannot be completed - For example, a part without holes in the proper place cannot be removed from a jig a computer system rejects invalid numbers or requires double entry of transaction quantities outside the normal range - Syn: failsafe techniques, mistakeproofing, pokayoke
conflict minerals
-Minerals mined in conditions of armed conflict and human rights abuses, and that are sold or traded by armed groups
deterministic models
-Models where no uncertainty is included (e -g -, inventory models without safety stock considerations)
business process
-A set of logically related tasks or activities performed to achieve a defined business outcome
financial leverage management ratios
-A set of measurements of the degree to which a firm is charge instruments such as debt or preferred stock
check sheet
-A simple datarecording device - The check sheet is designed by the user to facilitate the user's interpretation of the results - The check sheet is one of the seven tools of quality - Check sheets are often confused with data sheets and checklists
dividend yield
-The ratio of dividends per share over stock price
flow time efficiency
-The ratio of theoretical flow time to the actual flow time through a process - FLSAAbbreviation for Fair Labor Standards Act
customer satisfaction
-The results of delivering a good or service that meets customer requirements
innovation risk
-The risk of losing customers because another firm creates more innovative products
dispatching
-The selecting and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers
consignor
-The sender of a shipment in a contract of transport
clickstream
-The way a customer moves through a website
expedite
-To rush or chase production or purchase orders that are needed in less than the normal lead time to take extraordinary action because of an increase in relative priority - Syn: stockchase
channel conflict
-Two or more agencies of one business competingforthe same customer - For example, retail, catalog, orweb sales
business judgment rule
-Under common law, an absence of liability for corporate directors and officers if they have used rational business judgment and have no conflict of interest
labor standard
-Under normal conditions, the quantity of worker minutes necessary to finish a product or process
insourcing
-Using the firm's internal resources to provide goods and services - See: makeorbuy decision
gross weight
-Vehicle weight including freight or passengers
channel equity
-important affiliations between suppliers and purchasers that improve value for everyone
balancingthe line
-in repetitive manufacturing, regulating the assignments given to each workstation in order to ensure that all tasks at each workstation on the line are performed in as close to the same time as possible
critical mass
-individuals who add value to the product or service - These individuals include personnel working directly on the product, personnel providing a service to the customer, and personnel who provide support for the product or service (e -g -, aftersale service)
decentralized inventory control
-inventory decision making exercised at each stocking location for SKUs at that location
centralized inventory control
-inventory decision making for all stockkeeping units exercised from one office or department for an entire company
executive sponsor
-ln SCOR implementation, the person chosen to spearhead the change process who is responsible for approving the change steps of the plan and selling the plan to the chief executives and lowerlevel managers of the organization
activity based costing (abc)
-ln activity based cost accounting, a model by time period of resource costs created as a result of activities related to products or services or other items causing the activity to be carried out
adaptablewebsite
-ln ecommerce, a site that a visitor can change to customize
free float
-ln the critical path method of project management, the amount of time that a given activity can be delayed without delaying an immediately subsequent activity's early start time - See: float, independent float, total float
stock buffer
-Term for stock that is put in front of a constraint to protect throughtput
assays
-Tests of the physical and chemical properties of a sample
core process
-That unique capability that is central to a company's competitive strategy
jidoka
-The Japanese term for the practice of stopping the production line when a defect occurs
autodiscrimination
-The ability of a bar code reader to read several different types of symbols consecutively
lot traceability
-The ability to identify the lot or batch number of product in terms of one or all of the following: its composition, purchased parts, manufacturing date, or shipped items - In certain regulated industries, lot traceability may be a legislative requirement
flexible capacity
-The ability to operate manufacturing equipment at different production rates by varying staffing levels and operating hours or starting and stopping at will
forecast mean absolute percentage of error (fm ape)
-The absolute error divided by actual demand for n periods, where absolute error is the variation between the actual demand and the forecast forthe period expressed as a positive value (regardless of whether the actual value was negative)
competitive advantage
-The advantage a company has over its rivals in attracting customers and defending against competitors - Sources of the advantage include characteristics that a competitor cannot duplicate without substantial cost and risk, such as a manufacturing technique, brand name, or human skill set - Syn: competitive edge
defects per unit
-The average number of blemishes on a particular product (e -g -, a television cabinet) - deficiencyFailure to meet quality standards
labor efficiency
-The average of worker efficiency for all direct workers in a department or facility - Syn: worker efficiency
acquisition cost
-The cost required to obtain one or more units of an item - Computed as: order quantity times unit cost - See: ordering cost
asset recovery
-The costeffective classification and recovery of usable raw materials from product returns, obsolete or excess goods, or scrap and waste - The goals are to minimize costs and liabilities while maximizing returns from reusable assets
external failure costs
-The costs related to problems found afterthe product reaches the customer - This usually includes such costs as warranty and returns
earliest start date
-The earliest date an operation or order can start - It may be restricted by the current date, material availability, or management specified maximum advance -
application to application
-The exchange of data between computers without reentry of data
inbound logistics
-The group in charge of moving materials from suppliers or vendors into production processes or storage facilities the actual movement of such material
freight consolidation
-The grouping of shipments to obtain reduced costs or improved utilization of the transportation function - Consolidation can occur by market area grouping, grouping according to scheduled deliveries, or using thirdparty pooling services such as public warehouses and freight forwarders
cad/cam
-The integration of computeraided design and computeraided manufacturing to achieve automation from design through manufacturing - CAEAbbreviation for computeraided engineering - cageA secure area used to store valuable items
emerging practice
-The introduction of new technology, knowledge, or significantly different methods of organizing processes
aggregate inventory
-The inventory for any grouping of items or products involving multiple stockkeeping units - See: base inventory level
idle inventory
-The inventory generally not needed in a system of linked resources - From a theory of constraints perspective, idle inventory generally consists of protective inventory and excess inventory
fabrication level
-The lowest production level - The only components at this level are parts (as opposed to assemblies or subassemblies) - These parts are either procured from outside sources orfabricated within the manufacturing organization
corrective maintenance
-The maintenance required to restore an item to a satisfactory condition
composition
-The makeup of an item, typically expressing chemical properties ratherthan physical properties
cleanup
-The neutralizing of the effects of production just completed - It may involve activities such as cleaning residues, sanitation, and equipment refixturing, forexample
controller
-The person responsible for financial and managerial accountingwithin a company - Syn: comptroller
demand planning
-The process of combining statistical forecasting techniques and judgment to construct demand estimates for products or services (both
churn
-The process of customers changing their buying preferences because they find better and/ or cheaper products and services elsewhere
bill of material structuring
-The process of organizing bills of material to perform specific functions, bill of operationsSyn: routing
data mining
-The process of studying data to search for previously unknown relationships - This knowledge is then applied to achieving specific business goals
executing processes
-The processes performed to complete a project plan to accomplish the objectives set forth in the project scope
key successfactors
-The product attributes, organizational strengths, and accomplishments with the greatest impact on future success in the marketplace
knowledge creation
-The propensity for generating knowledge
commodity procurement strategy
-The purchasing plan for a family of items - Includes the plan to manage the supplier base and solve problems
buyer cycle
-The purchasing sequence that generally follows the buyer's product and budget cycles
expected demand
-The quantity expected to be consumed during a given time period when usage is at the forecast rate - See: demand during lead time
drum
-ln the theory of constraints, the constraint is viewed as a drum, and nonconstraints are like soldiers in an army who march in unison to the drumbeat the resources in a plant should perform in unison with the drumbeat set by the constraint
incentive rate
-ln transportation, a discounted rate designed to convince a shipper to ship a higher volume in a particular load
independent action
-ln transportation, the publication of a freight rate that differs from that of the rate bureau to which the publisher is a member - This is a permitted action
unitization
-ln warehousing, the consolidation of several units into larger units for fewer handlings
inventory returns
-ltems returned to the manufacturer as defective, obsolete, overages, and so forth - An inventory item record transaction records the return or receipt into physical stores of materials from which the item may be scrapped
distinctive competency
-A sustainable advantage that a company has over its competitors
eurodollar
-A US dollar held in a foreign bank
bill of lading (international) (b/l)
-A bill of lading used in international trade to help ensure exporters are paid and importers receive the promised goods - When they are used for international transport, these include master bills of lading, house bills of lading, intermodal bills of lading, and airwaybills
certificate of manufacture
-A certificate that attests that the goods were manufactured in the exporter's country - It is provided and signed by the exporter's chamber of commerce
atr certificate
-A certificate that is required for trade between the EU and Turkey - It grants zero duty to free circulating goods in the EU, which are goods originating in the EU or imported to the EU with all import duties and taxes paid - Agricultural goods, minerals, and steel are excluded and must use form EUR1
bid evaluation
-A comparison of supplier quotes for a product based on price, quality, lead time, delivery performance, and other criteria, and—based on that comparison—supplier selection
darkfactory
-A completely automated production facility with no labor - Syn: lightless plant
commonality
-A condition in which certain raw materials or ingredients are used in multiple parents
bias
-A consistent deviation from the mean in one direction (high or low) - A normal property of a good forecast is that it is not biased - See: average forecast error
approved vendor list (avl)
-A list of parties that have been approved by a company as its suppliers - This list usually is based on product quality and financial stability of the vendor
fixed price incentive fee contract
-A contract in which the seller is paid a set price and can earn an additional profit if certain stipulations are met
collaborative transportation management
-A method of sharing information among suppliers, buyers, and transporters to add value to the service
export broker
-A party that introduces the buyer to the seller and eventually withdraws, getting a fee for services rendered
dividend
-A payment to stockholders in either cash or stock
double order point system
-A distribution inventory management system that has two order points - The first is the original order point (the smaller of the two), which covers demand during replenishment lead time - The second order point is the sum of the first order point plus normal usage during manufacturing lead time - It enables warehouses to forewarn manufacturing of future replenishment orders
cancellation charge
-A fee charged by a seller to cover its costs associated with a customer's cancellation of an order - If the seller has started engineering work, purchased raw materials, or started manufacturing operations, these charges could also be included in the cancellation charge
common law
-Law flowing from judicial decisions over the years rather than from legislative action
cost of lost sales
-Profit that is foregone because of a stockout situation
cost analysis
-Review and evaluation of actual or anticipated cost data
data collection
-The act of compiling data for recording, analysis, or distribution
ecash
-An electronic system that provides for deposits and withdrawals of digital money - It permits a payer using it to remain anonymous
electronic form
-An electronic version of a paper form - These forms eliminate the cost of printing, storing, and distributing paper forms
active datagathering
-Data gathered when a company initiates conversation with the customer
customer surveys
-Devices such as interviews or questionnaires designed to collect user data and preferences about product or service characteristics
buying down
-For products that historically have experienced price swings, attemptingto buy when the price is low or down - See: hedging, speculative buying
hurdle rate
-The minimum acceptable rate of return on a project
lading
-The cargo being transported by a vehicle
externality
-The costs or benefits of a firm's activities borne or received by others
cumulative manufacturing lead time
-The cumulative planned lead time when all purchased items are assumed to be in stock - Syn: composite manufacturing lead time
final assembly
-The highest level of assembled product, as it is shipped to customers
exchange unit
-The number of units to be produced before changing the bit, tool, or die - See: process batch
frozen master production schedule
-The parts of a master production schedule that should not be changed or should be changed rarely
disbursement
-The physical issuance and reporting of the movement of raw material, components, or other items from a storeroom orwarehouse - Taking a part out of inventory - See: issue
formal culture
-The visible segment of the organizational culture, such as policies and procedures, mission statement, and dress codes - See: informal culture
adjudicate
-To hear and decide an issue under legal dispute
decentralized purchasing
-When purchasing decisions are made locally and not at a central location
actual finish date
-ln project management, the date on which an activity in a project was actually completed
heel
-ln the process industry, an item used in its own manufacture - For example, in the manufacture of plastic, the ingredients will include the parent as well as the components
flagof convenience
-A ship registered in a nation with low taxes and lax safety regulations - Liberia and Panama are two favorite flags of convenience
doe
-Abbreviation for design of experiments -share matrix - dojoA Japanese word meaning hall
hypermedia
-An addition to hypertext to include sound, pictures, or music
contract
-An agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise - A contract may be oral orwritten - A purchase order, when accepted by a supplier, becomes a contract - Acceptance may be in writing or by performance, unless the purchase order requires acceptance in writing
jointventure
-An agreement between two or more firms to risk equity capital to attempt a specific business objective
bilateral contract
-An agreement wherein each party makes a promise to the other party
horizontal merger
-An alliance of two or more competing firms
depreciation
-An allocation of the original value of an asset against current income to represent the declining value of the asset as a cost of that time period - Depreciation does not involve a cash payment - It acts as a tax shield and thereby reduces the tax payment - See: capital recovery, depletion, doubledecliningbalance depreciation, straight line depreciation, unitsofproduction depreciation
fixed cost contribution perunit
-An allocation process where total fixed cost for a period is divided by total units produced in that given time period
backup support
-An alternate location or maintainer thatcan provide the same service response or support as the primary location or maintainer
clearinghouse
-An entity restricted to providing services such as settling accounts
indicator
-An index of business activities
departmental stocks
-An informal system of holding some stock in a production department - This action is taken as a protection from stockouts in the stockroom or for convenience however, it results in increased inventory investment and possible degradation of the accuracy of the inventory records
gauge
-An instrument for measuring or testing
is0 26000
-An international standard adopted by the International Organization for Standardization to assist organizations in contributing to sustainable development beyond legal compliance through a common understanding of social responsibility - ISO 26000 is not a management system standard and is not intended or appropriate for certification purposes or regulatory or contractual use
is050001
-An international standard that defines the requirements fordesigning, implementing, and maintaining an energy management system - It includes documentation, reporting, and procurement guidance
drum buffer rope
-(DBR)The theory of constraints method for scheduling and managing operations that have an internal constraint or capacityconstrained resource
bill of batches
-A method oftrackingthe specific multilevel batch composition of a manufactured item - The bill of batches provides the necessary whereused and wherefrom relationships required for lot traceability, bill of capacitySyn: bill of resources, bill of distributionSyn: distribution network structure
description by specification
-A method to identify a product or service required by communicating its characteristics in detail
common cost
-A cost that is incurred by the business as a whole
business process reengineering(bpr)
-A procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service, and speed - Any BPR activity is distinguished by its emphasis on process, rather than functions and products, and the customers for the process
failure mode effects and criticality analysis (fme)
-A procedure that is performed after a failure mode effects analysis to classify each potential failure effect according to its severity and probability of occurrence
activity list
-A record of planned activities in a project, including an activity description and an activity identifier
drawback
-A refund of customs duties paid on material imported and later exported
certificated carrier
-A regulated forhire air carrier that provides service under an operating certificate
exception report
-A report that lists or flags only those items that deviate from the plan
globally harmonized system of classification and labelling of chemicals (ghs)
-An international standard, created by the United Nations Economic Commission for Europe (UNECE), for classifying chemicals according to their health, physical, and environmental hazards - The system defines and classifies the hazards of chemical products, and communicates health and safety information on labels and material safety data sheets - See: harmonized tariff schedule
customer convergence
-An internetbased marketing concept in which organizations must provide descriptions of the goods and services they offer so potential customers will locate or converge on the appropriate websites
business process outsourcing
-Contracting with third parties to perform noncore activities within a business - Functions often outsourced include human resources, accounts receivable, accounts payable, and payroll
cost management
-Control of activities to eliminate waste, improve cost drivers, and plan operations - This process should affect the organization's setting of strategy - Product pricing, introduction of new products, and distribution of existing products are examples of strategic decisions that are affected by cost management
decisions under uncertainty
-Decisions for which the analyst elects to consider several possible futures, the probabilities of which cannot be estimated, decisionsupport dataSy n: data warehouse
employee assistance program (eap)
-Employerprovided service aimed at helping employees and theirfamilies with personal and workrelated problems - Examples include financial counseling and chemicaldependency rehabilitation programs
dedicated equipment
-Equipment whose use is restricted to specific operations on a limited set of components
international organization for standardization (iso)
-Group of cooperating institutes from 155 countries working to develop and publish international standards - It acts as a bridge between public and private sectors
classification
-The designation of the job function that an employee is assigned to and is proficient in forexample, assembler, machinist, orwelder
inventory investment
-The dollars that are in all levels of inventory
file structure
-The manner in which records are stored within a file (e -g -, sequential, random, indexsequential)
exposures
-The numberof times peryearthe system risks a stockout - The number of exposures is arrived at by dividing the annual usage by the lot size
decentralized dispatching
-The organization ofthe dispatchingfunction into individual departmental dispatchers
datagovernance
-The overall management of data's accessibility, usability, reliability, and security - Used to ensure data record accuracy
department overhead rate
-The overhead rate applied to jobs passing through a department
gemba
-The place where humans create value the real workplace - Also a philosophy: Go to the actual place, see the actual work -
job rotation
-The practice of an employee periodically changingjob responsibilities to provide a broader perspective and a view of the organization as a total system, in order to enhance motivation and provide crosstraining
forward buying
-The practice of buying materials in a quantity exceeding current requirements but not beyond the point that the longterm need exists
backup/restore
-The procedure of making backup copies of computerfiles ordisks and, in case of loss of or damage to the original, using the backups to restore the files or disks - In such a case, the only work lost is that done since the backup was made
arbitration
-The process by which an independent third party is brought in to settle a dispute or to preserve the interests of two conflicting parties, arithmetic meanSyn: mean
layoff
-The process by which employees who are not needed for some extended amount oftime are given notice that their services are being discontinued - Benefits may or may not continue during a layoff
collaborative forecasting
-The process for collecting and reconciling information from within and outside the organization to come up with a single projection of demand
backhauling
-The process of a transportation vehicle returning from the original destination point to the point of origin - The 1980 Motor Carrier Act deregulated interstate commercial trucking and thereby allowed carriers to contract for the return trip - The backhaul can be with a full, partial, or empty load - An empty backhaul is called deadheading - See: deadhead
dispute resolution
-The process of arbitration or mediation to settle arguments without going to court
kitting
-The process of constructing and staging kits
product structure
-The sequence of operations that components follow during their manufacture into a product - A typical product structure shows raw material converted into fabricated components, components put together to make subassemblies, subassemblies going into assemblies, and so forth
inventory diversion
-The shipment of parts against a project or contract other than the original project or contract for which the items were purchased
cost center
-The smallest segment of an organization, typically a department, forwhich costs are collected and formally reported - The criteria in defining cost centers are that the cost be significant and that the area of responsibility be clearly defined - A cost center is not necessarily identical to awork center normally, a cost center encompasses more than one work center, but this may not always be the case
inventory velocity
-The speed with which inventory passes through an organization or supply chain at a given point in time as measured by inventory turnover - See: inventory turnover
gross inventory
-The standard cost value of inventory before allowance for excess or obsolete items
issue cycle time
-The time required to generate a requisition for material, pull the material from an inventory location, and move it to its destination
assembly lead time
-The time that normally elapses between the issuance of a work order to the assembly floor and work completion
forecast interval
-The time unit forwhich forecasts are prepared, such as week, month, or quarter - Syn: forecast period
economic life
-The time until a product is scrapped not because it is unusable, but because repairs are becoming too expensive to justify further use - economic lot sizeSyn: economic order quantity
gross sales
-The total amount charged to all customers during the accounting time period
ecommerce
-The use of computer and telecommunication technologies to conduct business via electronic transfer of data and documents
decision variables
-The variables that will be changed to find the optimal solution in an optimization problem
appraisal costs
-Those costs associated with the formal evaluation and audit of quality in the firm - Typical costs include inspection, quality audits, testing, calibration, and checking time
intangible costs
-Those costs that are difficult to quantify, such as the cost of poor quality or of high employee turnover
judgment items
-Those inventory items that cannot be effectively controlled by algorithms because of age (new or obsolete product) or management decision (promotional product)
finished goods inventory
-Those items on which all manufacturing operations, includingfinaltest, have been completed - These products are available for shipment to the customer as either end items or repair parts - Syn: finished products inventory - See: goods
acceptance criteria
-Those performance requirements and conditions that must be reached before projects or products are accepted
cross functional integration
-Thread that weaves the entire organization and manufacturing process into one fabric in which each of the different parts serves and supports the whole - See: integrated enterprise
downtime
-Time when a resource is scheduled for operation but is not producingfor reasons such as maintenance, repair, or setup
accept
-To take receipt of an item as being complete and sound
customer share
-ln marketing, a measurement (usually a percentage) of how many potential customers are attracted to a brand - It is a measurement of the recognition of the brand in the marketplace and the predisposition of the customerto buy the brand when presented with a choice of competing brands
customer acquisition
-ln marketing, the rate at which new customers are switching to an organization's brand
blending department
-ln process industries, the name of the departmentwhere the ingredients are mixed - See: final assembly department
bill of exchange payment
-A promissory note that the importer uses to formally acknowledge its debt to the exporter - Syn: draft
job lot
-A specific quantity of a part or product that is produced at one time
auxiliary item
-An item required to support the operation of another item
international company
-Any organization conducting business in multiple countries
competitive stance
-Is how the competition markets its products
first pass yield
-The ratio of products that conform to specifications without rework or modification to total input
green marketing
-ln advertising, promoting products because of their environmental sensitivity
bill of material (bom)
-1) A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly, showing the quantity of each required to make an assembly - It is used in conjunction with the master production schedule to determine the items for which purchase requisitions and production orders must be released - A variety of display formats exists for bills of material, including the singlelevel bill of material, indented bill of material, modular (planning) bill of material, transient bill of material, matrix bill of material, and costed bill of material - 2) A list of all the materials needed by a contract manufacturer to make one production run of a product's piece parts/components for its customers - The bill of material may also be called the formula, recipe, or ingredients list in certain process industries
batch processing
-1) A manufacturing technique in which parts are accumulated and processed together in a lot - 2) A computer technique in which transactions are accumulated and processed together or in a lot - Syn: batch production, batch productionSyn: batch processing
best practice
-1) A method or technique that consistently shows results superior to those achieved through other means, often used as a benchmark - Best practices can be defined within an organization, within an industry, or across industries - 2) Practices that have had a proven and positive impact on organizational or supply chain performance - They are categorized as follows: CurrentNot emerging, not obsolete StructuredFeature a clearly stated goal, scope, process, and procedure ProvenDemonstrated in a working environment and linked to key metrics RepeatableProven in multiple organizations and industries
holonic network
-1) A network of autonomous, distributed human or computer systems that are capable of acting in an integrated manner - 2) A network of companies dynamically interacting to act as one system - Each company, or holon, has a different process and core competency - Virtual enterprises are created by organizing the holons to take advantage of core competencies
customer
-1) A person or organization receiving a good, service, or information - See: external customer, internal customer - 2) In project management, every project has a customerwho may be internal or external to the organization and who is responsible for the final project acceptance
design of experiments (doe)
-1) A process for structuring statistically valid studies in any science - 2) A quality management technique used to evaluate the effect of carefully planned and controlled changes to input processvariables on the output variable - The objective is to improve production processes
buffer
-1) A quantity of materials awaiting further processing - It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center - 2) In the theory of constraints, buffers can be time or material and support throughput and/or due date performance - Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points
batch
-1) A quantity scheduled to be produced or in production - See: process batch, transfer batch - 2) For discrete products, the batch is planned to be the standard batch quantity, but during production, the standard batch quantity may be broken into smaller lots - See: lot - 3) In nondiscrete products, the batch is a quantity that is planned to be produced in a given time period based on a formula or recipe that often is developed to produce a given number of end items - 4) A type of manufacturing process used to produce items with similar designs it also may cover a wide range of order volumes - Typically, items ordered are of a repeat nature, and production may be for a specific customer order or for stock replenishment - See: project manufacturing
cube rate
-1) A rate used to improve warehouse order picker productivity by placing items with smallertotal cubic space requirements closer to the shipping area - A larger total number of items can be stored near the shipping area in this way, thereby reducing the aggregate orderpicking travel time - 2) A freight rate calculated on cargo volume rather than weight
consignment
-1) A shipment that is handled by a common carrier - 2) The process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold - See: consigned stocks
lead time
-1) A span oftime required to perform a process (or series of operations) - 2) In a logistics context, the time between recognition of the need for an order and the receipt of goods - Individual components of lead time can include order preparation time, queue time, processing time, move ortransportation time, and receiving and inspection time - Syn: total lead time - See: manufacturing lead time, purchasing lead time
business plan
-1) A statement of longrange strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow (source and application of funds) statement - A business plan is usually stated in terms of dollars and grouped by product family - The business plan is then translated into synchronized tactical functional plans through the production planning process (orthe sales and operations planning process) - Although frequently stated in different terms (dollars versus units), these tactical plans should agree with each other and with the business plan - See: longterm planning, strategic plan - 2) A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business
bin
-1) A storage device designed to hold small discrete parts - 2) A shelving unit with physical dividers separating the storage locations
bin tag
-1) A type of perpetual inventory record designed for storekeeping purposes and maintained at the storage area for each inventory item - 2) An identifying marking on a storage location
inventory reserve
-1) An accounting entry that represents a deduction from earnings for the purpose of fairly and reasonably representing the value of inventoried assets on a balance sheet - The inventory reserve is used to make up for the fact that all inventory will not be sold at the cost to the firm - 2)
hedge
-1) An action taken in an attempt to shield the company from an uncertain event such as a strike, price increase, or currency reevaluation - 2) In master scheduling, a scheduled quantity to protect against uncertainty in demand or supply - The hedge is similar to safety stock, except that a hedge has the dimension of timing as well as amount - A volume hedge or market hedge is carried at the master schedule or production plan level - The master scheduler plans excess quantities over and above the demand quantities in given periods beyond some time fence such that, if the hedge is not needed, it can be rolled forward before major resources must be committed to produce the hedge and put it in inventory - A product mix hedge is an approach where several interrelated optional items are overplanned - Sometimes, using a planning bill, the sum of the percent mix can exceed 100 percent by a defined amount, thus triggering additional hedge planning - 3) In purchasing, any purchase or sale transaction having as its purpose the elimination of the negative aspects of price fluctuations - See: market hedge, option overplanning, planning bill of material, safety stock, time fence, twolevel master
job shop
-1) An organization in which similar equipment is organized by function - Each job follows a distinct routing through the shop - 2) A type of manufacturing process used to produce items to each customer's specifications - Production operations are designed to handle a wide range of product designs and are performed at fixed plant locations using generalpurpose equipment
constraint
-1) Any element or factor that prevents a system from achieving a higher level of performance with respect to its goal - Constraints can be physical, such as a machine center or lack of material, but they can also be managerial, such as a policy or procedure - 2) One of a set of equations that cannot be violated in an optimization procedure
certified purchasing manager
-1) Certification from The Institute for Supply Management (ISM), formerly N APM - This certification is no longer available and can be recertified only (C -P -M -) - 2) Certification from the American Purchasing Society (CPM)
implode
-1) Compression of detailed data in a summarylevel record or report - 2) Tracing a usage and/or cost impact from the bottom to the top (end product) of a bill of material using whereused logic
incremental cost
-1) Cost added in the process of finishing an item or assembling a group of items - For example, if the cost of the components of a given assembly equals $5 and the additional cost of assembling the components is $1, the incremental assembly cost is $1, while the total cost of the finished assembly is $6 -2) Additional cost incurred as a result of a decision - incremental utilization heuristicUsing a worker's full capacity by adding one task at a time (in priority order) up to the maximum capacity, or waiting for the utilization to fall and then adding more tasks
interest
-1) Financial share in a project or enterprise - 2) Periodic compensation for lending money - 3) In an economy study, synonymous with required return, expected profit, or charge for the use of capital - 4) The cost for the use of capital - Sometimes referred to as the time value of money
driver
-1) In activitybased cost accounting, an operation that influences the quantity of work required and cost of an activity - Syn: cost driver - 2) In the theory of constraints, an underlying cause that is responsible for several observed effects
arrow
-1) In activityonarrow networks, the graphic presentation of an activity - The tail of the arrow represents the start of the activity - The head of the arrow represents the finish - Unless a time scale is used, the length of the arrow stem has no relation to the duration of the activity - Length and direction of the arrow are usually a matter of convenience and clarity - 2) In activityonnode networks, an arrow represents a precedence requirement
gatekeeping
-1) In group dynamics, a technique applied by a team leader to effectively manage a situation, discussion, or meeting - For example, in a situation where a dominant spokesperson or person of authority monopolizes a discussion, the gatekeeperwill intervene by requesting additional group members' input - 2) In logistics, the vetting of return materials and issuing of return material authorizations (RMAs) in accordance with the organization's returns policy - The intent is to minimize returns and return costswhile managing customer interactions and expectations to maintain intended customer service levels
cycle time
-1) In industrial engineering, the time between the completion of two discrete units of production - For example, the cycle time of motors assembled at a rate of 120 per hour is 30 seconds - 2) In materials management, the length of time from when material enters a production facility until it exits - Syn: throughput time
hardware
-1) In manufacturing, relatively standard items such as nuts, bolts, washers, or clips - 2) In data processing, the computer and its peripherals
available to promise (atp)
-1) In operations, the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customerorder promising - The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled - In the first period, ATP includes onhand inventory less customer orders that are due and overdue - Three methods of calculation are used: discrete ATP, cumulative ATPwith lookahead, and cumulative ATP without lookahead - (2) In logistics, the quantity of a finished good that is or will be available to commit to a customer order based on the customer's required ship date - To accommodate deliveries on future dates, ATP is usually timephased to include anticipated purchases or production receipts - See: discrete availabletopromise, cumulative availabletopromise
champion
-1) In quality control, sponsor of a Six Sigma implementation project - 2) In general, sponsor of an improvement effort
cash conversion cycle
-1) In retailing, the length of time between the sale of products and the cash payments for a company's resources - 2) In manufacturing, the length of time from the purchase of raw materials to the collection of accounts receivable from customers for the sale of products or services
direct costs
-1) In traditional cost accounting, variable costs that can be directly attributed to a particular job or operation - Direct material and direct labor are traditionally considered direct costs - 2) In activitybased cost (ABC) accounting, a cost that can specifically be traced and is economically feasible to track to a particular cost object (e -g -, the units produced, a production line, a department, a manufacturing plant) - In contrast, if the cost must be allocated across various cost objects, it is an indirect cost - Based on the cost object under consideration, the classification of direct and indirect can change - ABC accounting assumes that more costs traditionally viewed as fixed costs are variable and can be traced to cost objects
allowance
-1) In work measurement, a time value or percentage of time by which the normal time is increased, or the amount of nonproductive time applied, to compensate for justifiable causes or policy requirements that necessitate performance time not directly measured for each element or task - Usually includes irregular elements, incentive opportunity on machinecontrolled time, minor unavoidable delays, rest time to overcome fatigue, and time for personal needs - 2) In assembly, the minimum clearance or maximum interference distance between two adjacent objects
inventory issue
-1) Items released from an inventory location for use or sale - 2) The inventory record transaction reducing the inventory balance by the amount released
attribute
-1) Quality control value that is either ayes/ no value or is counted rather than being measured on a continuous scale - See: variable, attribute data - 2) A description of an item or service that specifies either a presence or an absence, such as ontime versus late -
customer service
-1) The ability of a company to address the needs, inquiries, and requests of customers - 2) A measure of the delivery of a product to the customer at the time the customer specified, customer service levelSyn: customer service ratio
adaptive control
-1) The ability of a control system to change its own parameters in response to a measured change in operating conditions - 2) Machine control units in which feeds and/or speeds are not fixed - The control unit, working from feedback sensors, is able to optimize favorable situations by automatically increasing or decreasingthe machining parameters - This process ensures optimum tool life or surface finish and/or machining costs or production rates
flexibility
-1) The ability of the manufacturing system to respond quickly, in terms of range and time, to external or internal changes - Six different categories of flexibility can be considered: mix flexibility, design changeover flexibility, modification flexibility, volume flexibility, rerouting flexibility, and material flexibility (see each term for a more detailed discussion) - In addition, flexibility involves concerns of product flexibility - Flexibility can be useful in coping with various types of uncertainty (regarding mix, volume, and so on) - 2) The ability of a supply chain to mitigate, or neutralize, the risks of demand forecast variability, supply continuity variability, cycle time plus leadtime uncertainty, and transit time plus customsclearance time uncertainty during periods of increasing or diminishing volume
balance
-1) The act of evenly distributing the work elements between the two hands performing an operation - 2) The state of having approximately equal working times among the various operations in a process orthe stations on an assembly line - See: balance delay
distribution
-1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer - These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management - It includes all activities related to physical distribution, as well as the return of goods to the manufacturer - In many cases, this movement is made through one or more levels of field warehouses - Syn: physical distribution - 2) The systematic division of a whole into discrete parts having distinctive characteristics
float
-1) The amount of workinprocess inventory between two manufacturing operations, especially in repetitive manufacturing - 2) In supply chains, the time necessary for items such as documents and checks to go from one supply chain partner to another - 3) In the critical path method of project management, the amount of time that an activity's early start or early finish time can be delayed without delaying the completion time of the entire project - There are three types: total float, free float, and independent float
average forecast error
-1) The arithmetic mean of the forecast errors - 2) The exponentially smoothed forecast error - See: bias, forecast error - The average can be calculated as an average of several inventory observations taken over several historical time periods for example, 12 month ending inventories may be averaged - When demand and lot sizes are not uniform, the stock level versus time can be graphed to determine the average
capacity
-1) The capability of a system to perform its expected function - 2) The capability of a worker, machine, work center, plant, or organization to produce output per time period - Capacity required represents the system capability needed to make a given product mix (assuming technology, product specification, etc -) - As a planning function, both capacity available and capacity required can be measured in the short term (capacity requirements plan), intermediate term (roughcut capacity plan), and longterm (resource requirements plan) - Capacity control is the execution through the I/O control report of the shortterm plan - Capacity can be classified as budgeted, dedicated, demonstrated, productive, protective, rated, safety, standing, or theoretical - See: capacity available, capacity required - 3) Required mental ability to enter into a contract
allocation
-1) The classification of resources or item quantities that have been assigned to specific orders but have not yet been released from the stockroom to production - It is an uncashed stockroom requisition - 2) A process used to distribute material in short supply - Syn: assignment - See: reservation, allocation costingSyn: absorption costing
job
-1) The combination of tasks, duties, and responsibilities assigned to an individual employee and usually considered his or her work assignment - 2)The contents of a work order
kit
-1) The components of a parent item that have been pulled from stock and readied for movement to a production area - 2) A group of repair parts to be shipped with an order - Syn: kitted material, staged material, kitted materialSyn: kit
current cost
-1) The current or replacement cost of labor, material, or overhead - Its computation is based on current performance or measurements, and it is used to address today's costs before production as a revision of annual standard costs - 2) An asset's value based on the cost of an identical asset purchased today
future worth
-1) The equivalent monetary value at a designated future date based on the time value of money - 2) The monetary sum, at a given future time, that is equivalent to one or more sums at given earlier times when interest is compounded at a given rate - See: time value of money
distribution requirements planning (drp)
-1) The function of determining the need to replenish inventory at branch warehouses - A timephased order point approach is used where the planned orders at the branch warehouse level are exploded via MRP logic to become gross requirements of the supplying source - In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (masterwarehouse, factory warehouse, etc -) and become input to the master production schedule - Demand on the supplying sources is recognized as dependent, and standard MRP logic applies - 2) More generally, replenishment inventory calculations, which may be based on other planning approaches such as period order quantities or replace exactly what was used, rather than being limited to the time phased order point approach
demand management
-1) The function of recognizing all demands for goods and services to support the marketplace - It involves prioritizing demand when supply is lacking - Proper demand managementfacilitates the planning and use of resources for profitable business results - 2) In marketing, the process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services to bring about transactions that meet organizational and individual needs - Syn: marketing management - See: demand planning
balance delay
-1) The idle time of one hand in an operation caused by uneven workload balancing - 2) The idle time of one or more operations in a series caused by uneven workload balancing - See: balance, lost time factor
cycle
-1) The interval of time during which a system or process, such as seasonal demand or a manufacturing operation, periodically returns to similar initial conditions - 2) The interval of time during which an event or set of events is completed
issue
-1) The physical movement of items from a stocking location - See: disbursement - 2) Often, the transaction reporting of this activity
compound interest
-1) The type of interest that is periodically added to the amount of investment (or loan) so that subsequent interest is based on the cumulative amount - 2) The interest charges under the condition that interest is charged on any previous interest earned in any time period, as well as on the principal
inventory
-1) Those stocks or items used to support production (raw materials and workinprocess items), supporting activities (maintenance, repair, and operating supplies), and customer service (finished goods and spare parts) - Demand for inventory may be dependent or independent - Inventory functions are anticipation, hedge, cycle (lot size), fluctuation (safety, buffer, or reserve), transportation (pipeline), and service parts - 2) All the money currently tied up in the system - As used in theory of constraints, inventory refers to the equipment, fixtures, buildings, and so forth that the system ownsas well as inventory in the forms of raw materials, workinprocess, and finished goods
genchi genbutsu
-A Japanese phrase meaning to visit the shop floor to observe what is occurring
hansei
-A Japanese word meaning reflection - hard automationUse of specialized machines to manufacture and assemble products - Each machine is normally dedicated to one function, such as milling - hardcopyA printed report, message, or special listing
jishuken
-A Japanese word meaning voluntary study groups
caveatemptor
-A Latin phrase meaning, Let the buyer beware - (I -e -,the purchase is at the buyer's risk -)
environmental protection agency (epa)
-A US agency with regulatory authority over matters affecting the environment, including waste generation and habitat destruction
automated clearinghouse
-A US nationwide system for electronic payments preferred by a myriad of banks, consumers, and corporations - This system can carry payment information in a standardized, computeraccessible format
interstate commerce commission (icc)
-A US regulatory agency charged with enforcing regulations controlling railroads, motor carriers, pipelines, domestic water carriers, domestic surface freight forwarders, and brokers
alternate feedstock
-A backup supply of an item that either acts as a substitute or is used with alternate equipment
accessorial charges
-A bill for services, such as inside deliveries, that are made in addition to transportation charges
airwaybill (awb)
-A bill of lading for transporting domestic or international freight by air - It specifies the destination and terms of trade agreed upon by the shipper and transportation organization - AISAbbreviation for automated information system
interrupt
-A break in the normal flow of a computer routine such that the flow can be resumed from that point at a later time - An interrupt is usually caused by a signal from an external source
diagnostic study
-A brief investigation or cursory methods study of an operation, process, group, or individual to discover causes of operational difficulties or problemsforwhich more detailed remedial studies may be feasible - An appropriate work measurement technique may be used to evaluate alternatives or to locate major areas requiring improvement
integrated enterprise
-A business or organization made up of individuals who have acquired the knowledge and skills to work with others to make the organization a greater success than the sum of each individual's output - Integration includes increased communication and coordination between individuals and within and across teams, functions, processes, and organizations overtime - See: crossfunctional integration
catchball
-A business process of floating ideas and comments around in an iterative manner, much like tossing a ball back and forth
differentiation strategy
-A business strategy that focuses on setting a product or service apart from the competitionfocusing on making the product or service unique
independent trading exchange
-A businesstobusiness marketplace ownership model - These are public sites often used for indirect materials and commodity purchases where the price is the primary factor and where any buyers and sellers for a particular market meet to gain access to a wider market to find the best deals - See: public marketplaces
cumulative available to promise
-A calculation based on the availabletopromise (ATP) figure in the master schedule - Two methods of computing the cumulative availabletopromise are used, with and without lookahead calculation - The cumulative with lookahead ATP equals the ATP from the previous period plus the MPS ofthe period minus the backlog of the period minus the sum ofthe differences between the backlogs and MPSs of all future periods until, but not to include, the period where point production exceeds the backlogs - The cumulative without lookahead procedure equals the ATP from the previous period plus the MPS, minus the backlog in the period being considered - See: availabletopromise
bill of lading (uniform) (b/l)
-A carrier's contract and receipt for goods the carrier agrees to transport from one place to another and to deliver to a designated person - In case of loss, damage, or delay, the bill of lading is the basis for filing freight claims
certificate of inspection
-A certificate provided by an independent inspection organization attestingto the accuracy of the value and authenticity of the goods as listed on the invoice - The exporter obtains this preshipment certificate in the exporting country
chain reaction
-A chain of events proposed by W - Edwards Deming: Improve quality and costs will go down because of less scrap and rework, while revenues will go up because the company will be able to sell more product at higher prices - Thus, better quality means more profitability
inventory adjustment
-A change made to an inventory record to correct the balance in order to bring it in line with actual physical inventory balances - The adjustment either increases or decreases the item record onhand balance
competitive differentiator
-A characteristic that makes a company or product unique within a marketplace, competitive edgeSyn: competitive advantage
accessory
-A choice or feature added to the good or service offered to the customer for customizing the end product - An accessory enhances the capabilities of the product but is not necessary for the basic function of the product - In many companies, an accessory means that the choice does not have to be specified before shipment but can be added at a later date - In other companies, this choice must be made before shipment - See: feature
environmentally responsible manufacturing
-A collection of manufacturing activities that includes design of the product, facility, manufacturing processes, logistics, and supplier relationships that reduce or eliminate environmental waste through innovation and improvements
data file
-A collection of related data records organized in a specific manner (e -g -, one record for each inventory item showing product code, unit of measure, production costs, transactions, selling price, and production lead time)
glocalization
-A combination of globalization and localization - In a supply chain context, glocalization is a form of postponement where a product or service is developed for distribution globally but is modified to meet the needs of a local market - The modifications are made to conform with local laws, customs, cultures, and preference
international financial reporting standards (ifrs)
-A common global language for business affairs so that company accounts are understandable and comparable across international boundaries - As a result of growing international shareholding and trade, they are rules to be followed by accountants to maintain books of accounts that are comparable, understandable, reliable, and relevant whether the users are internal or external
domestic corporation
-A company incorporated in a particular state or country
consolidator
-A company that groups together various shipments or orders to facilitate movement
integrated carrier
-A company that provides a variety of transportation services including ground, sea, air carriage, and freight forwarding
bricks and mortar
-A company that sells through a physical location - Ant: clicks and mortar (selling over the internet)
customer driven
-A company's consideration of customerwants and desires in decidingwhat is produced and its quality
grievance
-A complaint by an employee concerning alleged contract violations handled formally through contractually fixed procedures - If unsettled, a grievance may lead to arbitration
cyclical component
-A component of demand, usually describing the impact of the business cycle on demand - See: decomposition, time series analysis
electronic commerce application
-A computer interface between two organizations that is used to carry out business transactions electronically
bill of material processor
-A computer program for maintaining and retrieving bill ofmaterial information
application package
-A computer program or set of programs designed for a specific application (e -g -, inventory control, MRP)
applications software
-A computer program or set of programs designed to assist in the performance of a specific task such as word processing, accounting, or inventory management - See: application system
decision support system (dss)
-A computer system designed to assist managers in selecting and evaluating courses of action by providing a logical (usually quantitative) analysis ofthe relevant factors
interactive computer system
-A computer system that supports realtime interaction with a user - The response time to the user is similar to the actual timing of the business or physical process - See: interactive system
asynchronous process
-A condition under which two related processes run to finish independently of each other
composite yield
-A condition where loss occurs along several operations resulting in a decreased yield for the end item - Syn: cumulative yield
empowerment
-A condition whereby employees have the authority to make decisions and take action in their work areas without prior approval - For example, an operator can stop a production process if a problem is detected, or a customer service representative can send out a replacement product if a customercallswith a problem
full container load (fcl)
-A container that has been filled close to its volume or weight limit, or that holds only one shipper's order and the shipper has requested it be the only order in the container - See: full truckload
exponential distribution
-A continuous probability distribution where the probability of occurrence either steadily increases or decreases - The steady increase case (positive exponential distribution) is used to model phenomena such as customer service level versus cost - The steady decrease case (negative exponential distribution) is used to model phenomena such as the weight given to any one time period of demand in exponential smoothing
cost plus incentive fee contract
-A contract in which the seller is paid for costs specified as allowable in the contract plus a profit, provided certain provisions are met
cost plus fixed fee contract
-A contract in which the seller is paid for costs specified as allowable in the contract plus a stipulated fixed fee
hash total
-A control process used to ensure that all documents in a group are present or processed - In practice, the arithmetic sum of data not normally added together is found, the checking (audit) process adds the same data, and a comparison is made - If the sums do not agree, an error exists - For example, assume the last digit of every part number in an assembly is added, and the last digit of the sum becomes the last digit of the assembly - If the last digit of the assembly is not the same as the last digits of the components' sum, the assembly must be missing a part or must have the wrong combination of parts
actual cost system
-A cost system that collects costs historically as they are applied to production and allocates indirect costs to products based on the specific costs and achieved volume of the products
cumulative receipts
-A cumulative number, or running total, as a count of parts received in a series or sequence of shipments - The cumulative receipts provide a numberthat can be compared with the cumulative figures from a plan developed by cumulative MRP
customer partner
-A customer organization with which a company has formed a customersupplier partnership - See: outpartnering
bespoke
-A custommade product or service - The term originally applied to clothing, but now applies to software as well
discontinuous demand
-A demand pattern that is characterized by large demands interrupted by periodswith no demand, as opposed to a continuous or steady (e -g -, daily) demand - Syn: lumpy demand
accelerated depreciation
-A depreciation method involving large writeoffs in the early years of an asset's life and smaller writeoffs later - This method reduces the value of an asset faster than straightline depreciation
closely held
-A description of an organization owned by a small number of people
activity level
-A description of how reactive one activity is to changes in the level of another activity or cost object
enable process
-A description of the activities associated with the management of the supply chain, including management of business rules, performance management, data management, resource management, facilities management, contract management, supply chain network management, managing regulatory compliance, and risk management
analytic workplace design
-A design based on established biomechanical and behavioral concepts, including the known operating characteristics of people - Produces a workplace situation well within the range of human capacity and does not generally require modification, improvement, or preliminary experimental mockup -
baldrige qualified
-A designation claimed by companies that have been granted a site visit by the Malcolm Baldrige National Quality Award examiners
downside supply chain adaptability
-A discrete measurement of the reduction in quantities ordered sustainable at 30 days prior to delivery with no inventory or cost penalties
critical ratio
-A dispatching rule that calculates a priority index number by dividing the time to due date remaining by the expected elapsed time to finish the job - A ratio less than 1 -0 indicates the job is behind schedule, a ratio greater than 1 -0 indicates the job is ahead of schedule, and a ratio of 1 -0 indicates the job is on schedule
earliest operation due date (odd)
-A dispatching rule that selects the job having the earliest due date for the impending operation - See: earliest due date
transaction channel
-A distribution network that dealswith change of ownership of goods and services
consumer durable goods
-A division of durable goods that comprises items intended for consumer use, such as refrigeratorsas opposed to industrial goods, such as forklifts - See: durable goods
business unit
-A division or segment of an organization generally treated as a separate profitandloss center
certificate of origin
-A document attestingto a shipment's country of origin
batch card
-A document used in the process industries to authorize and control the production of a quantity of material - Batch cards usually contain quantities and lot numbers of ingredients to be used, processing variables, packout instructions, and product disposition - See: assembly parts list, batch sheet, blend formula, fabrication order, manufacturing order, mix ticket, batch formulaSyn: batch bill of materials
balance of stores record
-A doubleentry record system that shows the balance of inventory items on hand and the balances of items on order and available for future orders - Where a reserve system of materials control is used, the balance of material on reserve is also shown
functional layout
-A facility configuration in which operations of a similar nature or function are grouped together an organizational structure based on departmental specialty (e -g -, saw, lathe, mill, heat treat, press) - Syn:job shop layout, process layout
catalog channel
-A facility that receives orders based on a published book of offerings and ships from its warehouse to the customer
distribution warehouse
-A facility where goods are received in largevolume uniform lots, stored briefly, and then broken down into smaller orders of different items required by the customer - Emphasis is on expeditious movement and handling
bottleneck
-A facility, function, department, or resource whose capacity is less than the demand placed upon it - For example, a bottleneck machine or work center exists where jobs are processed at a slower rate than they are demanded - Syn: bottleneck operation
fixed position layout
-A factory layout that plans for the product to be in a set place the people, machines, and tools are brought to and from the product
labor claim
-A factory worker's report that lists the jobs an employee worked on (number of pieces, number of hours, etc -) and often the amount of money to which the employee is entitled - A labor claim is usually made on a labor chit or time ticket - Syn: labor ticket, laborvoucher
bin location file
-A file that specifically identifies the location where each item in inventory is stored, bin reserve systemSyn: twobin inventory system
key performance indicator (kpi)
-A financial or nonfinancial measure that is used to define and assess progress toward specific organizational goals and typically is tied to an organization's strategy and business stakeholders - A KPI should not be contradictory to other departmental or strategic business unit performance measures - A metric used to measure the overall performance or state of affairs - SCOR level 1 metrics are considered KPIs
activity ratio
-A financial ratio to determine how an organization's resources perform relative to the revenue the resources produce - Activity ratios include inventory turnover, receivables conversion period, fixed asset turnover, and return on assets
balance sheet
-A financial statement showing the resources owned, the debts owed, and the owner's share of a company at a given point in time - See: funds flow statement, income statement
application service provider (asp)
-A firm that performs outsourced services for clients
intrinsic forecast method
-A forecast based on internal factors, such as an average of past sales - Ant: extrinsic forecast
jury of executive opinion
-A forecast given by a group of executives who are knowledgeable about the industry, competition, and the firm
exempt carrier
-A forhire carrier that is free from economic regulation
boolean algebra
-A form of algebra that, like ordinary algebra, represents relationships and properties with symbols - However, Boolean algebra also has classes, propositions, onoff circuit elements, and operators (and, or, not, except, if, then) - Boolean algebra is useful in defining the logic of a complex system
fourier series
-A form of analysis useful for forecasting - The model is based on fitting sine waves with increasing frequencies and phase angles to a time series
costed bill of material
-A form of bill of material that extends the quantity per of every component in the bill by the cost of the components
keiretsu
-A form of cooperative relationship among companies in Japan where the companies largely remain legally and economically independent, even though they work closely in various ways such as financial backing - A member of a keiretsu generally owns a limited amount of stock in other member companies - A keiretsu generally forms around a bank and a trading company, butdistribution (supply chain) keiretsu alliances have been formed of companies ranging from raw material suppliers to retailers
fixed reorder cycle inventory model
-A form of independent demand management model in which an order is placed every n time units - The order quantity is variable and essentially replaces the items consumed during the current time period - If M is the maximum inventory desired at any time and x is the quantity on hand at the time the order is placed, then in the simplest model, the order quantity equals M minus x - The quantity M must be large enough to coverthe maximum expected demand duringthe lead time plus a review interval - The order quantity model becomes more complicated whenever the replenishment lead time exceeds the review interval, because outstanding orders then have to be factored into the equation
hedge inventory
-A form of inventory buildup to buffer against some event that may not happen - Hedge inventory planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company's strategic initiatives - Risk and consequences are unusually high, and top management approval is often required
job grade
-A form of job evaluation that assigns jobs to predetermined job classifications accordingto the job's relative worth to the organization - Pay scales are usually set for each job grade
intermittent production
-A form of manufacturing in which the jobs pass through the functional departments in lots, and each lot may have a different routing - See: job shop
flow shop
-A form of manufacturing organization in which machines and operators handle a standard, usually uninterrupted, material flow - The operators generally perform the same operations for each production run - A flow shop is often referred to as a mass production shop or is said to have a continuous manufacturing layout - The plant layout (arrangement of machines, benches, assembly lines, etc -) is designed to facilitate a product flow - Some process industries (chemicals, oil, paint, etc -) are extreme examples of flow shops - Each product, though variable in material specifications, uses the same flow pattern through the shop - Production is set at a given rate, and the products are generally manufactured in bulk - Syn: flow line, flow manufacturing, flow plant
indented bill of material
-A form of multilevel bill of material - It exhibits the highestlevel parents closest to the left margin, and all the components going into these parents are shown indented toward the right - All subsequent levels of components are indented farther to the right - If a component is used in more than one parent within a given product structure, it will appear more than once, under every subassembly in which it is used
job description
-A formal statement of duties, qualifications, and responsibilities associated with a particular job
design chain operations reference (dcor)
-A framework that links research and development processes, metrics, performance, best practices, and technology features into a unified structure to support communication among design chain partners and to improve the effectiveness of the extended supply chain
cost, insurance, freight (cif)
-A freight term indicating that the seller is responsible for cost, the marine insurance, and the freight charges on an ocean shipment of goods
defect
-A good's or service's nonfulfillment of an intended requirement or reasonable expectation for use, including safety considerations - There are four classes of defects: Class 1, Very Serious, leads directly to severe injury or catastrophic economic loss - Class 2, Serious leads directly to significant injury or significant economic loss - Class 3, Major related to major problems with respect to intended normal or reasonably foreseeable use - Class 4, Minor related to minor problems with respect to intended normal or reasonably foreseeable use - See: blemish, imperfection, nonconformity
histogram
-A graph of contiguous vertical bars representing a frequency distribution in which the groups or classes of items are marked on the x axis and the number of items in each class is indicated on the y axis - The pictorial nature of the histogram lets people see patterns that are difficult to see in a simple table of numbers - The histogram is one of the seven tools of quality
information flow profile
-A graph of the performance of information flow compared to some set of performance criteria
distribution curve
-A graphic display of numerous data points showing the mean and frequency of occurrences of observations on a chart - See: normal distribution curve
flow process chart
-A graphic, symbolic representation of thework performed, orto be performed, on a product as it passes through some or all of the stages of a process - Typically, the information included in the chart is quantity, distance moved, type ofwork done (by symbol with explanation), and equipment used - Work times may also be included - The flow process chart symbols (ASME Standard Symbols) generally used are: O operation: A subdivision of a process that changes or modifies a part, material, or product and is done essentially at one workplace location transportation (move): Change in location of a person, part, material, or product from one workplace to another ■ inspection: Comparison of observed quality or quantity of a product with a quality or quantity standard▼ storage: Keeping a product, material, or part protected against unauthorized removal D delay: An event that occurs when an object or person waits for the next planned action H combined activity: Adjustment during testing (e -g -, combination of the separate operation and inspection symbols)
bar graph
-A graphical method of displaying data by grouping observations into specific clusters
break even chart
-A graphical tool showing the total variable cost and fixed cost curve alongwith the total revenue curve - The point of intersection is defined as the breakeven point (i -e -, the point at which total revenues exactly equal total costs) - See: total cost curve
cartel
-A group of companies that agree to cooperate, rather than compete, in producing a product or service, thus limiting or regulating competition
family
-A group of end items whose similarity of design and manufacture facilitates their being planned in aggregate, whose sales performance is monitored together, and (occasionally) whose cost is aggregated at this level
distribution system
-A group of interrelated facilitiesmanufacturing and one or more levels of warehousinglinking the production, storage, and consumption activities for spare parts and finished goods inventory - See: pipeline stock
flexible manufacturing system (fms)
-A group of numerically controlled machine tools interconnected by a central control system - The various machining cells are interconnected via loading and unloading stations by an automated transport system - Operational flexibility is enhanced by the ability to execute all manufacturing tasks on numerous product designs in small quantities and with faster delivery
buffer profile
-A group of parts with similar lead time, variability, control, and order management characteristics
discussion list
-A group of people who have all signed up on a listserver to participate via email in the discussion of a given topic
generally accepted manufacturing practices (gamp)
-A group of practices and principles, independent of any one set of techniques, that define how a manufacturing company should be managed - Included are such elements as the need for data accuracy, frequent communication between marketing and manufacturing, top management control of the production planning process (sales and operations planning process), systems capable of validly translating highlevel plans into detailed schedules, and so on - Today, GAMP includes such paradigms as justintime, theory of constraints, total quality management, business process reengineering, and supply chain management
assembly
-A group of subassemblies and/or parts that are put together and that constitute a major subdivision for the final product - An assembly may be an end item or a component of a higher level assembly
bond (performance)
-A guarantee of satisfactory work completion that is executed in connection with a contract and that secures the performance and fulfillment of all the undertakings, covenants, terms, conditions, and agreements contained in the contract
automated storage/retrieval system (as/rs)
-A highdensity rack inventory storage system that uses vehicles to automatically load and unload the racks
collective bargaining
-A highly regulated system established to control conflict between labor and management - It defines and specifies the rules and procedures of initiating, negotiating, maintaining, changing, andterminatingthe labormanagement relationship
affirmative action
-A hiring policy that requires employers to analyze the workforce for underrepresentation of protected classes - It involves recruiting minorities and members of protected classes, changing management attitudes or prejudices toward them, removing discriminatory employment practices, and giving preferential treatment to protected classes
inventory record
-A history of the inventory transactions of a specific material
fixed interval review system
-A hybrid inventory system in which the inventory analyst reviews the inventory position at fixed time periods - If the inventory level is found to be above a preset reorder point, no action is taken - If the inventory level is at or belowthe reorder point, the analyst orders a variable quantity equal to M minus x, where M is a maximum stock level and x is the current quantity on hand and on order (if any) - This hybrid system does not reorder at every review interval - It therefore differs from the fixedinterval order system, which automatically places an order whenever inventory is reviewed
customs trade partnership against terrorism (c tpat)
-A joint governmentbusiness endeavor for imports (not exports) to increase the security of supply chains and US borders - Initiated by US Customs, C TPAT involves voluntary cooperation of supply chain participants such as importers, carriers, brokers, warehouse operators, and manufacturers - Participants audit their logistical system security and answer a security questionnaire in exchange for a likely (but not guaranteed) faster customs clearing process and fewer inspections
historical analogy
-A judgmental forecasting technique based on identifying a sales history that is analogous to a present situation, such as the sales history of a similar product, and using that past pattern to predict future sales - See: management estimation
hypertext markup language (html)
-A language used to create web pages that permits the userto create text, hypertext links, and multimedia elements within the page -HTML is not a programming language, but a way to format text
container
-A large box in which commodities to be shipped are placed
hub
-A large manufacturer or retailer doing business with many trading partners
group layout
-A layout in which machine groups are arranged to process families of parts with similar characteristics
echelon
-A level of supply chain nodes - For example, a supply chain with two independent factory warehouses and nine wholesale warehouses delivering product to 350 retail stores is a supply chain with three echelons between the factory and the end customer - One echelon consists of the two independent factory warehouses, one echelon consists of the nine wholesale warehouses, and one echelon consists of the 350 retail stores - Each echelon adds operating expense, holds inventory, adds to the cycle time, and expects to make a profit - See: disintermediation
disability
-A limitation of capability that limits functioning within a plant or a company
balanced scorecard
-A list of financial and operational measurements used to evaluate organizational or supply chain performance - The dimensions of the balanced scorecard might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives - It formally connects overall objectives, strategies, and measurements - Each dimension has goals and measurements
invoice
-A list of goods shipped bythesuppliertothe buyer that states prices, quantities, and other costs
where used list
-A listing of every parent item that calls for a given component, and the respective quantity required, from a billofmaterial file - See: implosion - wholesaler
indented where used
-A listing of every parent item, and the respective quantities required, as well as each of their respective parent items, continuing until the ultimate end item or level 0 item is referenced - Each of these parent items calls for a given component item in a billofmaterial file - The component item is shown closest to the left margin of the listing, with each parent indented to the right and each of their respective parents indented even farther to the right
bill of resources
-A listing of the required capacity and key resources needed to manufacture one unit of a selected item orfamily - Roughcut capacity planning uses these bills to calculate the approximate capacity requirements of the master production schedule - Resource planning may use a form of this bill
general warehouse
-A location where goods usually are stored for long periods of time - The primary purpose is to protect goods until they are needed - The general warehouse is used because either the producer or owner does not have the necessary warehouse space or the cost of storage is better offsite - Usually use of a general warehouse involves minimal handling, movement, and transportation
fault tree analysis
-A logical approach to identify the probabilities and frequencies of events in a system that are most critical to uninterrupted and safe operation - This analysis may include failure mode effects analysis (determining the result of component failure interactions toward system safety) and techniques for human error prediction
current reality tree (crt)
-A logicbased tool for using causeandeffect relationships to determine root problems that cause the observed undesirable effects of the system - See: root cause analysis
blanket purchase order
-A longterm commitment to a supplierfor material against which shortterm releases will be generated to satisfy requirements - Often blanket orders cover only one item with predetermined delivery dates - Syn: blanket order, standing order
fixed order quantity
-A lotsizingtechnique in MRP or inventory management thatwill always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof, if net requirements for the period exceed the fixed order quantity
fixed period requirements
-A lotsizingtechnique that sets the order quantity to the demand for a given number of periods - See: discrete order quantity
functional manager
-A manager responsible for a specialized department such as accounting or engineering
basic producer
-A manufacturer that uses natural resources to produce materials for other manufacturing - A typical example is a steel company that processes iron ore and produces steel ingots other examples are companies that make wood pulp, glass, and rubber
blend order
-A manufacturing order to a blending department authorizing it to mix the ingredients of a product - See: assembly order
fabrication order
-A manufacturing order to a componentmaking department authorizing it to produce component parts - See: batch card, manufacturing order
cellular manufacturing
-A manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell
assemblyorder
-A manufacturingorderto an assembly department authorizing it to put components together into an assembly - See: blend order
consumer market
-A market composed of individuals and families who buy products and services for consumption - See: government market, industrial market, institutional market
differentiated oligopoly
-A market in which a few companies produce partially differentiated products or services that are marketed within a given geographical area - Differentiation may be based on quality, features, styling, or services offered along with the product - See: industry structure types
buyer's market
-A market in which goods can easily be secured and in which the economic forces of business tend to cause goods to be priced at the purchaser's estimate of value
industrial market
-A market where most or all customers are individuals or businesses that buy products to produce other goods and services - Syn: business market, producer market - See: consumer market, government market, institutional market
customer relationship management (crm)
-A marketing philosophy based on putting the customer first - Involves the collection and analysis of information designed for sales and marketing decision support (in contrast to enterprise resources planning information) to understand and support existing and potential customer needs - Includes account management, catalog and order entry, payment processing, credits and adjustments, and otherfunctions - Syn: customer relations management
by product
-A material of value produced as a residual of or incidental to the production process - The ratio of byproduct to primary product is usually predictable - Byproducts may be recycled, sold asis, or used for other purposes - See: coproduct
decision matrix
-A matrix used by teams to evaluate problems or possible solutions - For example, after drawing the matrix, the team lists the solutions in the far left vertical column - Next, the team selects criteria to rate the possible solutions, writingthem across the top row - Third, each possible solution is rated on a scale of 1 to 5 for each criterion and the rating recorded in the corresponding grid - Finally, the ratings of all the criteria for each possible solution are added to determine its total score - The total score is then used to help decide which solution deserves the most attention
enterprise resources portal
-A means for a company to share, exchange, or transact information with an external business partner using internetbased technologies - An enterprise resources portal is often associated with an enterprise resources planning system, which can be configured to share or present such information via an internet portal or hyperlink - An enterprise resources portal can also be one means of implementing a private trading exchange
generic processing
-A means of developing routings or processes for the manufacture of products through a family relationship, usually accomplished by means of tabular data to establish interrelationships - It is especially prevalent in the manufacture of raw material such as steel, aluminum, or chemicals
decision table
-A means of displaying logical conditions in an array that graphically illustrates actions associated with stated conditions
days sale outstanding
-A measure of the average number of days a company takes to collect revenue after a sale has been made, calculated as the total accounts receivable divided by the average daily sales rate
consumer price index
-A measure of the overall level of prices - It attempts to relate the cost of buying a specific set of goods and services with the cost of buying the same set of goods and services during an earlier time period
efficiency
-A measurement (usually expressed as a percentage) of the actual output relative to the standard output expected - Efficiency measures how well something is performing relative to existing standards in contrast, productivity measures output relative to a specific input (e -g -, tons/labor hour) - Efficiency is the ratio of (1) actual units produced to the standard rate of production expected in a time period, or (2) standard hours produced to actual hours worked (taking longer means less efficiency), or (3) actual dollar volume of output to a standard dollar volume in a time period
cumulative system
-A method for planning and controlling production that makes use of cumulative MRP, cumulative requirements, and cumulative counts
demand driven material requirements planning
-A method for planning material needs that enables a company to build more closely to actual market requirements
decision tree
-A method of analysis that evaluates alternative decisions in a treelike structure to estimate values and/or probabilities - Decision trees take into account the time value of future earnings by using a rollback concept - Calculations are started at the far righthand side, and then are traced back through the branches to identify the appropriate decision
hierarchical database
-A method of constructing a database that requires related record types to be linked in treelike structures where no child record can have more than one physical parent record
equivalent unit cost
-A method of costing that uses the total cost incurred for all like units for a period of time divided by the equivalent units completed during the same time period
incremental analysis
-A method of economic analysis in which the cost of a single additional unit is compared to its revenue - When the net contribution of an additional unit is zero, total contribution is maximized
bottom up estimating
-A method of estimation that involves disaggregating a piece of work into components, estimating each component requirement, and adding the resulting times and/or costs to arrive at the estimate for the whole
gain sharing
-A method of incentive compensation where employees share collectively in savings from productivity improvements - Syn: gain sharing plans, gain sharing plansSyn: gain sharing
base stock system
-A method of inventory control that includes most of the systems in practice as special cases - In this system, when an order is received for any item, it is used as a picking ticket, and duplicate copies, called replenishment orders, are sent back to all stages of production to initiate replenishment of stocks - Positive or negative orders, called base stock orders, are also used from time to time to adjust the level of the base stock of each item - In actual practice, replenishment orders are usually accumulated when they are issued and are released at regular intervals
fixed order period system
-A method of inventory planning that measures actual inventory levels at regular intervals of time,either an order is placed everytime, or a check of inventory levels is made and an order placed if needed - Often the quantity ordered varies from period to period as inventory is restored to a predetermined level - See: fixed order quantity system
last in, first out (lifo)
-A method of inventory valuation for accounting purposes - The accounting assumption is that the most recently received (last in) is the first to be used or sold (first out) for costing purposes, but there is not necessarily any relationship with the actual physical movement of specific items - See: average cost systems
first in, first out (fifo)
-A method of inventory valuation for accounting purposes - The accounting assumption is that the oldest inventory (first in) is the first to be used (first out), but there is no necessary relationship with the actual physical movement of specific items - See: firstcomefirstserved rule, average cost system
discounted cash flow
-A method of investment analysis in which future cash flows are converted, or discounted, to their value at the present time - The net presentvalue of an item is estimated to be the sum of all discounted future cash flows
kanban
-A method of justintime production that uses standard containers or lot sizes with a single card attached to each - It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers - The Japanese word kanban, loosely translated, means card, billboard, or sign, but other signaling devices such as colored golf balls have also been used - The term is often used synonymously for the specific scheduling system developed and used by the Toyota Corporation in Japan - See: move card, production card, synchronized production
computer aided process planning
-A method of process planning in which a computer system assists in the development of manufacturing process plans (defining operation sequences, machine and tooling requirements, cut parameters, part tolerances, inspection criteria, and other items) - Artificial intelligence and classification and coding systems may be used in the generation of the process plan
green manufacturing
-A method of producing a good or service that minimizes external cost and pollution - It includes design for reuse, design for disassembly, and design for remanufacture - See: environmentally responsible business
categorical plan
-A method of selecting and evaluating suppliers that considers input from many departments and functions within the buyer's organization and systematically categorizes that input - Engineering, production, quality assurance, and other functional areas evaluate all suppliers for critical factors within their respective scopes of responsibility - For example, engineering would develop a category evaluating suppliers' design flexibility - Rankings are developed across categories, performance ratings are obtained, and supplier selections are made - See: weightedpoint plan
dynamic programming
-A method of sequential decision making in which the result of the decision at each stage affords the best possible means to exploit the expected range of likely (yet unpredictable) outcomes in the following decisionmaking stages
contribution margin pricing
-A method of setting prices based on the contribution margin - It provides a ceiling and a floor between which the price setter operates - The ceiling is the target selling pricewhat the sellerwould like to getand the floor is the total variable costs of the product using traditional accounting
cross sourcing
-A method of sourcing that uses one supplier in one area of business for a product or service and uses a different supplier in a different area of business for similar products or services - The suppliers can then compete forfuture business
description by performance characteristics
-A method to identify a product or service by specifying the performance required
description by brand
-A method to identify a product or service required requesting by brand usually means the product or service provides some advantage over other brands
description by market grade/industry standard
-A method to identify a product or service required when there is a high level of understanding between user and supplier
5 forces model forces model of competition
-A methodology for analyzing competitive pressures in a market and assessingthe strength and importance of each of those pressures
center of gravity approach
-A methodology for locating distribution centers at approximately the location representing the minimum transportation costs between the plants, the distribution centers, and the markets, in order to maximize revenue, centerofgravity modelsSyn: gravity models
american customer satisfaction index
-A metric cosponsored by the University of Michigan and the American Society for Quality that measures the satisfaction of US customers with the goods and services available to them from both domestic and foreign origins
complete and ontime delivery
-A metric defining customer service - To be considered as complete and on time, all items in the orderin the correct quantity and with the correct line items must arrive on time
hybrid purchasing organization
-A mix of the centralized and decentralized purchasing formatusually decentralized at the corporate level and centralized at the business unit level
information system architecture
-A model of how the organization operates regarding information -The model considers four factors: (1) organizational functions (2) communication of coordination requirements (3) data modeling needs and (4) management and control structures - The architecture of the information system should be aligned with and match the architecture of the organization
industrial revolution
-A movement to the use of factories and machines and away from activities done by hand without mechanical assistance
batch sensitivity factor
-A multiplier that is used forthe rounding rules in determiningthe number of batches required to produce a given amount of product
economic infrastructure
-A nation's networks for supporting commerce, including transportation, communications, and finance
demand
-A need for a particular product or component - The demand could come from any number of sources (e -g -, a customer order or forecast, an interplant requirement, a branch warehouse request for a service part, or the manufacturing of another product) - At the finished goods level, demand data is usually different from sales data because demand does not necessarily result in sales (i -e -, if there is no stock, there will be no sale) - There are generally up to four components of demand: cyclical component, random component, seasonal component, and trend component - See: booked orders
annualized contract
-A negotiated agreement with a supplier for one year that sets pricing, helps ensure a continuous supply of material, and provides the supplierwith estimated future requirements
graphical evaluation and review technique (gert)
-A network analysis technique that allows for probability distributions of activity durations and also conditions underwhich some activities may not be carried out - See: critical path method, network analysis, program evaluation and review technique
extranet
-A network connection to a partner's network using secure information processing and internet protocols to do business
centralized computer network
-A network in which there is one central computer (or possibly more) linked to all others in a given enterprise
critical path method (cpm)
-A network planning technique for the analysis of a project's completion time used for planning and controlling the activities in a project - By showing each of these activities and their associated times, the critical path, which identifies those elements that actually constrain the total time for the project, can be determined - See: critical chain method, network analysis, critical activity, critical path
decentralized computer network
-A network where there is no central computer or computers linked to all other computers in the group
global reporting initiative (gri)
-A networkbased organization that pioneered the world's most widely used sustainability reporting framework
continuous process improvement (cpi)
-A neverending effort to expose and eliminate root causes of problems smallstep improvement as opposed to bigstep improvement - Syn: continuous improvement - See: kaizen
institute of industrial engineers (iie)
-A nonprofit educational organization whose members are interested in the field of industrial engineering
institute for supply management (ism)
-A nonprofit society for purchasing managers and others, formerly the National Association of Purchasing Management (NAPM)
carcass
-A nonserviceable item obtained from a customerthat is intended for use in remanufacturing
allowed time
-A normal time value increased by appropriate allowances
council of supply chain management professionals (cscmp)
-A notforprofit worldwide organization of logistics and supply chain managers - It provides educational opportunities through a variety of activities, count chartSyn: c chart
item number
-A number that serves to uniquely identify an item - Syn: part number, product number, stock code, stock number
group classification code
-A part of a material classification technique that provides for designation of characteristics by successively lowerorder groups of code - Classification may denote function, type of material, size, shape, and so forth
equal protection clause
-A part of the Fourteenth Amendmentto the US Constitution requiring similar treatment of citizens in similar circumstances
firm master production schedule
-A part of the master production schedule in which changes can occur only rarely
composite part
-A part that represents operations common to a family or group of parts controlled by group technology - Tools, jigs, and dies are used forthe composite part therefore, any parts of that family can be processed with the same operations and tooling - The goal is to reduce setup costs
labor productivity
-A partial productivity measure in which the rate of output of a worker or group of workers per unit of time is compared to an established standard or rate of output - Labor productivity can be expressed as output per unit of time or output per labor hour - See: machine productivity, productivity
exemplar
-A particularly effective practice that should be imitated
bill back
-A penalty imposed on the supplier because a late delivery or poor quality resulted in extra costs
delivery reliability
-A performance criterion that measures how consistently goods and services are delivered on, or before, the promised time
delivery speed
-A performance criterion that measures how quickly a product or service can be delivered once the demand is identified
business cycle
-A period of time marked by longterm fluctuations in the total level of economic activity - Measures of business cycle activity include the rate of unemployment and the level of gross domestic product, business environmentSyn: operating environment
job status
-A periodic report showing the plan for completing a job (usually the requirements and completion date) and the progress of the job against that plan
exempt employee
-A person filling an exempt position - See: exempt positions
external customer
-A person or organization that receives a good, a service, or information but is not part of the organization supplying it - See: customer, internal customer
change agent
-A person who facilitates change within an organization - This person may or may not be within the organization and may or may not be the initiator of the change
customs broker
-A person who manages the paperwork required for international shipping and tracks and moves the shipments through the proper channels
distribution planner
-A person who plans inventories and schedules replenishment shipments forthe distribution centers
consumer
-A person who purchases a good or service for his or her own use (not for resale) - See: customer
economy of scale
-A phenomenon whereby larger volumes of production reduce unit cost by distributing fixed costs over a larger quantity - See: economy of scope
just in time (jit)
-A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity - It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery, and includes all stages of conversion from raw material onward - The primary elements of just in time are to have only the required inventory when needed to improve quality to zero defects to reduce lead times by reducing setup times, queue lengths, and lot sizes to incrementally revise the operations themselves and to accomplish these activities at minimum cost - In the broad sense, it applies to all forms of manufacturing job shop, process, and repetitive and to many service industries as well - Syn: shortcycle manufacturing, stockless production, zero inventories
capital asset
-A physical object that is held by an organization for its production potential and that costs more than some threshold value
integrating mechanism
-A physical, organizational, or informational entity that allows people and functions to interact freely by transcending boundaries
first expiry first out (fefo)
-A picking methodology assuring that the usage shelf life of items is optimized - Years ago, first in, first out (FIFO) was satisfactory as the shelflife days for items often didn't vary and FIFO often coincided with the expiry dates - However, retesting is frequently done to extend shelflife dates on some lots or batches, while other lots may have typical shelflife dates shortened because of quality or processes - Thus, FEFO was introduced by software vendors to provide this picking methodology for use with shelflife controlled items
accumulation bin
-A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor - Syn: assembly bin
business strategy
-A plan for choosing how to compete - Business strategies can be classified into three general categories: (1) least cost, (2) differentiation, and (3) focus
aggregate plan
-A plan that includes budgeted levels of finished goods, inventory, production backlogs, and changes in the workforce to support the production strategy - Aggregated information (e -g -, product line, family) ratherthan product information is used, hence the name aggregate plan
firm planned order (fpo)
-A planned order that can be frozen in quantity and time - The computer is not allowed to change it automatically this is the responsibility of the planner in charge of the item that is being planned - This technique can aid planners working with MRP systems to respond to material and capacity problems by firming up selected planned orders - In addition, firm planned orders are the normal method of stating the master production schedule - See: planning time fence
count point
-A point in a flow of material or sequence of operations at which parts, subassemblies, or assemblies are counted as being complete - Count points may be designated at the ends of lines or upon removal from a work center, but most often they are designated as the points at which material transfers from one department to another - Syn: pay point
express warranty
-A positive representation made by a sellerconcerning the nature, character, use, and purpose of goodsthat induces the buyer to buy and on which the seller intends the buyerto depend
cash discount
-A price break offered for the early payment of an invoice
competitive bid
-A price offering by one company that a buyer will consider along with price offerings from other companies
cost plus contract
-A pricing method where the buyer agrees to pay the seller all the acceptable costs of the product or service up to a maximum cost plus a fixed fee - Syn: costtype contract
law of diminishing marginal returns
-A principle stating that as the quantity of a variable factor applied to a fixed factor is increased, the additional units of the variable factorwill result in smaller and smaller increases in output - See: marginal product
earliest due date (edd)
-A priority rule that sequences the jobs in a queue according to their (operation or job) due dates
intranet
-A privately owned network that makes use of internet technology and applications to meet the needs of an enterprise - It resides entirely within a department or company and provides communication and access to information, similar to the internet, for internal use only
failure mode analysis (fma)
-A procedure to determine which malfunction symptoms appear immediately before or after the failure of a critical parameter in a system - After all the possible causes are listed for each symptom, the product is designed to eliminate the problems
continuous replenishment
-A process by which a supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these sales (for example, by size or color) without stockouts and without receiving replenishment orders - The result is a lowering of associated costs and an improvement in inventory turnover - See: rapid replenishment, vendormanaged inventory
in control process
-A process in which the statistical measure being evaluated is in a state of statistical control (i -e -, the variations among the observed sampling results can be attributed to a constant system of chance causes) - Ant: outofcontrol process
design simplification
-A process of reducing the number of pieces in a product or machine, eliminating features that are seldom needed, and eliminating steps in the production process -order
customer service management (csm)
-A process that enables a business to offer postpurchase service and information to the customer
demand management process
-A process that weighs both customer demand and a firm's output capabilities, and tries to balance the two - Demand management is made up of planning demand, communicating demand, influencing demand, and prioritizing demand
aggregate planning
-A process to develop tactical plans to support the organization's business plan - Aggregate planning usually includes the development, analysis, and maintenance of plansfortotal sales, total production, targeted inventory, and targeted customer backlog for families of products - The production plan is the result of the aggregate planning process - Two approaches to aggregate planning exist: (1) production planning and (2) sales and operations planning - See: production planning, sales and operations planning, sales plan
action plan
-A process to obtain results identified by one or more objectives, action reportSyn: action message - activationPutting a resource to work
design for manufacture and assembly (dfma)
-A product development approach that involves the manufacturing function in the initial stages of product design to ensure ease of manufacturing and assembly - See: early manufacturing involvement
cargo
-A product shipped in an aircraft, railroad car, ship, barge, or truck
end item
-A product sold as a completed item or repair part any item subject to a customer order or sales forecast - Syn: end product, finished good, finished product - See: good
homogeneous product
-A product that is effectively identical from producer to producer
custom product
-A product that is made to meet the requirements of specific customers
co product
-A product that is usually manufactured together or sequentially because of product or process similarities - See: byproduct
assemble yo order(ato)
-A production environment where a good or service can be assembled after receipt of a customer's order - The key components (bulk, semi finished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly orfinishing process are planned and usually stocked in anticipation of a customer order - Receipt of an order initiates assembly of the customized product - This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components -
continuous production
-A production system in which the productive equipment is organized and sequenced according to the steps involved to produce the product - This term denotes that material flow is continuous during the production process - The routing of the jobs is fixed and setups are seldom changed - Syn: continuous flow (production), continuous process, continuous manufacturing - See: mass production, project manufacturing
intelligent agent
-A program that regularly gathers information without the owner being present
dock to stock
-A program through which specific quality and packaging requirements are met before the product is released - Prequalified product is shipped directly into the customer's inventory - Docktoofuse inventory, stockless purchasing
agile project management
-A project management methodology often employed in environments where the output of the project is the result of a process or a series of subprojects with unstructured results - An agile project follows a more iterative path to completion than a traditional project - The agile project management methodology is most common in software development
activity on arrow network (aoa)
-A project management network diagram in which the passage of time, via activities, takes place on the arrows - The start of an activity is represented by the tail of the arrow, and the completion of the activity is represented by the tip of the arrow - The sequence of the arrows represents the sequence of activities - Arrows are connected by nodes, which are usually circles - Syn: activityonarc network, arrow diagram method, eventonarrow network
contingent project
-A project that can be accepted only if one or more other projects are accepted first - See: independent project, mutually exclusive project
coupon
-A promotional device offering special savings when a product is purchased
hypertext transfer protocol (http)
-A protocol that tells computers how to communicate with each other - Most internet addresses begin with http://
file transfer protocol (ftp)
-A protocol used to transfer files over the internet
grandfather clause
-A provision that exempts existing entities from a newly created regulation
continuous flow distribution
-A pull system diverting products in response to customer requirements while keeping distribution costs low
confirming order
-A purchase order issued to a supplier before the usual purchase document, which lists the goods or services and terms of an order placed orally or otherwise
family contracts
-A purchase order that groups families of similar parts together to obtain pricing advantages and a continuous supply of material - FAQsAbbreviation for frequently asked questions
capacity buying
-A purchasing practice whereby a company commits to a supplier for a given amount of its capacity per unit of time - Subsequently, schedules for individual items are given to the supplier in quantities to match the committed level of capacity - Syn: buying capacity
build up forecasts
-A qualitative forecasting technique in which individuals who are familiar with specific market segments estimate the demand within these segments - The overall forecast then is obtained by calculating the sum of the forecasts for these segments
delphi method
-A qualitative forecasting technique where the opinions of experts are combined in a series of iterations - The results of each iteration are used to develop the next, so that convergence of the experts' opinions is obtained - See: management estimation, panel consensus
full baldrige approach
-A quality award program modeled afterthe Malcolm Baldrige National Quality Award and using the same criteria
imperfection
-A quality characteristic's departure from its intended level or state - An imperfection does not affect the conformance of a product or service to its specification requirements or usability - See: blemish, defect, nonconformity
first article inspection
-A quality check on the first component run after a new setup has been completed - Syn: firstpiece inspection
grid technique
-A quantitative model used for locating plants and warehouses by findingthe least cost point, given the positions of raw materials and markets
constant
-A quantity that has a fixed value - Ant: variable
active tag
-A radio frequency identification tag that broadcasts information and contains its own power source - See: radio frequency identification (RFID)
flatcar
-A railroad carwithout sides used for hauling machinery
kaizen blitz
-A rapid improvement of a limited process area for example, a production cell - Part of the improvement team consists of workers in that area - The objectives are to use innovative thinking to eliminate nonvalueadded work and to immediately implement the changes within a week or less - Ownership of the improvement by the area work team and the development of the team's problemsolving skills are additional benefits - See: kaizen event
joint rate
-A rate for a route involving two or more carriers to move a shipment
blanket rate
-A rate that does not depend on the distance cargo is transported
commodity rate
-A rate to ship a specific commodity across a specific origindestination pairing
absentee rate
-A ratio comparing the number of employeedays lost with the total number of available employeedays of employment during some base period, usually one month
cost benefit ratio
-A ratio of total measurable benefits to the initial capital cost - This might be used in deciding which projects to pursue in a continuous improvement effort
allowable cost
-A reasonable cost specifically permitted under Federal Acquisition Regulation (FAR) requirements
dock receipt
-A receipt recorded for a shipment received or delivered at a pier or dock -stock eliminates the costly handling of components, specifically in receiving and inspection, and enables product to move directly into production
assumed receipt
-A receiving technique based on the assumption that a shipment is as expected - Receiving personnel do not verify the delivery quantity - This technique is used to eliminate invoices
batch bill of materials
-A recipe or formula in which the statement of quantity per is based on the standard batch quantity of the parent - Syn: batch formula
anticipated delay report
-A report, normally issued by both manufacturing and purchasing to the material planning function, regarding jobs or purchase orders that will not be completed on time - This report explains why the jobs or purchases are delayed and when they will be completed - This report is an essential ingredient of the closedloop MRP system - It is normally a handwritten report - Syn: delay report
information data warehouse
-A repository (typically large) of corporate data that can be accessed using specialized query tools - This technique separates the analysis of data from the recording of data and is often used to combine data from different computing systems to make information access more convenient and coherent - See: data warehouse
datawarehouse
-A repository of data that has been specially prepared to support decisionmaking applications - Syn: decisionsupport data - See: information data warehouse
everyday low prices (edlp)
-A retail strategy of keeping prices low across all products or services as opposed to having sales at certain times
indirect retail locations
-A retailer who sells products to the public but who buys products indirectly through a thirdparty distributor, rather than directly from the seller
configuration audit
-A review of the product against the engineering specifications to determine whether the engineering documentation is accurate, up to date, and representative of the components, subsystems, or systems being produced
engineering change
-A revision to a drawing or design released by engineering to modify or correct a part - The request for the change can be from a customer or from production, quality control, another department, or a supplier - Syn: engineering change notice, engineering change order
incentive
-A reward, financial or otherwise, that compensates a worker for high or continued performance above standard - An incentive is also a motivating influence to induce effort above normal
capacity bill procedure
-A roughcut capacity planning method that takes into account any shifts in product mix - Bill of material and routing information are required with direct laborhour or machinehour data available for each operation - See: bill of labor
capacity planning using overall factors (cpof)
-A roughcut capacity planning technique - The master schedule items and quantities are multiplied by the total time required to build each item to provide the total number of hours to produce the schedule - Historical work center percentages are then applied to the total number of hours to provide an estimate of the hours perwork centerto support the master schedule - This technique eliminates the need for engineered time standards - Syn: overall factors - See: bill of resources, capacity planning, resource profile, roughcut capacity planning
alternate routing
-A routing that is usually less preferred than the primary routing but results in an identical item - Alternate routings may be maintained in the computer or offline via manual methods, but the computer software must be able to accept alternate routings for specific jobs
blanket routing
-A routing that lists groups of operations needed to produce a family of items - The items may have small differences in size, but they use the same sequence of operations - Specific times or tools for each individual item can be included
40/30/30 rule
-A rule that identifies the sources of scrap, rework, and waste as 40 percent product design, 30 percent manufacturing processing, and 30 percent from suppliers
contributory negligence
-A rule under which a defendant may escape liability if it can be shown that the plaintiff was negligent to some extent
gapped schedule
-A schedule in which every piece in a lot is finished at one work center before any piece in the lot can be processed at the succeeding work center the movement of material in complete lots, causing time gaps between the end of one operation and the beginning of the next - It is a result of using a batched schedule at each operation (work center),
final assembly schedule (fas)
-A schedule of end items to finish the product for specific customers' orders in a make to order or assembletoorder environment - It is also referred to as the finishing schedule because it may involve operations otherthan the final assembly also, it may not involve assembly (e -g -, final mixing, cutting, packaging) - The FAS is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked (or master scheduled) to the enditem level
forward scheduling
-A scheduling technique where the scheduler proceeds from a known start date and computes the completion date for an order, usually proceeding from the first operation to the last - Dates generated by this technique are generally the earliest start dates for operations - See: forward pass - Ant: back scheduling
barge
-A selfpropelled, pushed, or pulled flatbottomed ship for use in inland waterways - It is frequently used to transport bulk commodities
bar code
-A series of alternating bars and spaces printed or stamped on parts, containers, labels, or other media, representing encoded information that can be read by electronic readers - A bar code is used to facilitate timely and accurate input of data to a computer system
is014000 series standards
-A series of generic environmental management standards, developed by the International Organization for Standardization, that provide structure and systems for managing environmental compliance with legislative and regulatory requirements and affect every aspect of a company's environmental operations
customer as participant
-A service system that contains a high level of customer involvement in part of the service delivery
custom service
-A service that is created to meet the requirements of specific customers
edi for administration, commerce, and transport (edifact)
-A set of United Nations rules for electronic data interchange - These are international guidelines and standards for the electronic exchange of data regarding trade
activity based costing system
-A set of activity based cost accounting models that collectively define data on an organization's resources, activities, drivers, objects, and measurements
industry
-A set of companies providing a product or service where each company's offering is a close substitute for its competitors' offerings
executive dashboard
-A set of crossfunctional metrics for measuring company performance that indicates the health of the company - It usually includes the company's key performance indicators
econometric model
-A set of equations intended to be used simultaneously to capture the way in which dependent and independent variables are interrelated
ethical standards
-A set of guidelines for proper conduct by business professionals - For example, the ISM (formerly NAPM) provides a set of principles and standards for the proper conduct of purchasing activities
cross functional team
-A set of individuals from various departments assigned a specific task such as implementing new computer software - See: core team, cross plotSyn: scatter chart
iso 9000
-A set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements to be implemented to maintain an efficient quality system - The standards, initially published in 1987, are not specific to any particular industry, product, or service - The standards were developed by the International Organization for Standardization, known as ISO, a specialized international agency for standardization composed of the national standards bodies of 91 countries - The standards underwent major revision in 2008 and now include ISO 9000:2008 (definitions), ISO 9001:2008 (requirements), and ISO 9004:2008 (continuous improvement) - See: ISO/TS 16949, QS9000
automatic relief
-A set of inventory bookkeeping methods that automatically adjusts computerized inventory records based on a production transaction - Examples of automatic relief methods are backflushing, directdeduct, and prededuct processing
four ps
-A set of marketing tools to direct the business offering to the customer - The four Ps are product, price, place, and promotion
benchmark measures
-A set of measurements (or metrics) that is used to establish goals for improvements in processes, functions, products, and so on - Benchmark measures are often derived from otherfirms that display bestinclass achievement, bench stocksSyn: floor stocks
baseline measures
-A set of measurements (or metrics) that seeks to establish the current or starting level of performance of a process, function, product, firm, or other entity - Baseline measures are usually established before implementing improvement activities and programs, baseload demandSyn: base demand
focus group
-A set of people who are interviewed together for the purpose of collecting marketing data
job sequencing rules
-A set of priorities and conditions that specify the order in which jobs are processed because of scarce resources
application system
-A set of programs of specific instructions for processing activities needed to compute specific tasks for computer users, as opposed to operating systems that control the computer's internal operations - Examples are payroll, spreadsheets, and word processing programs - See: application software
incoterms
-A set of rules established by the International Chamber of Commerce that provides internationally recognized rules forthe interpretation of the most commonly used trade terms in foreign trade and is routinely incorporated in the contracts for the sale of goodsworldwideto provide guidance to all parties involved in the transaction
containerization
-A shipment method in which commodities are placed in containers, and after initial loading, the commodities per se are not rehandled in shipment until they are unloaded at the destination
direct store delivery (dsd)
-A shipment that bypasses the customer's warehouse and goes directly from the manufacturer's plant to the retail store
carload lot
-A shipment that qualifies for a reduced freight rate because it is greater than a specified minimum weight - Since carload rates usually include minimum rates per unit of volume, the higher LCL (less than carload) rate may be less expensive for a heavy but relatively small shipment
andon
-A sign board with signal lights used to make workers and management aware of a quality, quantity, or process problem
first order smoothing
-A single exponential smoothing a weighted moving average approach that is applied to forecasting problems where the data does not exhibit significant trend or seasonal patterns - Syn: single exponential smoothing, single smoothing
demand driven supply network
-A situation in which a customer purchase initiates realtime information flows through the supply chain that consequently cause movement of product through the network
groupthink
-A situation in which a team seizes on one solution to a problem and does not consider other viable solutions either because members are afraid of confrontation or because they convince themselves that other ideas aren't worth discussing
contract manufacturing
-A situation in which a third party makes products that are packaged under another company's label
capital intensive
-A situation in which the largest expenditure in an operation is capital as opposed to labor - See: laborintensive
external factory
-A situation where suppliers are viewed as an extension of the firm's manufacturing capabilities and capacities - The same practices and concerns that are commonly applied to the management of the firm's manufacturing system should also be applied to the management of the external factory
define, measure, analyze, improve, control (dmaic) process
-A six sigma improvement process composed of five stages: (1) Determine the nature of the problem - (2) Measure existing performance and commence recording data and facts that offer information about the underlying causes of the problem - (3) Study the information to determine the root causes of the problem - (4) Improve the process by effecting solutions to the problem - (5) Monitor the process until the solutions become ingrained
define measure analyze design verify
-A six sigma process that outlines the steps needed to create a completely new business process or product at six sigma quality levels
dog
-A slang term used to refer to a lowgrowth, lowmarketshare product - See: growth
executive information system
-A software application used by top managers, without assistance, to access information on the current organizational status
assignable cause
-A source of variation in a process that can be isolated, especially when its significantly larger magnitude or different origin readily distinguishes it from random causes of variation - Syn: special cause - See: common causes, assignable variation
additives
-A special class of ingredients characterized either by being used in minimal quantities or by being introduced into the processing cycle afterthe initial stage
die
-A special form used in generalpurpose equipment to make specific parts
consular invoice
-A special invoice used for goods being sent to the importer's country - The importing country's consulate provides the stationery - The invoice is written in the language of the importing country and may require a government employee's signature
leading indicator
-A specific business activity index that indicates future trends - For example, housing starts is a leadingindicatorforthe industry that supplies builders' hardware
field
-A specified area of a record used for a particular category of data
iso 31000
-A standard adopted by the International Organization for Standardization that outlines principles and a set of guidelines to manage risk in any endeavor - The standard includes guidelines for understanding risk, developing a risk management policy, integrating risk management into organizational processes (including accountability and responsibility), and establishing internal and external risk communication processes - ISO 31000 is not a management system standard and is not intended or appropriate for certification purposes or regulatory or contractual use
demand filter
-A standard set to monitor sales data for individual items in forecasting models - Usually set to be tripped when the demand for a period differs from the forecast by more than some number of mean absolute deviations
baseseries
-A standard succession of values of demandovertime data used in forecasting seasonal items - This series of factors is usually based on the relative level of demand duringthe corresponding period of previous years - The average value of the base series over a seasonal cycle is 1 -0 - A figure higher than 1 -0 indicates that demand forthat period is higher than average a figure less than 1 -0 indicates lessthanaverage demand - For forecasting purposes, the base series is superimposed upon the average demand and trend in demand for the item in question - Syn: base index - See: seasonal index, seasonality
iso/ts 16949
-A standard written by the International Automotive Task Force that applies only to automotive companies - It includes quality management system management responsibility resource management product realization and measurement, analysis, and improvement - See: QS 9000
baldrige lite
-A state or company quality award program modeled after the Malcolm Baldrige National Quality Award butwith a simplified application process
inventory policy
-A statement of a company's goals and approach to the management of inventories
formula
-A statement of ingredient requirements - A formula may also include processing instructions and ingredient sequencing directions - units that is, a unit equivalent to 40 feet long, 8 feet wide, and approximately 8 feet high
ending inventory
-A statement of onhand quantities or the dollar value of aSKU at the end of a period, often determined by a physical inventory
beginning inventory
-A statement of the inventory count at the end of the last period, usually from a perpetual inventory record
earned hours
-A statement reflecting the standard hours assigned for actual production reported during the period - Syn: earned volume
analysis of variance (anova)
-A statistical analysis system that estimates what portion of variation in a dependent variable is caused by variation in one or more independentvariables - It also produces a number used to infer whether any or all of the independentdependent variable relationships have statistical significance (i -e -, have not been caused by randomness in the data)
degrees of freedom
-A statistical term indicating the number of variables or data points used for testing a relationship - The greater the degree of freedom, the greater the confidence that can be placed on the statistical significance of the results
control limit
-A statistically determined line on a control chart (upper control limit or lower control limit) - If a value occurs outside this limit, the process is deemed to be out of control
certified supplier
-A status awarded to a supplier that consistently meets predetermined quality, cost, delivery, financial, and count objectives - Incoming inspection may not be required
define phase
-A step in the six sigma DMAIC process in which project goals and customer deliverables are identified - See: designmeasureanalyzeimprovecontrol process
block stacking
-A storage method in which pallets, cases, or cartons are stacked upward from the floor to whatever practical height is availablewithoutthe use of shelves
flexible specialization
-A strategy based on multiuse equipment, skilled workers, and innovative senior managers to accommodate the continuous change that occurs in the marketplace
global strategy
-A strategy that focuses on improving worldwide performance through the sales and marketing of common goods and services with minimum product variation by country - Its competitive advantage grows through selecting the best locations for operations in other countries - See: multinational strategy
buffer zone
-A stratification layer within a stock buffer used in the drumbufferrope scheduling - Typically, buffer zones are colorcoded with red, yellow, and green categories
house of quality (hoq)
-A structured process that relates customerdefined attributes to the product's technical features needed to support and generate these attributes - This technique achieves this mapping by means of a sixstep process: (1) identification of customer attributes (2) identification of supporting technical features (3) correlation of the customer attributes with the supportingtechnical features (4) assignment of priorities to the customer requirements and technical features (5) evaluation of competitive stances and competitive products and (6) identification of those technical features to be used (deployed) in the final design of the product - HOQ is part of the quality function deployment (QFD) process and forces designers to consider customer needs and the degree to which the proposed designs satisfy these needs - See: customerdefined attributes, quality function deployment
break even analysis
-A study of the number of units, or amount of time, required to recoup an investment
hawthorne effect
-A study was conducted from 1927 to 1932 in which the Hawthorne Western Electric plant systematically improved productivity by simply having management paying attention
dock to stock inventory
-A suppliercustomer relationship where specified quality and packaging requirements are met before the product is released - The product is then received directly into the customer's inventories - See: point
demand chain management
-A supply chain inventory management approach that concentrates on demand pull ratherthan supplier push inventory models
green supply chain
-A supply chain that considers environmental impacts on its operations and takes action along the supply chain to comply with environmental safety regulations and communicate this to customers and partners - See: environmentally responsible business
closed loop mrp
-A system built around material requirements planning that includes the additional planning processes of production planning (sales and operations planning), master production scheduling, and capacity requirements planning - Once this planning phase is complete and the plans have been accepted as realistic and attainable, the execution processes come into play - These processes include the manufacturing control processes of inputoutput (capacity) measurement and detailed scheduling and dispatching, as well as anticipated delay reports from both the plant and suppliers, supplier scheduling, and so on - The term closed loop implies not only that each of these processes is included in the overall system, but also that feedback is provided by the execution processes so the planning can be kept valid at all times
block system
-A system for selecting items to be cycle counted by a group or block of numbers - blowthroughSyn: phantom bill of material
hypertext
-A system of relating information without using menus or hierarchies
company culture
-A system of values, beliefs, and behaviors inherent in a company - To optimize business performance, top management must define and create the necessary culture
automated process controls system
-A system that can measure the performance of a process, compare the result to predetermined standards, and then make adjustments to the process
automatic identification system (ais)
-A system that can use various means, including bar code scanning and radio frequencies, to sense and load data in a computer
electronic bill presentment and payment (ebpp)
-A system that connects the bill issuer, bill payer, and the payer's bank to facilitate electronic payment - Payment is usually by credit card
automated quality control inspection system
-A system that employs machines to help inspect products for quality control
control system
-A system that has as its primary function the collection and analysis of feedback from a given set of functions for the purpose of controlling the functions - Control may be implemented by monitoring or systematically modifying the parameters or policies used in those functions, or by preparing control reports that initiate useful action with respect to significant deviations and exceptions
automated assembly system
-A system that produces completed products or assemblies without the contribution of direct labor
inventory effectiveness index
-A system to identify nonvalueadding inventory and make it visible - The index provides a process to measure nonvalueadding inventory and sell or write it off to keep working capital in control
decision theory
-A systematic approach to making decisions, particularly when uncertainty is present
flowcharting
-A systems analysis tool that graphically presents a procedure - Symbols are used to represent operations, transportations, inspections, storages, delays, and equipment
force field analysis
-A technique for analyzing the forces that will aid or hinder an organization in reaching an objective - An arrow pointing to an objective is drawn down the middle of a piece of paper - The factors that will aid the objective's achievement (called the driving forces) are listed on the left side of the arrow the factors that will hinder its achievement (called the restraining forces) are listed on the right side of the arrow
back scheduling
-A technique for calculating operation start dates and due dates - The schedule is computed starting with the due date forthe order and working backward to determine the required start date and/or due dates for each operation - Syn: backward scheduling - Ant: forward scheduling
input/output control (i/o)
-A technique for capacity control where planned and actual inputs and planned and actual outputs of a work center are monitored - Planned inputs and outputs for each work center are developed by capacity requirements planning and approved by manufacturing management - Actual input is compared to planned input to identify when work center output might vary from the plan because work is not available at the work center - Actual output is also compared to planned output to identify problems within the work center - Syn: input/output analysis - See: capacity control
design review
-A technique for evaluating a proposed design to ensure that the design: (1) is supported by adequate materials and materials that are available on a timely basis (2) will perform successfully during use (3) can be manufactured at low cost and (4) is suitable for prompt field maintenance
computer numerical control (cnc)
-A technique in which a machine tool controller uses a computer or microprocessor to store and execute numerical instructions
brainstorming
-A technique that teams use to generate ideas on a particular subject - Each person on the team is asked to think creatively and write down as many ideas as possible - The ideas are not discussed or reviewed until after the brainstorming session
arrow diagram
-A technique to determine the relationships and precedence of different activities and the time estimate for project completion - The technique is useful in identifying potential problems and improvement opportunities
factory within a factory
-A technique to improve management focus and overall productivity by creating autonomous business units within a larger physical plant - Syn: plant within a plant
fishbone analysis
-A technique to organize the elements of a problem or situation to aid in the determination of the causes of the problem or situation - The analysis relates the effect of the environment to the several possible sources of the problem, fishbone chartSy n: causeandeffect diagram, fishbone diagramSyn: causeandeffect diagram
interrelationship digraph
-A technique used to define how factors relate to one another - Complex multivariable problems or desired outcomes can be displayed with their interrelated factors - The logical and often causal relationships between the factors can be illustrated
fault isolation
-A technique used to identify the cause of a defect
date effectivity
-A technique used to identify the effective date of a configuration change - A component change is controlled by the effective date within the bill of material for the unchanged parent part number
commercial off the shelf (cots)
-A term describing computer software made available for sale by commercial developers
80 20
-A term referring to the Pareto principle - The principle suggests that most effects come from relatively few causes that is, 80 percent of the effects (or sales or costs) come from 20 percent of the possible causes (or items) - See: ABC classification
cold chain
-A term referring to the storage, transfer, and supply chain of temperaturecontrolled products - Industries in the cold chain include food and agriculture, pharmaceuticals, and chemicals
ideal quality
-A term used by Genichi Taguchi to refer to the target value of a particular measure - Loss to society increases with the square of the deviation of an actual product from this ideal point
big q, little q
-A term used to contrast the difference between managingfor quality in all business processes and products (big Q) and managing for quality in a limited capacity—traditionally in only factory products and processes (little q)
betatest
-A term used to describe the pilot evaluation of a good or service (i -e -, the second evaluation)
fitness for use
-A term used to indicate that a good or service fits the customer's defined purpose for that good or service
failure costs
-A term used within the cost of poor quality model to include both internal and external failure costs
central limittheorem
-A theorem that states that a distribution consisting of sample means can be assumed to be normally distributed, even if the population from which the samples are drawn is not normally distributed
dedicated contract carrier
-A third party hauler that works exclusively for a single customer
delivery window
-A time framewithin which goods or services should be delivered
kaizen event
-A timeboxed set of activities carried out by the cell team during the week of cell implementation - The kaizen event is an implementation arm of a lean manufacturing program - See: kaizen blitz
capacity requirements plan
-A timephased display of present and future load (capacity required) on all resources, based on the planned and released supply authorizations (i -e -, orders) and the planned capacity (capacity available) of these resources over a span of time - See: load profile
gap analysis
-A tool designed to assess the difference that exists between a service that is offered and customer expectations
cause and effect diagram
-A tool for analyzing process dispersion - It is also referred to as the Ishikawa diagram (because Kaoru Ishikawa developed it) and the fishbone diagram (because the complete diagram resembles a fish skeleton) - The diagram illustrates the main causes and subcauses leading to an effect (symptom) - The causeandeffect diagram is one of the seven tools of quality - Syn: fishbone chart, Ishikawa diagram
lead management tool
-A tool used by sales personnel that helps them follow a specified sales process to close deals
checklist
-A tool used to ensure that important steps or actions in an operation have been taken - Checklists contain items that are important or relevant to an issue or situation
affinity diagram
-A total quality management tool with which employees working in silence generate ideas and later categorize these ideas
equivalent units
-A translation of inventories into equivalent finished goods units or of inventories exploded back to raw materials for period end valuation of inventories - An equivalent unit can be the sum of several partially completed units - Two units 50 percent completed are equivalent to one unit 100 percent completed
automated guided vehicle system (agvs)
-A transportation network that automatically routes one or more material handling devices, such as carts or pallet trucks, and positions them at predetermined destinations without operator intervention
diagnostic journey and remedial journey
-A two phase investigation used by teams to solve chronic quality problems - In the first phasethe diagnostic journeythe team journeys from the symptom of a chronic problem to its cause - In the second phase
double declining balance depreciation
-A type of accelerated depreciation - See: depreciation
expert system
-A type of artificial intelligence computer system that mimics human experts by using rules and heuristics rather than deterministic algorithms
economic order quantity (eoq)
-A type of fixed order quantity model that determines the amount of an item to be purchased or manufactured at one time - The intent is to minimize the combined costs of acquiring and carrying inventory - The basic formula is:
causal forecast
-A type of forecasting that uses causeandeffect associations to predict and explain relationships between the independent and dependent variables - An example of a causal model is an econometric model used to explain the demand for housing starts based on consumer base, interest rates, personal incomes, and land availability
base point pricing
-A type of geographic pricing policy where customers order from designated shipping points without freight charges if they are located within a specified distance from the base point - Customers outside area boundaries pay base price plus transportation costs from the nearest base point
continuous manufacturing
-A type of manufacturing process that is dedicated to the production of a very narrow range of standard products - The rate of product change and new product information is very low - Significant investment in highly specialized equipment allows for a high volume of production at the lowest manufacturing cost - Thus, unit sales volumes are very large, and price is almost always a key orderwinning criterion - Examples of items produced by a continuous process include gasoline, steel, fertilizer, glass, and paper - Syn: continuous production, continuous processSyn: continuous production
flatbed
-A type of truck trailer that has a floor but no enclosure - Sideboards ortiedowns are used to prevent cargo from falling off
exponential smoothing forecast
-A type of weighted moving average forecasting technique in which past observations are geometrically discounted according to their age - The heaviest weight is assigned to the most recent data - The smoothing is termed exponential because data points are weighted in accordance with an exponential function of their age - The technique makes use of a smoothing constant to apply to the difference between the most recent forecast and the critical sales data, thus avoiding the necessity of carrying historical sales data - The approach can be used for data that exhibits no trend or seasonal patterns - Higher order exponential smoothing models can be used for data with either (or both) trend and seasonality
activity identifier
-A unique alphanumeric code that differentiates one project activity from other activities
coefficient of correlation
-A value used to express the relationship between two variables, whether there is a strong or weak correlation - The coefficient of correlation varies from 0 to 1 - Values close to 0 indicate no relationship or a weak relationship, and values close to 1 indicate a strong relationship - The existence of a relationship does not prove causality
index
-A value, expressed as a percentage, giving the relationship of a measurement to a base value - A result of 100 is average, while numbers greater than 100 are above average and those less than 100 are below average
critical process parameters
-A variable or a set of variables that dominates the other variables - Focusing on these variables will yield the greatest return in investment in quality control and improvement
exogenous variable
-A variable whose values are determined by considerations outside the model in question
continuous variable
-A variable, such as height, temperature, or weight, that can be measured along a continuous scale - See: discrete variable
discrete variable
-A variable, such as numberof defects, that can take on only certain values (such as integers) - See: continuous variable
central point scheduling
-A variant of scheduling that employs both forward and backward scheduling, startingfrom the scheduled start date of a particular operation
cost ratio plan
-A variation of the weightedpoint plan of supplier evaluation and selection - The cost ratio is obtained by dividing the bid price by the weighted scores determined by the weightedpoint plan - This procedure determines the true costs by taking into account compensating factors - Suppliers are selected and/or evaluated based on the lowest cost ratio
beta release
-A version of a product sent to certain customers priorto general release in orderto receive feedback on product performance
functional silo
-A view of an organization where each department is operated independently of the others - Each group is referred to as a silo - See: silo effect
control board
-A visual means of showing machine loading or project planning, usually a variation of the basic Gantt chart - Syn: dispatch(ing) board, planning board, schedule board - See: schedule chart
engineering drawings
-A visual representation of the dimensional characteristics of a part or assembly at some stage of manufacture
ansi z.10
-A voluntary consensus standard on occupational health and safety management systems - It uses recognized management system principles in order to be compatible with quality and environmental management system standards such as the ISO 9000 and IS014000 Series
intermediately positioned warehouse
-A warehouse located between customers and manufacturing plants to provide increased customer service and reduced distribution cost
carbon offsets
-A way to compensate for an organization's carbon dioxide emissions, either by reducing carbon dioxide emissions elsewhere in the business or by funding projects intended to improve the environment, such as renewable energy or forest conservation - This funding can be in the form of credits purchased on an exchange to meet compliance legislation, cap and trade systems, or as a voluntary effort
cp
-A widely used process capability index - It is calculated by dividing the difference between the upper specification limit (USL) and the lower specification limit (LSL) by 6 times the standard deviation (s) or p
dedicated capacity
-A work center that is designated to produce a single item or a limited number of similar items - Equipment that is dedicated may be special equipment or may be grouped generalpurpose equipment committed to a composite part
internet
-A worldwide network of computers belonging to businesses, governments, and universities that enables users to share information in the form of files and to send electronic messages and have access to a tremendous store of information
firm offer
-A written offer to buy or sell goods that will be held open for a stipulated period
hold order
-A written order directing that certain operations or work be interrupted or terminated pending a change in design or other disposition of the material - Syn: stop work order
backlog
-AII the customer orders received but not yet shipped - Sometimes referred to as open orders orthe order board - See: order backlog, past due order
external environment
-AII the factors that exist outside the boundary of the organization that have the possibility of affecting any part of the organization
c tpat
-Abbreviation for CustomsTrade Partnership Against Terrorism
cif
-Abbreviation for cost, insurance, freight
crm
-Abbreviation for customer relationship management and customer relations management
dfma
-Abbreviation for design for manufacture and assembly - the remedial journeythe team journeys from the cause to its remedy
i2m
-Abbreviation for integrated internet marketing
b7
-Abbreviation for the basic seven tools of quality
generally accepted accounting principles (gaap)
-Accounting practices that conform to conventions, rules, and procedures that are generally accepted by the accounting profession
constrained optimization
-Achieving the best possible solution to a problem in terms of a specified objective function and a given set of constraints
bit
-Acronym for binary digit - It can have only the values 0or1
capital budgeting
-Actions relatingto the planning and financing of capital outlays for such purposes as the purchase of new equipment, the introduction of new product lines, and the modernization of plant facilities
actual demand
-Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution) - Actual demand nets against or consumes the forecast, depending upon the rules chosen over a time horizon - For example, actual demand will totally replace forecast inside the soldout customer order backlog horizon (often called the demand time fence) but will net against the forecast outside this horizon based on the chosen forecast consumption rule
actual volume
-Actual output expressed as a volume of capacity - It is used in the calculation of variances when compared to demonstrated capacity (practical capacity) or budgeted capacity
lead capacity strategy
-Adding capacity to a resource in anticipation of increased future demand - This is done to ensure the ability to satisfy market demand when increase occurs
anticipation inventories
-Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations
design for x(dfx)
-Also referred to as design for excellence - A design process that ensures the outcome is manufacturable, maintainable, costeffective, and of high quality - designing in quality versus inspecting in quality
fixed period quantity
-An MRP lotsizingtechnique that sets the lot size equal to the net requirements for a given number of periods
bucketless system
-An MRP, DRP, or other time phased system in which all timephased data is processed, stored, and usually displayed using dated records rather than defined time periods (buckets)
bucketed system
-An MRP, DRP, or other timephased system in which all time phased data is accumulated into time periods called buckets - If the period of accumulation is one week, then the system is said to have weekly buckets
conwip
-An abbreviation for Constant Work in Process - A pull methodology that limits the amount of workinprocess inventory in a system by releasing work only at the start of a sequence when other work is completed attheend of that sequence
attachment
-An accessory that has to be physically attached to the product - See: feature
cost of goods sold (cogs)
-An accounting classification useful for determining the amount of direct materials, direct labor, and allocated overhead associated with the products sold during a given period of time - See: cost of sales
book inventory
-An accounting definition of inventory units orvalue obtained from perpetual inventory records rather than by actual count
conformance
-An affirmative indication or judgment that a product or service has met the requirements of a relevant specification, contract, or regulation
container security initiative (csi)
-An agreement that allows US customs agents in foreign ports to identify and inspect highrisk containers prior to their being loaded on a ship bound to a US port
full truckload (ftl)
-An agreement to ship a minimum of an entire truckload or container load to a single customer - The cargo is typically homogenous and stays on the same vehicle from the origin to the destination
discount
-An allowance or deduction granted by the seller to the buyer, usually when the buyer meets certain stipulated conditions that reduce the price of the products purchased - A quantity discount is an allowance determined by the quantity or value ofthe purchase - A cash discount is an allowance extended to encourage payment of an invoice on or before a stated date - A trade discount is a deduction from an established price for goods or services made by the seller to those engaged in certain businesses - See: price break
contribution margin
-An amount equal to the difference between sales revenue and variable costs
decoupling inventory
-An amount of inventory maintained between entities in a manufacturing or distribution network to create independence between processes or entities - The objective of decoupling inventory is to disconnect the rate of use from the rate of supply of the item - See: buffer
escalation
-An amount or percentage by which a contract price may be adjusted if specified contingencies occur, such as changes in the supplier's raw material or labor costs
debt
-An amount owed to creditors - It is generally equal to the total assets in a company less the equity - See: liabilities
feasibility study
-An analysis designed to establish the practicality and cost justification of a given project and, if it appears to be advisable to do so, to determine the direction of subsequent project efforts
competitive analysis
-An analysis of a competitor that includes its strategies, capabilities, prices, and costs
change request
-An application to change scopes of work, budgets, and/or schedules
distributed numerical control
-An approach to automated machining in which each machine tool has its own dedicated microcomputer or computer numerical control (CNC) - Each machine tool's CNC is connected via a network with a minicomputerthat handles distributed processing between the host mainframe computer and the CNC - This minicomputer handles part program transfers and machine status data collection - This approach is considered more advanced than direct numerical control, in which several machine tools are tied directly to a central computer
design forsixsigma
-An approach to designing products and processes that attempts to ensure the firm can provide products or services that meet six sigma quality levels - These quality levels correspond to approximately 3 -4 defects per million opportunities
curve fitting
-An approach to forecasting based on a straight line, polynomial, or other curve that describes some historical time series data
harmonic smoothing
-An approach to forecasting based on fitting some set of sine and cosine functions to the historical pattern of a time series - Syn: seasonal harmonics
absorption costing
-An approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production - The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs - Syn: allocation costing - See: activity based costing
gravity models
-An approach used for locating facilities at the center of gravity - Gravity is determined by the product of the masses of two bodies divided by the square of the distance between them - In gravity models, the population of each neighborhood in the region is used as the mass, and driving time is used as the distance
feeder workstations
-An area of manufacture whose products feed a subsequent work area
dimensions of quality
-An aspect of quality that is specified to enhance the ability to define quality - The most commonly used list for products was created by David Garvin - His dimensions are aesthetics, conformance, durability, features, perceived quality, performance, reliability, and serviceability - The most commonly used list for service quality was created by Parasuraman, Zeithamel, and Berry - This list is assurance, availability, completeness, empathy, pleasantness, professionalism, responsiveness, service reliability, tangibles, and timeliness, direct costingSyn: variable costing
convertible security
-An asset (stock or bond) that may be changed for another asset at the owner's request
general warranty
-An assurance that the product is fit for use - See: special warranty, warranty
electronic signature
-An authentication that validates a transaction by means of an authorization code to identify an individual or group
inspection order
-An authorization to an inspection department or group to perform an inspection operation
customer order servicing system
-An automated system for order entry where orders are keyed into a local terminal and a billofmaterial translator converts the catalog ordering numbers into required manufacturing part numbers and due dates forthe MRP system - Advanced systems contain customer information, sales history, forecasting information, and product option compatibility checks to facilitate order processing, cleaning up orders before placing a demand on the manufacturing system - Syn: configuration system, sales orderconfiguration
flexible machine center (fmc)
-An automated system that usually consists of computer numerical control machines with robots loading and unloading the parts conveyed into, and through, the system - Its purpose is to provide quicker throughput, changeovers, setups, and so forth to enable the manufacturing of multiple products
experience curve pricing
-An average cost pricing method that uses an estimate of future average costs based on an experience (learning) curve
european union (eu)
-An economic and political union of European countries created to strengthen economies and lower trade barriers
cooperative training
-An educational process in which students alternate formal studies with actual onthejob experience - Successful completion of the offcampus experience may be a prerequisite for graduation from the program of study
digital cash or money
-An electronic currency equivalent of currency or coins
costengineer
-An engineerwhose judgment and experience are used in the application of scientific principles and techniques to problems of cost estimation and cost control in business planning, profitability analysis, project management and production planning, scheduling, and control
foreign freight forwarder
-An entity that picks up goods at the production site and coordinates transport to the foreign customer's location
internet of things (lot)
-An environment in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring humantohuman or humantocomputer interaction - This allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration between the physical world and computerbased systems
finite forward scheduling
-An equipment scheduling technique that builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits - A Gantt chart may be used with this technique - See: finite loading
forecast
-An estimate of future demand - A forecast can be constructed using quantitative methods, qualitative methods, or a combination of methods, and it can be based on extrinsic (external) or intrinsic (internal) factors - Various forecasting techniques attempt to predict one or more of the four components of demand: cyclical, random, seasonal, and trend - Syn: sales forecast - See: BoxJenkins model, exponential smoothing forecast, extrinsic forecasting method, intrinsic forecasting method, moving average forecast, qualitative forecasting method, quantitative forecasting method
aggregate forecast
-An estimate of sales, often timephased, for a grouping of products or product families produced by a facility or firm - Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning (orfor sales and operations planning) purposes - See: product group forecast
diversification strategy
-An expansion of the scope of the product line to exploit new markets - A key objective of a diversification strategy is to spread the company's risk over several product lines in case there should be a downturn in any one product's market
fixed cost
-An expenditure that does not vary with the production volume for example, rent, property tax, and salaries of certain personnel
funnel experiment
-An experiment that demonstrates the effects of tampering - Marbles are dropped through a funnel in an attempt to hit a flatsurfaced target below - The experiment shows that adjusting a stable process to compensate for an undesirable result or an extraordinarily good result will produce output that is worse than if the process had been left alone - See: tampering
bullwhip effect
-An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain - Inventory can quickly move from being backordered to being excess - This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain - The bullwhip effect can be eliminated by synchronizing the supply chain
alpha release
-An extremely early version of a product released to obtain feedback about its suitability
global trade identification number (gtin)
-An identification number that uniquely identifies all products and services that are sold, delivered, and invoiced at any point in the supply chain - GTINs are typically found at points of sale and on cases and pallets of products in a distribution orwarehouse environment
feature code
-An identifying code assigned to a distinct product feature that may contain one or more specific part number configurations
blemish
-An imperfection that is severe enough to be noticed but should not cause any real impairment with respect to intended normal or reasonably foreseeable use - See: defect, imperfection, nonconformity
improvement program champion
-An implementation expert in SCOR who sells the SCOR improvement program to the executive team - See: champion
key points
-An important operations step where at least one of the following occurs: (1) A crucial process step is carried out that can ultimately make or break the job (2) safety is involved and/or (3) the step is made easier to do - Part of standardized work
import license
-An importing country's government document that provides an importer with the express authorization to import a particular product
anti dumping duty
-An imposed responsibility whereby a company sells imported goods at prices below what is charged in its domestic market
job enlargement
-An increase in the number of tasks that an employee performs - Job enlargement is associated with the design of jobs, particularly production jobs, and its purpose is to reduce employee dissatisfaction
fixed reorder quantity inventory model
-An independent demand item management model where the order quantity is the expected demand quantity during the replenishment lead time - Fixed reorder quantity models assume the existence of some form of a perpetual inventory record or some form of physical tracking (e -g -, a twobin system that is able to determine when the reorder point is reached)
economic indicator
-An index of total business activities at the regional, national, and global levels
cash to cash cycle time
-An indicator of how efficiently a company manages its assets to improve cash flow - Calculated as inventory days plus accounts receivable days minus accounts payable days - See: cash conversion cycle
capital structure ratio
-An indicator of whether or not a company has the ability to retire its longterm debts
freight broker
-An individual or organization who finds appropriate carriers for shippers needing transportation - The broker helps negotiate terms and administers most of the documentation
buyer
-An individual whose functions may include supplier selection, negotiation, order placement, supplierfollowup, measurement and control of supplier performance, value analysis, and evaluation of new materials and processes - In some companies, the functions of order placement and supplier followup are handled by the supplier scheduler
blend formula
-An ingredient list for a product in process industries - See: batch card, manufacturing order, mix ticket
bleeding edge
-An innovative process that may be unusual enough to pose a risk to the customer or client
goodwill
-An intangible item that is recorded on a company's books only as the result of a purchase - Generally, it is inseparable from the enterprise but makes the company more valuable for example, a good reputation
knowledge management
-An integrated approach used by organizations to capture, share, develop, and use organizational knowledge - This information is used to more effectively produce product, interface with customers, and navigate through competitive markets
international air transport association (lata)
-An international industry trade group that represents the interests of the airline industry
harmonized system classification codes
-An internationally standardized description of goods that uses a system of numbers to provide increasingly detailed classification and descriptions
electronic market
-An internetbased market where most sales occur electronically - electronic product
exitinterview
-An interview given to an employee who is leaving the company - The purpose is to find out why a person is leaving, what was liked and disliked about the job and the company, and what changes would make the department and the company a better place to work
cycle counting
-An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year - A cycle inventory count is usually taken on a regular, defined basis (often more frequently for highvalue or fastmoving items and less frequently for lowvalue or slowmoving items) - Most effective cycle counting systems require the counting of a certain number of items every workday with each item counted at a prescribed frequency - The key purpose of cycle counting is to identify items in error, thus triggering research, identification, and elimination of the cause of the errors
inventory receipt
-An inventory record transaction that records the receipt or arrival of inventory into physical stores by increasingthe inventory onhand balance by the received quantity - Often associated with receipt of a purchase or production order quantity
hybrid inventory system
-An inventory system combining features of the fixed reorder quantity inventory model and the fixed reorder cycle inventory model - Features of the fixed reorder cycle inventory model and the fixed reorder quantity inventory model can be combined in many different ways - For example, in the order pointperiodic review combination system, an order is placed if the inventory level drops below a specified level before the review date if not, the order quantity is determined at the next review date - Another hybrid inventory system is the optional replenishment model - See: fixed reorder cycle inventory model, fixed reorder quantity inventory model, optional replenishment model, order point system
fixed order quantity system
-An inventory system, such as economic order quantity, in which the same order quantity is used from order to order - The time between orders (order period) then varies from order to order - Syn: fixed reorder quantity inventory model - See: fixed order period system
commodity
-An item that is traded in commerce - The term usually implies an undifferentiated product competing primarily on price and availability
audit
-An objective comparison of actions to policies and plans
commercial invoice
-An official document indicating the names of the seller and buyer, the product being shipped, and its value - The document is provided by the seller
inflation
-An ongoing rise in the overall level of prices - Inflation reduces the purchasing power of money
horizontal marketplace
-An online marketplace used by buyers and sellers from multiple industries - This marketplace lowers prices by lowering transaction costs
future order
-An order entered for shipment at some future date
flow order
-An order filled by production made over time and checked by a cumulative count until the flow order quantity is complete, as opposed to beingfilled by moving material through production as an integral lot
floating order point
-An order point that is responsive to changes in demand or to changes in lead time
discrete order quantity
-An order quantity that represents an integer number of periods of demand - Most MRP systems employ discrete order quantities - See: fixedperiod requirements, least total cost, least unit cost, lotforlot, part period balancing, period order quantity, Wagner
blank check purchase order
-An order with a signed blank check attached that is usually valid only up to a specific amount
can order point
-An ordering system used when multiple items are ordered from one vendor - The canorder point is a point higher than the original order point - When any one of the items triggers an order by reaching the mustorder point, all items below their canorder point are also ordered - The canorder point is set by considering the additional holding cost that would be incurred should the item be ordered early, capability studySyn: process capability analysis
broker
-An organization that helps match carriers to freight, adding value by helping the shipper and carrier obtain better rates and more fully utilize their capacity and equipment
horizontally integrated firm
-An organization that seeks to produce or sell a type of product in numerous markets - Horizontal integration exists when an organization produces or sells similar products in various geographical locations - Horizontal integration in marketing occurs more frequently than horizontal integration in production - See: vertically integrated firm
export management company (emc)
-An organization that serves as a sales department for a domestic organization's international markets, earning commissions on completed sales - EMCs select distribution channels and markets, arrange promotional campaigns, analyze customer credit information, advise on payment terms, administer documentation, and collect international debts - They may also arrange transportation, provide warehouse space, manage export inventory, and provide breakbulk services
export trading company (etc)
-An organization that typically purchases goods outright in one country for resale in a different country at a profit - The organization locates buyers and handles all inland and overseas transportation, documentation, and foreign government requirements - Some may perform these services without formally taking title to the goods
functional organizational structure
-An organizational structure based on functional specialization, such as sales, engineering, manufacturing, finance, and accounting
centralized marketing system
-An organizational structure in which a central marketing group manages functionally divided areas such as advertising, sales, and marketing research
hybrid organizational structure
-An organizational structure that embodies multiple organizational forms (functional, product, or geographical) simultaneously - For example, some functions may be centralized (such as finance and accounting), whereas others may be duplicated geographically (such as sales)
action message
-An output of a system that identifies the need for, and the type of action to be taken to correct, a current or potential problem - Examples of action messages in an MRP system include release order, reschedule in, reschedule out, and cancel - Syn: exception message, action report
backorder
-An unfilled customer order or commitment - A backorder is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand - See: stockout
blocked operation
-An upstream work center that is not permitted to produce because of a full queue at a downstream work center or because no kanban authorizes production
forensic procurement
-Analyzing root causeandeffect troubleshooting
customer defection analysis
-Analyzingthe customers who have stopped buying to determine why
critical activity
-Any activity on the critical path of a project an activity with no slack time (i -e -, any delay in the activity will delay project completion) - See: critical path, critical path method
conflict of interest
-Any business activity, personal or companyrelated, that interferes with a company's goals or that entails unethical or illegal actions
host computer
-Any computer on a network that is a repository for services available to other computers on the network - It is common to have one host machine provide several services such as access to the internet via the World Wide Web
expansion
-Any increase in the capacity of a plant, facility, or unit, usually by added investment - The scope of this increase extends from the elimination of problem areas to the complete replacement of an existing facility with a larger one
excess inventory
-Any inventory in the system that exceeds the minimum amount necessary to achieve the desired throughput rate atthe constraint or that exceeds the minimum amount necessary to achieve the desired due date performance - Total inventory = productive inventory + protective inventory + excess inventory
dynamic lot sizing
-Any lotsizing technique that creates an order quantity subject to continuous recomputation
hazardous materials
-Any material that a country's relevant government agency has classified as a risk to human, animal, or environmental health or to propertyeither on its own or due to interaction with other elements - A government's transportation authority may allow transportation only when proper permits and safety precautions are implemented - Similarly, a government may regulate or supervise hazardous material disposal - Categories include explosives, flammable or corrosive liquids or gasses, biohazards, and radioactive materials
data
-Any representations, such as alphabetic or numeric characters, to which meaning can be assigned
channels of distribution
-Any series of firms or individuals that participates in the flow of goods and services from the raw material supplier and producerto the final user or consumer - See: distribution channel
counter trade
-Any transaction in which partial or full payment is made with goods instead of money - This often applies in international trade
cybermarketing
-Any type of internetbased promotion - Many marketing managers use the term to refer to any type of computerbased marketing
enterprise
-Any undertaking, venture, initiative, or business organization with a defined mission
deliverable
-Any unique and verifiable product or result that is needed to complete a process or project
item
-Any unique manufactured or purchased part, material, intermediate, subassembly, or product
cost control
-Applying procedures that monitor the progress of operations against authorized budgets and taking action to achieve minimal costs, cost driverSyn: driver (first definition)
ergonomics
-Approach to job design that focuses on the interactions between the human operator and such traditional environmental elements as atmospheric contaminants, heat, light, sound, and all tools and equipment
finished good waivers
-Approvals for deviation from normal product specifications
order modifiers
-Are used to convert the calculated order quantity into practical quantity for ordering purposes - Example include: Minimum Order Quantity, Maximum Order Quantity, Multiple Order Quantity -
foreign trade zone (ftz)
-Areas supervised by US Customs and Border Protection that are considered to be outside US territory - Material in the zone is not subject to duty taxes, which are payable when the material is moved outside the zone for consumption - There is no limit on the time material may remain in the zone - Internationally, similar areas are called free trade zones
assembly parts list
-As used in the manufacturing process, a list of all parts (and subassemblies) that make up a particular assembly - See: batch card, manufacturing order
fixed assets
-Assets acquired for use within a company having an estimated useful life of one year or more
interleaving
-Assigning multiple tasks to be performed concurrently it often involves the assignment of multiple picking orders to a single pickerto pick concurrently
finite loading
-Assigning no more work to a work center than the work center can be expected to execute in a given time period - The specific term usually refers to a computertechnique that involves calculating shop priority revisions in order to level load operation by operation - Syn: finite scheduling - See: drumbufferrope
aps optimization
-Attempts to find the best result with linear programming using defined constraints
certification audits
-Audits occurring within registration processes (e -g -, for ISO 9000:2000)
apparent authority
-Authority perceived by a third party to flow from a principal to an ostensible agent when in fact no agency relationship exists
autonomation
-Automated shutdown of a line, process, or machine upon detection of an abnormality or defect
flexible automation
-Automation that provides short setup times and the ability to switch quickly from one product to another
average daily usage (adu)
-Average usage of a part, component, or good on a daily basis
critical point backflush
-Backflush performed at a specific point in the manufacturing process, at a critical operation, or at an operation where key components are consumed
accountability
-Being answerable for, but not necessarily personally charged with, doing the work - Accountability cannot be delegated, but it can be shared
competitive benchmarking
-Benchmarking a product or service against competitors - Syn: performance benchmarking - See: benchmarking
functional benchmarking
-Benchmarking a single function within an organization rather than the entire organization
hoshin planning
-Breakthrough planning - A Japanese strategic planning process in which a company develops up to four vision statements that indicate where the company should be in the next five years - Company goals and work plans are developed based on the vision statements - Periodic audits are then conducted to monitor progress
bonded warehouse
-Buildings or parts of buildings designated by the US Secretary of the Treasury for storing imported merchandise, operated under US Customs supervision
core competencies
-Bundles of skills or knowledge sets that enable a firm to provide the greatest level of value to its customers in a way that is difficult for competitors to emulate and that provides for future growth - Core competencies are embodied in the skills of the workers and in the organization - They are developed through collective learning, communication, and commitment to work across levels and functions in the organization and with the customers and suppliers - For example, a core competency could be the capability of a firm to coordinate and harmonize diverse production skills and multiple technologies - To illustrate, advanced casting processes for making steel require the integration of machine design with sophisticated sensors to track temperature and speed, and the sensors require mathematical modeling of heat transfer - For rapid and effective development of such a process, materials scientists must work closely with machine designers, software engineers, process specialists, and operating personnel - Core competencies are not directly related to the product or market
business to consumer sales (b2c)
-Business being conducted between businesses and final consumers, largely overthe internet - It includes traditional brick and mortar businesses that also offer products online and businesses that trade exclusively on the internet
business to business commerce
-Business conducted over the internet between businesses - The implication is that this connectivity will cause businesses to transform themselves via supply chain management to become virtual organizations reducing costs, improving quality, reducing delivery lead time, and improving duedate performance
industrial buyers
-Buyers who purchase materials mainly for conversion
adjustable capacity
-Capacity, such as labor or tools, that can be changed in the short term
detention
-Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time - See: demurrage, express
exclusive use
-Carrier vehicles assigned for the exclusive use of a particular shipper
common causes
-Causes of variation that are inherent in a process over time - They affect every outcome of the process and everyone working in the process - Syn: random cause - See: assignable cause, assignable variation, common cause variability
customer contact centers
-Centers that combine phone centers and web contact services to enable customers to contactthe center 24 hours a day via phone, web, or email
big data
-Collecting, storing, and processing massive amounts of data for the purpose of converting it into useful information
consolidation warehouses
-Collection points that receive lessthantruckload (LTL) shipments from regional sources and then ship them in cargo load or truckload quantities to a manufacturing facility
commercial speech
-Communication that is primarily for a business purpose - Such speech is protected underthe First Amendmentto the US Constitution but to a lesser degree than noncommercial speech
electronic communities
-Communities of people who communicate exclusively electronically
freight carriers
-Companies that move cargo via truck, rail, air, or sea
financial benchmarking
-Comparing one company's financial results to those of another company - This type of benchmarking need not involve direct contact between the initiator company and the target company, as many financial records are publicly available - See: benchmarking
automated information system (als)
-Computer hardware and software configured to automate calculating, computing, sequencing, storing, retrieving, displaying, or communicating, or to otherwise manipulate data and textual material to provide information
interactive scheduling
-Computer scheduling where the process is either automatic or manually interrupted to allow the scheduler the opportunity to review and change the schedule
distributed systems
-Computer systems in multiple locations throughout an organization, working in a cooperative fashion, with the system at each location primarily serving the needs of that location but also able to receive and supply information from other systems within a network
design for the environment (dfe)
-Considering health, safety, and environmental aspects of a product during the design and development phase of product development
cost tradeoff
-Considering the advantages and disadvantages of one method over another, such as different avenues of distribution or providing customer service
co managed inventory (cmi)
-Continuous replenishment where the manufacturer is responsible for managing the inventory of standard merchandise and the retailer manages promotional items, combined lead timeSyn: cumulative lead time
futures
-Contracts for the sale and delivery of commodities at a future time, made with the intention that no commodity be delivered or received immediately
chargeback provisions
-Contractual terms specifying how a company may charge a supplier for failure to perform
export compliance
-Cooperating with export rules regarding packaging and documentation
capacity related costs
-Costs generally related to increasing (or decreasing) capacity in the medium to longrange time horizon - Personnel costs include hiring and training of direct laborers, supervisors, and support personnel in the areas related to the capacity increase - Equipment purchases to increase capacity are also considered - In contrast, costs related to decreasing capacity include layoffs, the fixed overhead spread over fewer units, the impact of low morale, and the inefficiencies of lower production levels
indirect costs
-Costs that are not directly incurred by a particular job or operation - Certain utility costs, such as plant heating, are often indirect - An indirect cost is typically distributed to the product through the overhead rates
decoupling
-Creating independence between supply and use of material - Commonly denotes allocating inventory between operations so that fluctuations in the production rate of the supplying operation do not constrain the production or use rates of the next operation
cubage
-Cubic volume of space being used or available for shipping or storage
information
-Data that has been interpreted and that meets the need of one or more managers
order date
-Date an order is to be finished
decisions under risk
-Decision problems in which the analyst elects to consider several possible futures, the probabilities of which can be estimated
lateness
-Delivery date minus due date - Lateness may be positive or, in the case of early jobs, negative - See: earliness, tardiness
item demand
-Demand disaggregated into specific configurations of goods or services - See: item
abnormal demand
-Demand in any period that is outside the limits established by management policy - This demand may come from a new customer or from existing customers whose own demand is increasing or decreasing - Care must betaken in evaluating the nature of the demand: Is it a volume change? Is it a change in product mix? Is it related to the timing of the order? See: outlier
dependent demand
-Demand that is directly related to or derived from the billofmaterial structure for other items or end products - Such demands are therefore calculated and need not and should not be forecast - A given inventory item may have both dependent and independent demand at any given time - For example, a part may simultaneously be the component of an assembly and sold as a service part - See: independent demand
aggregate demand
-Demand that is grouped (e -g -, all sedans) for making forecasts or plans - See: aggregate forecast
correlated demands
-Demands that consistently vary in the same direction because of the relationship between the items demanded
facility layout
-Describes where machines and utilities will be located in a facility, as well as the arrangement of processes
engineering standard
-Design ortest guidelines intended to promote the design, production, and test of a part, component, or product in a manner that promotes standardization, ease of maintenance, consistency, adequacy of test procedures, versatility of design, ease of production and field service, and minimization of the number of different tools and special tools required
free/foreign trade zone (ftz)
-Designated areas within a country that are considered to be outside the country - Material in the zone is not subject to duties and taxes until the material is moved outside the zone for consumption - There is no limit on the time material may remain in the zone - Commonly referred to as foreign trade zone internationally and free trade zone in the United States
historical labor standard
-Determined by studying actual past labor data for the operation of interest - HLLAbbreviation for highlevel language
certification
-Documentation of competency by a supplier or by an organization, such as ISO 9000 certification - See: supplier certification, ISO 9000
earnings before taxes (ebt)
-Earnings before interest and taxes minus interest charges
industry structure types
-Economists have developed models of the types of competition faced by various firms - These types are: (1) Pure monopoly - Only one firm provides a particular product or service - The monopoly may be regulated or unregulated - (2) Pure oligopoly - A few companies produce essentially the same product or service and market it within a given area - A company is forced to price its product at the going rate unless it can differentiate its product - (3) Differentiated oligopoly - A few companies produce partially differentiated products or services that are marketed within a given area - Differentiation may be based on quality, features, styling, or services offered along with the product - (4) Monopolistic competition - Many competitors offer partially differentiated products or services - Most competitors focus on market segments where they can meet customers' needs somewhat better than their competitors - (5) Pure competition - Many competitors offer undifferentiated products or services
infrastructural elements
-Elements of a strategy including decision rules, policies, personnel guidelines, and organizational structure
design for the supply chain
-Enhancement of a firm's product design in consideration of the issues that will arise in the supply chain, from raw materials to the final stage of the product's life cycle
cranes and hoists
-Equipment capable of moving items up and down or side to side
international procurement office (ipo)
-Establishes a global presence for a company by providing localized supply management services in a region that is strategically important - This management approach is a longterm commitment that takes advantage of a region's language and cultural capabilities to use trusted local staff to execute procurement activities that add value to the overall supply chain - Such tasks as local supplier development, contract negotiations, quality audits, and best practice operations provide reduced dependence on third parties and improve overall efficiency and costs
full cost pricing
-Establishing price at some markup over the full cost (absorption costing) - Full costing includes direct manufacturing as well as applied overhead
estimate at completion (eac)
-Estimated cost of an activity or project when the defined scope of work will be finished - It is the actual cost to date plus estimate to complete for uncompleted activities
extrapolation
-Estimation of the future value of some data series based on past observations - Statistical forecasting is a common example - Syn: projection
estimate to complete (etc)
-Expected cost to complete all remaining work for an activity or project
expense
-Expenditures of shortterm value, including depreciation, as opposed to land and otherfixed capital - See: overhead
call center
-Facility housing personnel who respond to customer phone queries - These personnel may provide customer service ortechnical support - Call center services may be inhouse or outsourced - CAMAcronym for computeraided manufacturing
fair labor standards act (flsa)
-Federal law that governs the definitions of management and labor and establishes wage payment, hours worked, and other employment practices
field finished goods
-Finished goods kept in distribution centers orwarehouses
fivess
-Five terms beginning with S used to create a workplace suitable for lean production: sort, simplify, scrub, standardize, and sustain - Sort means to separate needed items from unneeded ones and remove the latter - Simplify means to neatly arrange items for use - Scrub means to clean up the work area - Standardize means to sort, simplify, and scrub daily - Sustain means to always follow the first four Ss - Sometimes referred to by the Japanese equivalents: seiri, seiton, seiso, seiketsu, and shitsuke
fixed saefty stock
-Fixed amount of safety stock based upon judgement or assumed stock level calculations - Is set at aggergate, not individual item level - Is set to 0 for items that are not regularly kept -
consumer's risk (b)
-For a given sampling plan, the probability of acceptance of a lot, the quality of which has a designated numerical value representing a level that is worse than some threshold value - See: type II error
demand forecasting
-Forecasting the demand for a particular good, component, or service
configuration management system
-Formal procedures to identify and document the physical characteristics of a product or project, control changes, and support an audit to verify conformance
fourth party logistics (4pl)
-Fourth party logistics differs from thirdparty logistics in the following ways:(1) the 4PL organization is often a separate entity formed by a joint venture or other long term contract between a client and one or more partners (2) the 4PL organization is an interface between the client and multiple logistics services providers (3) ideally, all aspects of the client's supply chain are managed by the 4PL organization and (4) it is possible for a major 3PL organization to form a 4PL organization within its existing structure
enterprise resources planning (erp)
-Framework for organizing, defining, and standardizingthe business processes necessary to effectively plan and control an organization so the
inspection ticket
-Frequently used as a synonym for an inspection order more properly, a reporting of an inspection function performed
exempt
-Generally, a classification of employees/ jobs forwhich compensation is not determined by extending the recorded hours worked by an hourly rate (e -g -, pay is specified at an annual or monthly rate) - Exempt employees include most professionals, administrative and management personnel, and sales representatives - Specifically, the term refers to and is fully defined by the US Department of Labor Fair Labor Standards Act, which regulates minimum wages and overtime for nonexempt employees - See: exempt positions, nonexempt positions
durable goods
-Generally, any goods whose continuous serviceability is likely to exceed three years (e -g -, trucks, furniture) - See: consumer durable goods
attribute data
-Go/nogo information - The control charts based on attribute data include percent chart, number of affected units chart, count chart, countperunit chart, quality score chart, and demerit chart - See: attribute, attribute inspection
capacity utilization
-Goods produced, or customers served, divided by total output capacity
blue sky
-Goodwill and unsupported value of an asset above its acquisition value
contracts for the international sale of goods (cisg)
-Govern the sale of goods in the international environment - They enable exporters to avoid choiceoflaw issues
impulse response
-How quickly an estimate or forecast changes when the underlying data of the estimate has changed
black belt
-In Six Sigma, team leader for process improvement - Responsibilities include defining, measuring, and controllingthe improvement process
cost driver analysis
-In activity based cost accounting, the examination of the impact of cost drivers - The results of this analysis are useful in the continuous improvement of cost, quality, and delivery times
influence filter
-In ecommerce, a device to make stakeholders better satisfied with a website
bad debt loan ratio
-In financial management, the fraction of accounts receivable that is never recovered
freight rate
-In logistics, an established price for the transport of goods, based on any number of factors e -g -, distance, weight, measure, equipment type, package, or commodity
category management
-In marketing, an organizational structure giving managers responsibility for planning and implementing marketing systems for certain product lines
integrated change control
-In project management, a system under which any changes are coordinated across the entire project
current start date
-In project management, the present estimate of an activity's start date
coefficient of variation
-In statistics, the ratio of the standard deviation to the mean for a particular process - COFCAbbreviation for container on a railroad flatcar - COGSAbbreviation for cost of goods sold
five focusing steps
-In the theory of constraints, a process to continuously improve organizational profit by evaluating the production system and market mix to determine how to make the most profit using the system constraint - The steps consist of (1) identifying the constraint to the system, (2) deciding how to exploit the constraint to the system, (3) subordinating all nonconstraints to the constraint, (4) elevating the constraint to the system, and (5) returning to step 1 if the constraint is broken in any previous step, while not allowing inertia to set in
cube utilization
-In warehousing and transportation, a measurement of the utilization of the total storage capacity of a vehicle storage bay, container, type of warehouse equipment, or entire warehouse - The intent is to minimize unused horizontal or vertical space
defamation
-Injury to another's reputation by a public utterance: print (libel) or oral (slander)
integrated services digital network (isdn)
-International standard for using public phone lines to transmit voice and data over the same line
information system
-Interrelated computer hardware and software alongwith people and processes designed for the collection, processing, and dissemination of information for planning, decision making, and control
fluctuation inventory
-Inventory that is carried as a cushion to protect against forecast error - Syn: fluctuation stock
filling schedule
-Is a method to make MPS more flexible in FAS - Products are produced in batches and demand is analyzed before entering FAS to become a finished good
average cost system
-Is an inventory valuation for accounting purposes - A weighted average (based on quantity) of item cost is used to determine the cost of goods sold (income statement) and inventory valuation (balance sheet) - Average cost provides a valuation between lastin, firstout and firstin, firstout methods - New stock va
order promise date
-Is the date promised to customers and is based upon ATP - Usually serves as the basis for customer service metrics
box jenkins model
-Jenkins modelA forecasting method based on regression and moving average models - The model is based noton regression of independent variables, but on past observations of the item to be forecast at varying time lags and on previous error values from forecasting - See: forecast
labor efficiency variance
-Labor efficiency variance is the difference between the actual number of hours worked minus the standard number of hours worked, multiplied by the standard laborwage rate - The variance is unfavorable if the actual hours exceed the standard hours - Syn: labor usage variance
labor rate variance
-Labor rate variance is the sum of the actual wage rate minus the standard wage rate multiplied by the actual number of labor hours - The variance is unfavorable if the actual rate is greater than the standard rate
bulk storage
-Largescale storage for raw materials, intermediates, orfinished products - Each vessel normally contains a mixture of lots and materials that may be replenished and withdrawn for use or packout simultaneously
hypertext links
-Links contained within text connecting to other websites or other pages on the current site
facility planning
-Longrange plan of what capacity is needed, when itwill be needed, and whatfacilitieswill meet these requirements also, a plan for the layout of these facilities
inventory shrinkage
-Losses of inventory resulting from scrap, deterioration, pilferage, and so forth
time phased order point (tpop)
-MRP like time planning logic technique for independent demand items, where gross requirements come from a forecast, not via explosion - Can be used to plan distribution center inventories as well as to plan for service (repair) parts, because MRP logic can readily handle items with dependent demand, independent demand, or a combination of both - An approach withdrawals instead of average demand - When used in centralized distribution environments or for service parts, the planned order releases are input to the master schedule -Reduces issues with seasonality and working averages
flexible capability
-Machinery's ability to be readily adapted to processing different components on an ongoing basis
distributed inventory
-Maintaining inventory in a variety of locations to provide better customer service
information distribution
-Making needed data available to stakeholders in a timely manner
mixed model production
-Making several different parts or products in varying lot sizes so that a factory produces close to the same mix of products that will be sold that day - The mixed model schedule governs the making and the delivery of component parts, including those provided by outside suppliers - The goal is to build every model every day, according to daily demand
input control
-Management of the release of work to a work center or production facility, input/output analysisSyn: input/output control
contract administration
-Managing all aspects of a contract to guarantee that the contractor fulfills his obligations
fabrication
-Manufacturing operations for making components (as opposed to assembly operations)
general purpose machinery
-Manufacturing resources that can perform several kinds of operations, general storesSyn: supplies
differentiated marketing
-Marketing to different market segments with a different marketing strategy for each segment
grouping
-Matching like operations and running them together sequentially, thereby taking advantage of a common setup
cross shipment
-Material flow activity where materials are shipped to customers from a secondary shipping point rather than from a preferred shipping point
in transit inventory
-Material moving between two or more locations, usually separated geographically for example, finished goods being shipped from a plant to a distribution center
intermediate part
-Material processed beyond raw material and used in higherlevel items - See: component
direct material
-Material that becomes a part of the final product in measurable quantities
flexible path equipment
-Materials handling equipment such as forklifts that are not required to follow fixed paths
linear programming
-Mathematical models for solving linear optimization problems through minimization or maximization of a linearfunction subject to linear constraints - For example, in blending gasoline and other petroleum products, many intermediate distillates may be available - Prices and octane ratings as well as upper limits on capacities of input materials that can be used to produce various grades of fuel are given - The problem is to blend the various inputs in such away that (1) costwill be minimized (profit will be maximized), (2) specified optimum octane ratings will be met, and (3) the need for additional storage capacity will be avoided
input rate capacity
-Measurement that takes rates of different inputs and transforms them into a common unit to measure the input - See: capacity utilization
global measurements
-Measurements used to judge the performance of the system as a whole
inspection
-Measuring, examining, testing, or gauging one or more characteristics of a good or service and comparing the results with specified requirements to determine whether conformity is achieved for each characteristic
aps constraint management
-Method of managing workflow through a constraint to increase throughput - Techniques include: Drum Buffer Rope, Bottleneck Management, Buffer Management - Types of Buffers: Time Buffer, Stock Buffer, Protective Capacity
grievance procedures
-Methods identified in a collective bargaining agreement to resolve problems that develop or to determine if a contract has been violated
edutainment
-Mixing entertainment and education elements to make learning more fun - EEOAbbreviation for equal employment opportunity
independent demand item management models
-Models for the management of items whose demand is not strongly influenced by other items managed by the same company - These models can be characterized as follows: (1) stochastic or deterministic, depending on the variability of demand and other factors or (2) fixed quantity, fixed cycle, or hybrid (optional replenishment) - See: fixed reorder cycle inventory model, fixed reorder quantity inventory model, optional replenishment model
input/output devices
-Modems, terminals, or various pieces of equipment whose designed purpose relates to manual, mechanical, electronic, visual, or audio entry to and from the computer's processing unit
capital expenditure
-Money invested in a longterm asset i -e -, one that is expected to last longer than one year - The investment is expected to generate a stream of future benefits
capital
-Money or resources used to invest in assets that produce products
land bridge
-Moving goods over water, then land, and then water again to the final point
intrastate commerce
-Moving people or materials between points within a single state
activity attributes
-Multiple features associated with each activity to be performed - These include predecessor activities, successor activities, and resource requirements
cascaded systems
-Multistage operations - The input to each stage is the output of a preceding stage, thereby causing interdependencies among the stages
data acquisition
-Obtaining data from a source, such as a database, and communicating that data to another database or a data warehouse
import/export license
-Official authorization issued by a government allowing the shipping or delivery of a product across national boundaries
euro
-Official currency of the Eurozone, which forms a large part of the European Union - eurobondAn internationally marketed bond
fiduciary
-One having the duty to act on another's behalf in a trustworthy and confidential fashion
critical success factor
-One of a few organizational objectives whose achievement should be sufficient for organizational success
carbon emissions
-One of the five green SCOR metrics - A unit of measure currently used for greenhouse gas emissions to measure the climate impact of carbon dioxide and other global warming air emissions
activity network diagram
-One of the seven newer tools of quality - A drawing including nodes that represent operations to be performed and arrows representing precedence relationships - This drawing represents all of the activities to be finished to complete a project - Also known as a critical path diagram or PERT chart
analyze phase
-One of the six sigma phases of quality - It consists of the following steps: (a) define performance objective, (b) identify independent variables, and (c) analyze sources of variability - See: designmeasureanalyzeimprovecontrol process
design phase
-One of the six sigma phases of quality - It involves improvement project identification and selection -
capacity strategy
-One of the strategic choices a firm must make as part of its manufacturing strategy - There are three commonly recognized capacity strategies: lead, lag, and tracking - A lead capacity strategy adds capacity in anticipation of increasing demand - A lag strategy does not add capacity until the firm is operating at or beyond full capacity - A tracking strategy adds capacity in small amounts to attempt to respond to changing demand in the marketplace
cycle stock
-One of the two main conceptual components of any item inventory, the cycle stock is the most active component - The cycle stock depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received - The other conceptual component of the item inventory is the safety stock, which is a cushion of protection against uncertainty in the demand or in the replenishment lead time - Syn: cycle inventory
interplant demand
-One plant's need for a part or product that is produced by another plant or division within the same organization - Although it is not a customer order, it is usually handled by the master production scheduling system in a similar manner
agent
-One who acts on behalf of another (the principal) in dealing with a third party - Examples include a sales agent and a purchasing agent
appellant
-One who appeals a court decision to higher authority
entrepreneur
-One who organizes resources productively and bears the risk of the venture
assignee
-One who receives a transfer of contract rights from a party to the contract, assignmentSyn: allocation
assignor
-One who sells contract rights to a third person
branch and bound
-Operations research models for determining optimal solutions based on the enumeration of subsets of possible solutions, which implicitly enumerate all possible solutions
equal runout quantities
-Order quantities for items in a group that result in a supply that covers an equal time for all items - Syn: equal runout method - See: fairshare quantity logic
cross functional organization
-Organization in which groups of directors, executives, and managers with a diversity of skills and backgrounds work on problems outside the bounds of theirfunctional responsibilities - See: integrated enterprise
informal culture
-Organizational characteristics and relationships that are not part of the formal structure but that influence how the organization accomplishes its goals
intermodal marketing companies (imcs)
-Organizations that are the intermediary for shippers and intermodal rail carriers
lead logistics providers (llps)
-Organizations that oversee the thirdparty logistics operations of their clients
integrated logistics service providers
-Organizations that provide one or many logistics services to a customer for a fee
consolidation
-Packages and lots that move from suppliers to a carrierterminal and are sorted and then combined with similar shipments from another supplier's container load or truckload for travel to a final destination - See: milk run
business continuity management system (bcms)
-Part of the overall management system that establishes, implements, operates, monitors, reviews, maintains, and improves an organization's capability of delivering products or services at acceptable predefined levels following a disruptive incident - It is based upon identifying potential threats to an organization and the impact to business operations from those threats - The system provides a framework for building organizational resilience with the capability of an effective response that safeguards the interests of its key stakeholders, reputation, brand, and valuecreating activities
bulk issue
-Parts issued from stores to workinprocess inventory, but not based on ajob order - They are issued in quantities estimated to cover requirements of individual work centers and production lines - The issue may be used to cover a period of time or to fill a fixedsize container
cash in advance payment
-Payment by the importer to the exporter before the exporter ships the goods, providing the maximum protection to the exporter and no protection to the importer
layout
-Physical arrangement of resources or centers of economic activity (machines, groups of people, workstations, storage areas, aisles, etc -) within a facility - Layout types include product (linear or line), functional (job shop or process), cellular, and fixed position
co location
-Placing project team members in physical proximity to facilitate communication and working relationships
exempt positions
-Positions that do not require the payment of overtime because they meet the tests of executive, supervisory, or administrative activity, as defined under the Fair Labor Standards Act
declining practice
-Practices used for long periods of time that have become obsolete or even harmful to business and supply chain performance
environmental scanning
-Process used to expose an organization's potential strengths, weaknesses, opportunities, and threats - Many experts emphasize opportunities and threats because the tool is primarily external
critical processes
-Processes that have large potential for loss either money, property, or human life
deterioration
-Product spoilage, damage to the package, or other damage to the product - This is one of the considerations in inventory carrying cost
imports
-Products bought in one country and produced in another
design for remanufacture
-Products developed in a mannerthat allows components to be used in other products - This process is associated with green manufacturing
floor ready merchandise
-Products shipped by a supplier having all needed tags, prices, security devices, and so on already in place
distressed goods
-Products that are damaged or close to their expiration date and cannot be sold at full price
facilitating products
-Products that support the operations of a firm but are not sold externally, such as furniture and computers
innovative products
-Products that tend to have a high profit margin, be unique, have less competition, and have dynamic demand
engineer to order (eto)
-Products whose customer specifications require unique engineering design, significant customization, or new purchased materials - Each customer order results in a unique set of part numbers, bills of material, and routings - Syn: designtoorder, en routeA term describing goods in transit
fixed property
-Property attached to, and not easily removed from, the location
time buffer
-Protection against uncertainty that takes the form of time
knowledge management tool
-Provides an assortment of information quickly to stakeholders for faster and better decisions
is073
-Providesthe definitions of generic terms related to risk management - It aims to encourage a mutual and consistent understanding of, and a coherent approach to, the description of activities relating to the management of risk, and the use of uniform risk management terminology in processes and frameworks dealing with the management of risk
cross training
-Providing training or experience in several different areas (e -g -, training an employee on several machines) - Crosstraining provides backup workers in case the primary operator is unavailable - CRPAbbreviation for capacity requirements planning - CRTAbbreviation for current reality tree
import broker or sales agent
-Purchasing agent who charges a fee for transactions but does not take the title to the goods
direct materials purchasing
-Purchasing from suppliersonacontractualbasisforafixedperiodoftime or amount of product - For job shops, the purchasing contract can be for only one job - For repetitive manufacturing, the materials are usually purchased on contracts that last for a model run or at least ayear
quality of design
-Quality that is measured by the degree of customer satisfaction with a products features
hopper cars
-Rail cars that permit bulk commodities to be loaded at the top and removed from the bottom of the car - Some hoppercars have permanent tops that provide protection from bad weather
agency tariff
-Rates for a variety of carriers published in a single document
common material
-Readily available items used in industry that require no special handling, common parts billSyn: common parts bill of material
bracketed recall
-Recall from customers of suspect lot numbers plus a specified number of lots produced before and after the suspect ones
demand forecast updating
-Recomputing a forecast after deleting the oldest data and adding data generated since the last forecast revision
eoq = 1
-Reducing setup time and inventory to the pointwhere it is economically sound to produce in batches with a size of one - Often EOQ = 1 is an ideal to strive for, like zero defects
clicks and mortar
-Refers to a brick and mortar company that also has succeeded in making online sales - Ant: bricks and mortar
e business
-Refers to conducting business processes on an electronic network, typically the internet
group replacement
-Replacing an entire set of components, whether failed or not, all at one time (e -g -, replacing all the light bulbs in a ceiling fixture)
efficient consumer response (ecr)
-Replenishment through a distribution network based on pointofsale information
percentage load report
-Report used to visually show the percentage of workload against capacity
delay reporting
-Reporting against the operation status of a manufacturing order on an exception basis when delays are anticipated
contract reporting
-Reporting of and the accumulation of finished production against commitments to a customer
in process waiver requests
-Requests for waivers on normal production procedures because of deviations in materials, equipment, or quality metrics, where normal product specifications are maintained
automatic rescheduling
-Rescheduling done by the computer to automatically change due dates on scheduled receipts when it detects that due dates and need dates are out of phase - Ant: manual rescheduling
interrogate
-Retrieve information from computer files by use of predefined inquiries or unstructured queries handled by a highlevel retrieval language
arbitrage
-Risk free buying of an asset in one market and simultaneous selling of an identical asset at a profit in another market
dodge
-RomigtablesInformation about the correct sample size and maximum defective quantity in a sample to satisfy lot acceptance a quality control measurement
fixed asset turnover
-Sales divided by net fixed assets - Fixed assets reflect asset acquisition price less depreciation
contract labor
-Selfemployed individuals or firms contracted by an organization to perform specific services on an intermittent or shortterm basis
dumping
-Selling goods below costs in selected markets
customer chain operations reference (ccor)
-Serves as the starting point for process modeling efforts by providing BPM modelers a core set of high level common business processes forthe customer chain and a common language for the exchange of process knowledge and linking sales, operations, and customer support business processes
clerical/administration
-Several related activities necessary for the organization's operation, generally including but not limited to the following: updating records and files based on receipts, shipments, and adjustments maintaining labor and equipment records and performing locating, order consolidation, correspondence preparation, and similar activities
agglomeration
-Sharing a common location with a variety of other companies
direct truck shipment
-Shipment made without any additional stops, such as for loading or changing trucks
data cleansing
-Sifting through a database to find and fix mistakes such as misspelling, missing information, and false data
direct offset
-Similar to bartering, trading goods or services for related goods or services or agreeing on coproduction
fixed position manufacturing
-Similarto project manufacturing, this type of manufacturing is mostly used for large, complex projects where the product remains in one location for its full assembly period or may move from location to location after considerable work and time are spent on it - Examples of fixedposition manufacturing include shipbuilding or aircraft assembly, forwhich the costs of frequent movement of the product are very high
decisions under certainty
-Simple decisions that assume complete information and no uncertainty connected with the analysis of decisions
design for service
-Simplification of parts and processes to improve the aftersale service of a product - Syn: design for maintainability
design for manufacturability
-Simplification of parts, products, and processes to improve quality and reduce manufacturing costs
contribution relativities
-Situations in which an investment by one stakeholder may benefit others in the supply chain
configurator
-Software system that creates, uses, and maintains product models that allow complete definition of all possible product options and variations with a minimum of data entries
helper application
-Software that assists the browser when audio, video, or large images are requested
browser
-Software used on the web to retrieve and display documents on screen, connect to other sites using hypertext links, display images, and play audio files
contract line items number (clin)
-Specific items that are priced separately on a contract
islandsof automation
-Standalone pockets of automation (e -g -, robots, CAD/CAM systems, numerical control machines) that are not connected to a cohesive system
american standard code for information interchange (ascii)
-Standard sevenbit character code used by computer manufacturers to represent 128 characters for information interchange among data processing systems, communications systems, and other information system equipment - An eighth bit is added as a parity bit to check a string of ASCII characters for correct transmission
international standards
-Standards established by international standardssetting organizations to promote interoperability among operating environments
bayesian analysis
-Statistical analysis where uncertainty is incorporated, using all available information to choose among a number of alternative decisions
inactive inventory
-Stock designated as in excess of consumption within a defined period stocks of items that have not been used for a defined period
cycle reduction stock
-Stock held to reduce delivery time
channel partners
-Suppliers, manufacturers, distributors, and retailers that form a supply chain to make and distribute a set of products
consumables
-Supplies or materials (such as paint, cleaning materials, orfuel) that are consumed or exhausted in the production or sale of a good or service - Syn: consumable tooling, supplies expendables, consumable tooling, suppliesSyn: consumables
global supply chains
-Supply chains that include international partners or markets
content management applications
-Supports the evolutionary life cycle of digitalbased information and makes information dynamically updatable online includes the ability to publish content to a repository and support access to digitalbased content, contestable marketA market having low entry costs
composite manufacturing lead time
-Syn: cumulative manufacturing lead time
earnings before interest and taxes (ebit)
-Syn: net operating income
eoq tables
-Tables listing several ranges of monthly usages in dollars and the appropriate order size in dollars or monthly usage for each usage range
distribution of forecast errors
-Tabulation of the forecast errors according to the frequency of occurrence of each errorvalue - The errors in forecasting are, in many cases, normally distributed even when the observed data does not come from a normal distribution
focused low cost strategy
-Targeting a market with a lowcost product line in order to lower the cost of sales and increase gross margin
focus strategy
-Targeting a narrow market with specialized goods or services
inventory tax
-Tax based on the value of inventory on hand at a particular time
advanced planning and scheduling (aps)
-Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate, and longterm time periods - APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others - These techniques simultaneously consider a range of constraints and business rules to provide realtime planning and scheduling, decision support, availabletopromise, and capabletopromise capabilities - APS often generates and evaluates multiple scenarios - Management then selects one scenario to use as the official plan - The five main components of APS systems are (1) demand planning, (2) production planning, (3) production scheduling, (4) distribution planning, and (5) transportation planning
automatic identification and data capture (aidc)
-Technologies that collectType equation here, data about objects and then sends the data to a computer without human intervention - Examples include radio frequency wireless devices and terminals, bar code scanners, and smart cards
carnet
-Temporary admission granted to goods that are passing through a country ratherthan being imported into it - The goods can cross several boundaries dutyfree and taxfree without customs inspection - Disposable and consumable items are excluded - Syn: ATA carnet
forecast bias
-Tendency of a forecast to systematically miss the actual demand (consistently either high or low), forecast consumptionSyn: consuming the forecast
kaizen
-The Japanese term for improvement refers to continuing improvement involving everyone managers and workers - In manufacturing, kaizen relates to finding and eliminating waste in machinery, labor, or production methods - See: continuous process improvement
harmonized tariff schedule (hts)
-The US International Trade Commission's mechanism by which international tariffs are standardized - Importers and exporters use this schedule to determine the amount of tariff to pay and must classify all goods moved across international borders using the harmonized system of the country of import
federal trade commission (ftc)
-The United States governmental agency charged with protecting businesses and consumers from unfair business practices - It also regulates advertising and promotion at the national level
full pegging
-The ability of a system to automatically trace requirements for a given component all the way up to its ultimate end item, customer, or contract number - Syn: contract pegging
fault tolerance
-The ability of a system to avoid or minimize the disruptive effects of defects by using some form of redundancy or extra design margins
flexibility responsiveness
-The ability of the firm and its management to change rapidly in response to changes taking place in the marketplace
connectivity
-The ability to communicate effectively with supply chain partners to facilitate interorganization synchronization
capacity simulation
-The ability to do roughcut capacity planning using a simulated master production schedule or material plan rather than live data, capacity smoothingSyn: load leveling
agility
-The ability to quickly plan, source, make, and deliver to adapt and respond to changes in the competitive environment - It is a SCOR performance attribute that includes product or service flexibility (speedy introduction of new products and services), mix flexibility (ability to quickly change products or services offered), volume flexibility (ability to service large order quantities), and delivery flexibility (ability to quickly change delivery dates to meet new requirements)
agile supply chain
-The ability to respond quickly to unpredictable changes in customer needs by reconfiguring operations - Syn: agile manufacturing
closed period
-The accounting time period for which the adjusting and closing entries have been posted - Ant: open period
cost reduction
-The act of lowering the cost of goods or services by securing a lower price, reducing labor costs, and so forth - In cost reduction, the item usually is not changed, but the circumstances around which the item is secured are changedas opposed to value analysis, in which the item itself is actually changed to produce a lower cost
inventory planning
-The activities and techniques of determining the desired levels of items, whether raw materials, work in process, or finished products (including order quantities and safety stock levels) - Syn: material planning
debt to equity ratio
-The amount of bonds and preferred stocks relative to the owners' equity position - A measurement of the use of borrowed funds to leverage owners' equity
free slack
-The amount of time by which the completion of an activity in a project network can increase without delaying the start of the next activity, freight billA freight carrier's invoice for a shipment
demand lead time
-The amount of time potential customers are willing to wait for the delivery of a good or a service - Syn: customertolerance time
cost allocation
-The assignmentof costs that cannot be directly related to production activities via more measurable means (e -g -, assigning corporate expenses to different products via direct labor costs or hours)
critical characteristics
-The attributes of a product that must function properly to avoid the failure of the product - Syn: functional requirements
jurisdiction
-The authority of a governmental agency to undertake its activities
blanket release
-The authorization to ship and/or produce against a blanket agreement or contract
component availability
-The availability of component inventory for the manufacture of a specific parent order orgroup of orders or schedules, component leadtime offsetSyn: leadtime offset, composite lead timeSyn: cumulative lead time
idle capacity
-The available capacity that exists on nonconstraint resources beyond the capacity required to support the constraint - Idle capacity has two components: protective capacity and excess capacity
expected life
-The average length of time a product remains in service or in a serviceable condition
average payment period
-The average time between receipt of materials and payment for those materials
expected value
-The average value that would be observed in taking an action an infinite number of times - The expected value of an action is calculated by multiplying the outcome of the action by the probability of achieving the outcome
confidence limit
-The bounds of an interval - A probability can be given for the likelihood that the true value will lie between the confidence limits
inventory accounting
-The branch of accounting dealing with valuing inventory - Inventory may be recorded or valued using either a perpetual or a periodic system - A perpetual inventory record is updated frequently or in real time, while a periodic inventory record is counted or measured at fixed time intervals (e -g -, every two weeks or monthly) - Both recording systems use the LIFO, FIFO, or average costs inventory valuation method
costaccounting
-The branch of accounting that is concerned with recording and reporting business operating costs - It includes the reporting of costs by departments, activities, and products
inventory management
-The branch of business management concerned with planning and controlling inventories
five ms
-The branches of a causeandeffect (fishbone) diagram: manpower, methods, materials, machines, and measurements
attrition factor
-The budget fraction apportioned for replacement personnel training because of projected personnel losses (retirements, promotions, and terminations)
forecasting
-The business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance
change management
-The business process that coordinates and monitors all changes to the business processes and applications operated by the business, as well as to its internal equipment, resources, operating systems, and procedures - The change management discipline is carried out in away that minimizes the risk of problems that will affect the operating environment and service delivery to the users
fob origination
-The buyer takes possession of the goods at the supplier's location, and the buyer must provide transportation
capacity available
-The capability of a system or resource to produce a quantity of output in a particular time period - Sy n: available capacity - See: capacity, available time
design changeover flexibility
-The capability of the existing production system to accommodate and introduce a large variety of major design changes quickly
capacity required
-The capacity of a system or resource needed to produce a desired output in a particular time period - Syn: required capacity - See: capacity
container design
-The characteristics of the product that make it transportable with ease of handling and stowability - Container concepts include packaging, monetary density, and physical density
internal environment
-The chosen domain or scope of activities within which an organization operates for example, the tasks associated with goods or services to be delivered by the organization - See: external environment, organizational environment
abc classification
-The classification of a group of items in decreasing order of annual dollar volume (price multiplied by projected volume) or other criteria - This array is then split into three classes, called A, B, and C - The A group usually represents 10 percent to 20 percent by number of items and 50 percent to 70 percent by projected dollar volume - The next grouping, B, usually represents about 20 percent of the items and about 20 percent of the dollar volume - The C class contains 60 percent to 70 percent of the items and represents about 10 percent to 30 percent of the dollar volume - The ABC principle states that effort and money can be saved through applying looser controls to the lowdollarvolume class items than to the highdollarvolume class items - The ABC principle is applicable to inventories, purchasing, and sales - Syn: ABC analysis, distribution by value - See: 8020, Pareto analysis, Pareto's law
delivery policy
-The company's goal for the time required to ship the product after the receipt of a customer's order - The policy is sometimes stated as our quoted delivery time -
aggregation
-The concept that pooling random variables reduces the relative variance of the resulting aggregated variable - For example, the relative variance in sales of all models of automobiles sold by a firm is less than that for a single model
blocking
-The condition requiring a work center that has parts to process to remain idle as long as the queue to which the parts would be sent is full, or kanbans authorizing production are not present
cascading yield loss
-The condition where yield loss happens in multiple operations or tasks, resulting in a compounded yield loss - Syn: cumulativeyield - See: composite yield
gateway
-The connection that allows data and other information to flow between two networks, gateway operationSyn: gateway work center
direct delivery
-The consignment of goods directly from the supplier to the buyer, frequently used where a third party acts as intermediary between supplier and buyer
design
-The conversion of a need or innovation into a product, process, or service that meets both enterprise and customer expectations - The design process consists of translating a set of functional requirements into an operational product, process, or service
cost of poor quality
-The cost associated with providing poorquality products or services - There are four categories of costs: (1) internal failure costs (costs associated with defects found before the customer receives the product or service) (2) external failure costs (costs associated with defects found after the customer receives the product or service) 3 appraisal costs (costs incurred to determine the degree of conformance to quality requirements) and 4 prevention costs (costs incurred to keep failure and appraisal costs to a minimum) - Syn: cost of quality, cost of qualitySy n: cost of poor quality
handling cost
-The cost involved in the movement of material - In some cases, the handling cost depends on the size of the inventory
carryingcost
-The cost of holding inventory, usually defined as a percentage of the dollar value of inventory per unit of time (generally one year) - Carrying cost depends mainly on the cost of capital invested as well as costs of maintaining the inventory such as taxes and insurance, obsolescence, spoilage, and space occupied - Such costs vary from 10 percent to 35 percent annually, depending on type of industry - Carrying cost is ultimately a policy variable reflectingthe opportunity cost of alternative uses forfunds invested in inventory - Syn: holding costs
cost of capital
-The cost of maintaining a dollar of capital invested for a certain period, usually oneyear - This cost is normally expressed as a percentage and may be based on factors such as the average expected return on alternative investments and current bank interest rate for borrowing
internal failure costs
-The cost of things that go wrong before the product reaches the customer - Internal failure costs usually include rework, scrap, downgrades, reinspection, retesting, and process losses
compound yield
-The cumulative effect of yield loss at multiple operations within the manufacturing cycle, comptrollerSyn: controller
effective date
-The date on which a component or an operation is to be added or removed from a bill of material or an assembly process - The effective dates are used in the explosion process to create demands forthe correct items - Normally, bills of material and routing systems provide for an effectivity start date and stop date, signifying the start or stop of a particular relationship - Eff ectivity control also may be by serial number rather than date
arrival date
-The date purchased material is due to arrive at the receiving site - The arrival date can be input, it can be equal to the current due date, or it can be calculated from the ship date plus transit time
contract date
-The date when a contract is accepted by all parties
due date
-The date when purchased material or production material is due to be available for use - Syn: expected receipt date - See: arrival date
current liabilities
-The debts owed by a company and expected to be paid within 12 months - See: liabilities, balance sheet
accuracy
-The degree of freedom from error or the degree of conformity to a standard - Accuracy is different from precision - For example, foursignificantdigit numbers are less precise than sixsignificantdigit numbers however, a properly computed foursignificantdigit number might be more accurate than an improperly computed sixsignificantdigit number, acid testSyn: quick asset ratio
goodness of fit
-The degree to which a model complieswith observed data
functionality
-The degree to which a product achieves its designed purpose
deliver
-The deliver process describes the activities associated with the creation, maintenance, and fulfillment of customer orders - Detail activities encompass the receipt, validation, and creation of customer orders as well as scheduling order delivery, pick, pack, shipment, and invoicing - See: order shipment
independent demand
-The demand for an item that is unrelated to the demand for other items - Demand for finished goods, parts required for destructive testing, and service parts requirements are examples of independent demand - See: dependent demand
acceptable outgoing quality level (aoql)
-The demarcation between the level of defects in a lot at which the lot will be accepted or rejected
drum schedule
-The detailed production schedule for a resource that sets the pace for the entire system - The drum schedule must reconcile the customer requirements with the system's constraint(s) - DSDAbbreviation for direct store delivery - DSSAbbreviation for decision support system - DTFAbbreviation for demand time fence
isolation
-The determination of the location of a failure through the use of accessory support and diagnostic equipment
contribution
-The difference between sales price and variable costs - Contribution is used to cover fixed costs and profits
actual duration
-The difference between the actual start date of a project activity and the current date (if the activity is still in progress) or the difference between the actual start date of a project activity and the actual completion date (if the activity is completed)
consumer surplus
-The difference between the highest price a consumer is willing to pay for a good or service and the price actually paid
gross margin
-The difference between total revenue and the cost of goods sold - Syn: gross profit margin
actual cost of work performed
-The direct costs actually incurred in, and the indirect costs applied to, accomplishing work performed within a given time period - These costs should reconcile with the contractor's incurredcost ledgers, which are regularly audited by the client
design engineering
-The discipline consisting of process engineering and product engineering, design for maintainabilitySyn: design for service
distribution channel
-The distribution route, from raw materials through consumption, along which products travel - See: channels of distribution, marketing channel
labor cost
-The dollar amount of labor performed during manufacturing - This amount is added to direct material cost and overhead cost to obtain total manufacturing cost
dwell
-The duration of time between when cargo arrives in a terminal's intransit storage area and when it is shipped out by clearance transportation
gantt chart
-The earliest and bestknown type of planning and control chart, especially designed to show graphically the relationship between planned performance and actual performance overtime - Named after its originator, Henry L - Gantt, the chart is used for (1) machine loading, in which one horizontal line is used to represent capacity and another to represent load against that capacity or (2)monitoring job progress, in which one horizontal line represents the production schedule and another parallel line represents the actual progress of the job against the schedule in time - Syn: job progress chart, milestone chart
importer of record (lor)
-The entity responsible for ensuringthe imported/exported goods comply with local laws and regulations, for filing the documentation for duty entry, and for paying any associated import duties or taxes
average cost per unit
-The estimated total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced
co destiny
-The evolution of a supply chain from intraorganizational management to interorganizational management
average outgoing quality (aoq)
-The expected average quality level of outgoing product for a given value of incoming product quality
inventory visibility
-The extent to which inventory information is shared within a firm and with supply chain partners
feedback
-The flow of information back into the control system so that actual performance can be compared with planned performance
indented tracking
-The following of all lot numbers of intermediates and ingredients consumed in the manufacture of a given batch of product down through all levels of the formula
gate review
-The formal review process occurring between the major phases of a new product introduction effort - The determination to continue or to stop the project is formally made at each review point or gate
manufacturing environment
-The framework in which manufacturing strategy is developed and implemented - Elements of the manufacturing environment include external environmental forces corporate strategy business unit strategy other functional strategies (marketing, engineering, finance, etc -) product selection product/process design product/process technology and management competencies - The type of manufacturing enviroment will affect: inventory levels, supply lead time, method of operations (process/layout) - Often refers to whether a company, plant, product, or service is MTS, MTO, ETO, ATO - Syn: production environment
global reporting initiative (gri) reporting framework
-The framework that sets out the principles and performance indicators organizations can use to measure and report their human rights, labor, environment, and anticorruption practices and outcomes
embezzlement
-The fraudulent taking of another's property while acting in a fiduciary capacity
freight collect
-The freight and charges to be paid by the consignee
capacity requirements planning (crp)
-The function of establishing, measuring, and adjusting limits or levels of capacity - The term refers to the process of determining in detail the amount of labor and machine resources required to accomplish the tasks of production - Open shop orders and planned orders in the MRP system are input to CRP, which through the use of parts routings and time standards translates these orders into hours of work by work center by time period - Even though RCCP may indicate that sufficient capacity exists to execute the MPS, CRP may show that capacity is insufficient during specific time periods - See: capacity planning
capacity management
-The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules (i -e -, the production plan, master production schedule, material requirements plan, and dispatch list) - Capacity management is executed at four levels: resource requirements planning, roughcut capacity planning, capacity requirements planning, and input/ output control
field service
-The functions of installing and maintaining a product for a customer after the sale or during the lease - Field service may also include training and implementation assistance - Syn: aftersale service
corrective action
-The implementation of solutions resulting in the reduction or elimination of an identified problem
critical to quality characteristics (ctqs)
-The important and measurable traits of a product or process whose performance targets must be met to satisfy the customer - They adjust improvement efforts to meet consumer requirements - CTQs represent customer expectations for a product
iso certification/registration
-The independent audit of an organization against a recognized management system standard such as ISO 9001 (Quality) or ISO 14001 (Environmental) by a third party - Thirdparty audits are known as certification or registration audits - Once compliance to the relevant standard and certification is achieved by the organization, the third party (referred to as the certification body or registrar) issues a certificate valid for three years and visits annually to ensure maintenance of the management system - Such visits are known as surveillance audits
cybernetic system
-The information flow or information system (electronic, mechanical, logical) that controls an industrial process
competitive intelligence
-The information required to conduct a competitive analysis about external events and trends that can affect a company's plans
charge
-The initial loading of ingredients or raw materials into a processor, such as a reactor, to begin the manufacturing process
cargo container capacity
-The inside usable cubic volume of a container
certified fixtures
-The inspection models that conform to known specifications
industrial facilities management
-The installation and maintenance of the physical plant, its surroundings, and the physical assets of an organization
computer integrated mftg
-The integration of the total manufacturing organization through the use of computer systems and managerial philosophies that improve the organization's effectiveness the application of a computer to bridge various computerized systems and connect them into a coherent, integrated whole - For example, budgets, CAD/CAM, process controls, group technology systems, MRP II, and financial reporting systems are linked and interfaced
globalization
-The interdependence of economies globally that results from the growing volume and variety of international transactions in goods, services, and capital, and also from the spread of new technology
calibration frequency
-The interval in days between tooling calibrations
design cycle
-The interval of time between the start of the design process of one model and the completion of the design process forthe model
base inventory level
-The inventory level made up of aggregate lotsize inventory plus aggregate safety stock inventory - It does not take into account the anticipation inventory that will result from the production plan - The base inventory level should be known before the production plan is made - Syn: basic stock - See: aggregate inventory
continuous review system
-The inventory level on hand and on order for a continuous review system is checked whenever a change in inventory level occurs - When the reorder point is reached, a restocking order is released - See: fixed reorder cycle inventory model
body of knowledge
-The knowledge in a given area that a person is expected to understand to be certified as a practitioner
actual costs
-The labor, material, and associated overhead costs that are charged against a job as it moves through the production process
drop dead date
-The last possible date to apply influence to a future activity
inventory cycle
-The length of time between two consecutive replenishment shipments
human machine interface
-The location where data is transferred from aworkerto a computer or viceversa
decoupling points
-The locations in the product structure or distribution network where inventory is placed to create independence between processes or entities - Selection of decoupling points is a strategic decision that determines customer lead times and inventory investment - See: control points
dispatching rule
-The logic used to assign priorities to jobs at a work center
critical failure
-The malfunction of those parts that are essential for continual operation or the safety of the user
global trade management
-The management and optimization of shipments across international borders to improve operating efficiencies and cash flows includes ensuring compliance with all international regulations and documentation and streamlining and acceleratingthe movement of goods
housekeeping
-The manufacturing activity of identifying and maintaining an orderly environment for preventing errors and contamination in the manufacturing process
gross national product (gnp)
-The market value of all goods and services produced in a nation in a given year, gross profitSales minus cost of goods sold, gross profit marginSyn: gross margin
item record
-The master record for an item - Typically, it contains identifying and descriptive data and control values (lead times, lot sizes, etc -) and may contain data on inventory status, requirements, planned orders, and costs - Item records are linked by billofmaterial records (or product structure records), thus defining the bill of material - Syn: item master record, part master record, part record
enforced problem solving
-The methodology of intentionally restricting a resource (e -g -, inventory - storage space, number of workers) to expose a problem that must then be resolved
datatransfer
-The movement by electronic means of data from one location to another - The data can take the form of voice, text, image, or other formats - The movement is accomplished by communication links between computers and a variety of input/output devices
final assembly department
-The name of the manufacturing department where the product is assembled - See: blending department, packout department
cash flow
-The net flow of dollars into or out of the proposed project - The algebraic sum, in any time period, of all cash receipts, expenses, and investments - Also called cash proceeds or cash generated, cash flow managementSyn: funds flow management, cash flow statementSy n: funds flow statement
extended enterprise
-The notion that supply chain partners form a larger entity - See: supply chain community
baud
-The number of bits transmitted per second
crew size
-The number of people required to perform an operation - The associated standard time should represent the total time for all crew members to perform the operation, not the net start to finish time for the crew
available inventory
-The onhand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems - Often called beginning available balance - Syn: beginning available balance, net inventory
centralized dispatching
-The organization of the dispatching function into one central location - This structure often involves the use of data collection devices for communication between the centralized dispatching function (which usually reports to the production control department) and the shop manufacturing departments
flowchart
-The output of a flowcharting process a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process - Flowcharts are drawn to better understand processes - The flowchart is one of the seven tools of quality - Syn: flow diagram - See: block diagram, flow process chart
dunnage
-The packing material used to protect a product from damage during transport - Some industries use the term to refer specifically to returnable packaging only
electronic data interchange (edi)
-The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices, and invoices, using standardized document formats
american national standards institute (ansi)
-The parent organization of the interindustry electronic interchange of the business transaction standard - This group is the clearinghouse on US electronic data interchange standards
feedback loop
-The part of a closedloop system that allows the comparison of response with command
equity
-The part of a company's total assets not provided by creditors ownerinvested funds
calendar time
-The passage of days or weeks as in the definition of lead time or scheduling rules, in contrast to running time
compensation
-The pay and benefits awarded for services rendered to an organization
labor
-The people who produce value in a product stream
base demand
-The percentage of a company's demand derived from continuing contracts and/ or existing customers - Because this demand is well known and recurring, it becomes the basis of management's plans - Syn: baseload demand, base indexSyn: base series
concentration
-The percentage of an active ingredientwithin the whole - For example, a 40 percent solution of hydrochloric acid
availability
-The percentage of time that a worker or machine is capable of working
forecast horizon
-The period of time into the future forwhich a forecast is prepared
brand manager
-The person in charge of the marketing program for a given brand - Syn: product manager
first mover advantage
-The phenomenon of market leadership being gained through market innovation
facilities
-The physical plant, distribution centers, service centers, offices, laboratories, and related equipment
distribution networkstructure
-The planned channels of inventory disbursement from one or more sources to field warehouses and ultimately to the customer - There may be one or more levels in the disbursement system - Syn: bill of distribution
activity duration
-The planned difference between the start and finish dates of a project activity
expected completion quantity
-The planned quantity of a manufacturing order after expected scrap
distribution planning
-The planning activities associated with transportation, warehousing, inventory levels, materials handling, order administration, site and location planning, industrial packaging, data processing, and communications networks to support distribution
detailed planning and control
-The planning of a project in the short term, covering the present time and extending until a few weeks out
equilibrium point
-The point in a market where the demand for a product and the supply of that product are exactly equal - If supply were greater, the price would fall - If demand were greater, the price would rise - Free markets tend to move toward their equilibrium point
internal controls
-The policies and procedures, documentation, and plan for an organization that authorize transactions, safeguard assets, and maintain the accuracy of financial records
executive sales and operations planning
-The portion of sales and operations planning that defines executive decisionmaking processes to balance supply and demand at the volume level in families, fully integrates financial planning and operational planning, and provides a forum for establishing and linking highlevel strategic plans with daytoday operations - See: sales and operations planning
committed capability
-The portion of the production capability that is currently in use or is scheduled for use
human resources
-The portion or department of a company that sets personnel policies and practices
freight equalization
-The practice by more distant suppliers of absorbing the additional freight charges to match the freight charges of a supplier geographically closer to the customer - This helps eliminate the competitive advantage of lower freight charges that the nearest supplier has
customer segmentation
-The practice of dividing a customer base into groups of individuals who are similar in specific ways relevant to marketing - Traditional segmentation focuses on identifying customer groups based on demographics and attributes such as attitude and psychological profiles
hedging
-The practice of entering into contracts on a commodity exchange to protect against future fluctuations in the commodity - This practice allows a company to isolate profits to the valueadded process rather than to uncontrolled pricing factors - See: speculative buying
employee empowerment
-The practice of giving nonmanagerial employees the responsibility and the power to make decisions regarding their jobs ortasks - It is associated with the practice of transfer of managerial responsibility to the employee - Empowerment allows the employee to take on responsibility fortasks normally associated with staff specialists - Examples include allowingthe employee to make scheduling, quality, process design, or purchasing decisions
constraints management
-The practice of managing resources and organizations in accordance with the theory of constraints (TOC) principles - See: theory of constraints
exception management
-The practice of responding only to issues or events that fall outside a predetermined threshold - Managers are prompted to respond to these critical matters first - This practice is often applied to management of budgets, projects and risks - Sometimes referred to as management by exception
current price
-The price currently being paid, as opposed to standard cost
feedstock
-The primary raw material in a chemical or refining process normally received by pipeline or largescale bulk shipments - Feedstock availability is frequently the controllingfactorin setting the production schedule and rate for a process - FEFOAbbreviation for first expiry first out
cycle service level
-The probability of not having a stockout in any one ordering cycle, which begins at the time an order is placed and ends when the goods are placed in stock - Syn: measure of service, service level
confidence level
-The probability that a particular value lies between an upper and a lower bound, which are its confidence limits
backward integration
-The process of buying or owning elements of the production cycle and channel of distribution back toward raw material suppliers - See: vertical integration
requirements explosion
-The process of calculating the demand for the components of a parent item by multiplying the parent item requirements by the component usage quantity specified in the bill of material - Syn: explosion
capable to promise (ctp)
-The process of committing orders against available capacity as well as inventory - This process may involve multiple manufacturing or distribution sites - Used to determine when a new or unscheduled customer order can be delivered - Employs a finitescheduling model of the manufacturing system to determine when an item can be delivered - Includes any constraints that might restrict the production, such as availability of resources, lead times for raw materials or purchased parts, and requirements for lowerlevel components or subassemblies - The resulting delivery date takes into consideration production capacity, the current manufacturing environment, and future order commitments - The objective is to reduce the time spent by production planners in expediting orders and adjusting plans because of inaccurate deliverydate promises
rough cut capacity planning (rccp)
-The process of converting the master production schedule into requirements for key resources often including labor, machinery, warehouse space, suppliers' capabilities, and, in some cases, money - Comparison to available or demonstrated capacity is usually done for each key resource - This comparison assists the master scheduler in establishing a feasible master production schedule - Three approaches to performing RCCP are the bill of labor (resources, capacity) approach, the capacity planning using overall factors approach, and the resource profile approach - See: bill of resources, capacity planning, capacity planning using overall factors, product load profile, resource profile, route sheetSyn: routing
change control
-The process of determining, approving, or rejecting changes to a plan baseline
econometric modeling
-The process of developing econometric models - See: econometric model
mixed model scheduling
-The process of developing one or more schedules to enable mixed model production - The schedule dictates production and replenishment mix according to the daily production goals - The goal is to achieve a day's production each day - See: mixedmodel production
decentralized authority
-The process of dispersing decisionmaking governance to staff people below the executive level of an organization
disintermediation
-The process of eliminating an intermediate stage or echelon in a supply chain - Total supply chain operating expense is reduced, total supply chain inventory is reduced, total cycle time is reduced, and profits increase amongthe remaining echelons - See: echelon
fair share quantity logic
-The process of equitably allocating available stock amongfield distribution centers - Fairshare quantity logic is normally used when stock available from a central inventory location is less than the cumulative requirements of the field stocking locations - The use of fairshare quantity logic involves procedures that push stock out to the field, instead of allowing the field to pull in what is needed - The objective is to maximize customer service from the limited available inventory - See: equal runout quantities
early manufacturing involvement
-The process of involving manufacturing personnel early in the product design activity and drawing on their expertise, insights, and knowledge to generate better designs in less time and to generate designs that are easier to manufacture - Early involvement of manufacturing, field service, suppliers, customers, and so on means drawing on their expertise, knowledge, and insight to improve the design - Benefits include increased functionality, increased quality, ease of manufacture and assembly, ease of testing, better testing procedures, ease of service, decreased cost, and improved aesthetics - See: design for manufacture and assembly, participative design/engineering
early supplier involvement (esi)
-The process of involving suppliers early in the product design activity and drawing on their expertise, insights, and knowledge to generate better designs in less time and designs that are easier to manufacturewith high quality - See: participative design/engineering
3d printing
-The process of layering materials to make products and components using computer data - Syn: additive manufacturing - See: rapid prototyping - 3PLAbbreviation for thirdparty logistics
forecast management
-The process of making, checking, correcting, and usingforecasts - It also includes determination of the forecast horizon
capacity control
-The process of measuring production output and comparing it with the capacity plan, determining if the variance exceeds preestablished limits, and taking corrective action to get back on plan if the limits are exceeded - See: input/output control
enterprise performance management (epm)
-The process of monitoring performance across the enterprise with the goal of improving business performance - An EPM system integrates and analyzes data from many sources, including ecommerce systems, front and backoffice applications, data warehouses, and external data sources - Advanced EPM systems can support many performance methodologies, such as the balanced scorecard
blending
-The process of physically mixing two or more lots or types of material to produce a homogeneous lot - Blends normally receive new identification and require testing
amortization
-The process of recovering (via expensing) a capital investment over a period of time - See: capital recovery
consuming the forecast
-The process of reducing the forecast by customer orders or other types of actual demands as they are received - The adjustmentsyield the value of the remainingforecast for each period - Syn: forecast consumption
discrete manufacturing
-The production of distinct items such as automobiles, appliances, or computers
job shop scheduling
-The production planning and control techniques used to sequence and prioritize production quantities across operations in a job shop
demand during lead time
-The quantity of a product expected to be withdrawn from stock or to be consumed during its replenishment lead time when usage is at the forecasted rate - See: expected demand
defects per million opportunities
-The quantity of defects per one million defect opportunitiesa potential problem that is important to the customer
confidence interval
-The range on either side of an estimated value from a sample that is likely to contain the true value for the whole population
burn rate
-The rate at which a company consumes cash - It can be used to determine when more cash must be raised
exchange rate
-The rate at which one currency converts to another
freight charge
-The rate established for the transportation of freight
internal rate of return
-The rate of compound interest at which the company's outstanding investment is repaid by proceeds from the project
discount rate
-The rate of interest charged to commercial banks by a central banking authority -promise figure in the master schedule - For the first period, the ATP is the sum ofthe beginning inventory plus the MPS quantity minus backlog for all periods until the item is master scheduled again - For all other periods, if a quantity has been scheduled forthat time period, then the ATP is this quantity minus all customer commitments for this and other periods until another quantity is scheduled in the MPS - Forthose periods where the quantity scheduled is zero, the ATP is zero (even if deliveries have been promised) - The promised customer commitments are accumulated and shown in the period where the item was most recently scheduled - Syn: incremental availabletopromise - See: availabletopromise
interest rate
-The ratio of the interest payment to the principal for a given unit of time - It is usually expressed as a percentage of the principal
elasticity of demand (supply)
-The ratio of the percentage change in quantity demanded (supplied) to the percentage change in price
average total cost
-The ratio of total costs (the sum of total fixed costs and total variable costs) over units produced
average variable cost
-The ratio of total variable costs over units produced
component
-The raw material, part, or subassembly that goes into a higherlevel assembly, compound, or other item - This term may also include packaging materials for finished items - See: ingredient, intermediate part
active inventory
-The raw materials, work in process, and finished goods that will be used or sold within a given period
internal customer
-The recipient (person or department) of another person's or department's output (good, service, or information) within an organization - See: customer, external customer
depletion
-The reduction in the value of a capital asset (usually a natural resource) in the balance sheet and charging this amount as an expense against income for the period - See: capital recovery
horizontal dependency
-The relationship between the components at the same level in the bill of material in which all must be available at the same time and in sufficient quantity to manufacture the parent assembly - See: vertical dependency
correlation
-The relationship between two sets of data such that when one changes, the other is likely to make a corresponding change - Ifthe changes are in the same direction, there is positive correlation - When changes tend to occur in opposite directions, there is negative correlation - When there is little correspondence or changes are random, there is no correlation
excess issue
-The removal from stock and assignment to a schedule of a quantity larger than the schedule quantity - Syn: overissue
dekitting
-The removal of accessories or parts kits from a product and returning eitherthe kit orthe main product without the kit to the store - May also refer to the allowance of the resale of kits or products without their parts kits
de expedite
-The reprioritizing of jobs to a lower level of activity - All extraordinary actions involving these jobs stop
delivery schedule
-The required or agreed time or rate of delivery of goods or services purchased for a future period
common carrier duties
-The requirements of common carriers to offer reasonable services and rates and to avoid discrimination
earmarked material
-The reserved material on hand that is physically identified, rather than merely reserved, in a balanceofstores record
capacity requirements
-The resources needed to produce the projected level of work required from a facility over a time horizon - Capacity requirements are usually expressed in terms of hours of work or, when units consume similar resources at the same rate, units of production
bid proposal
-The response to the written request from a potential customer asking for the submission of a quotation or proposal to provide goods or services - The bid proposal is in response to a request for proposal (RFP) or request for quote (RFQ)
deadhead
-The return of an empty transportation containerto its point of origin - See: backhauling
implied authority
-The right of an agent, when directed by a principal to accomplish a task, to do what is reasonably necessary to accomplish it
inefficiency risk
-The risk of losing customers because another firm has lower unit costs
business rules
-The rules for an organization, such as policies or procedures, that define or constrain some aspect of the business and are meant to provide guidance
dispersion
-The scattering of the observations of a frequency distribution around its average
chain of customers
-The sequence of customers who in turn consume the output of each other, forming a chain - For example, individuals are customers of a department store, which in turn is the customer of a producer, which is the customer of a material supplier
corporate culture
-The set of important assumptions that members of the company share - It is a system of shared values about what is important and beliefs about how the company works - These common assumptions influence the ways the company operates
interplant transfer
-The shipment of a part or product by one plant to another plant or division within the corporation - See: interplant demand, transfer pricing
cultural environment
-The sociocultural factors of the organization's external environment - It includes values, work ethics, education, religion, and consumer and ecological factors
business service
-The software aspect of electronic commerce - It performs activities (such as encryption) that are required to support business transactions
database management system (dbms)
-The software designed for organizing data and providing the mechanism for storing, maintaining, and retrieving that data on a physical medium (i -e -, a database) - A DBMS separates data from the application programs and people who use the data and permits many different views of the data
group decision support system (gdss)
-The software designed to support groups in unstructured decision making by supporting brainstorming, conflict resolution, voting, and othertechniques
equivalent days
-The standard hour requirements of a job converted to days for scheduling purposes
boilerplate
-The standard terms and conditions on a purchase order or other document - BOMAbbreviation for bill of material - bondA longterm debt of a firm
go/no go
-The state of a unit or product - Two parameters are possible: go (conforms to specification) and nogo (does not conform to specification) - goodA tangible product, merchandise, orware
cybernetics
-The study of control processes in mechanical, biological, electrical, and information systems
cost volume profit
-The study of how profits change with various levels of output and selling price - COTDAbbreviation for complete and ontime delivery
grades
-The sublabeling of items to identify their particular makeup and to separate one lot from other production lots of the same item
downgrade
-The substitution of a product of lower quality, value, or status for another, either in planning or in fact
automation
-The substitution of machine work for human physical and mentalwork,ortheuse of machines for work not otherwise able to be accomplished, entailing a less continuous interaction with humans than previous equipment used for similar tasks
laid down cost
-The sum of the product and transportation costs - The laiddown cost is useful in comparing the total cost of a product shipped from different supply sources to a customer's point of use - LANAcronym for local area network
fob destination
-The supplier pays for transportation to the buyer's location, where the buyer takes possession of the goods
deposition
-The sworn questioning, outside of court, of a potential witness by the other side's attorney
confiscation
-The taking of property without adequate compensation for it
downstream operation
-The tasks subsequent to the task currently being planned or executed
engineering characteristics
-The technical features designed into a product
information technology
-The technology of computers, telecommunications, and other devices that integrate data, equipment, personnel, and problemsolving methods in planning and controlling business activities - Information technology provides the means for collecting, storing, encoding, processing, analyzing, transmitting, receiving, and printing text, audio, orvideo information
cybercash
-The technology that enables online acceptance of credit cards, approving customers for payment before delivery is made
brand loyalty
-The tendency of some consumers to stay with a preferred product in spite of a competitor's advantages
free on board (fob)
-The terms of sale that identify where title passes to the buyer
credit period
-The time allowed a customer to pay an invoice in full
discount period
-The time allowed a customer to receive a cash discount for timely payment of an invoice
internal setup time
-The time associated with elements of a setup procedure performed while the process or machine is not running - Ant: external setup time
external setup time
-The time associated with elements of a setup procedure performed while the process or machine is running - Ant: internal setup time
delivery appointment
-The time at which goods are scheduled to arrive at a selected location, delivery cycleSyn: delivery lead time
interoperation time
-The time between the completion of one operation and the start ofthe next
in transit lead time
-The time between the date of shipment (at the shipping point) and the date of receipt (at the receiver's dock) - Orders normally specify the date by which goods should be at the dock - Consequently, this date should be offset by intransit lead time for establishing a ship date for the supplier
flowtime
-The time between the release of a job to a work center or shop until the job is finished
delivery lead time
-The time from the receipt of a customer order to the delivery of the product - Syn: delivery cycle
finish date
-The time of completion of a project or activity - It may be planned, actual, early, late, baseline, or target
build cycle
-The time period between a major setup and a cleanup - It recognizes cyclical scheduling of similar products with minor changes from one product/model to another
inventory conversion period
-The time period needed to produce and sell a product, measured from procurement of raw materials to the sale of the product
idle time
-The time when operators or resources (e -g -, machines) are not producing product because of setup, maintenance, lack of material, lack of tooling, or lack of scheduling
cost of sales
-The total cost attached (allocated) to units of finished product delivered to customers during the period - See: cost of goods sold
average fixed cost
-The total fixed cost divided by units produced - This value declines as output increases
gross requirement
-The total of independent and dependent demand for a component before the netting of onhand inventory and scheduled receipts
budget at completion (bac)
-The total planned budget for a project
activity based management (abm)
-The use of activity based costing information about cost pools and drivers, activity analysis, and business processes to identify business strategies improve product design, manufacturing, and distribution and remove waste from operations
computer assisted engineering
-The use of computerized tools to assist in the process of designing, developing, and maintaining software products and systems
computer aid design
-The use of computers in interactive engineering drawing and storage of designs - Programs complete the layout, geometric transformations, projections, rotations, magnifications, and interval (crosssection) views of a part and its relationship with other parts
computer aided mftg
-The use of computers to program, direct, and control production equipment in the fabrication of manufactured items
financial accounting
-The use of generally accepted accounting principles to prepare reports to external agencies such as investors and governmental agencies
integrated internet marketing (i2m)
-The use of internet facilities to sell products, influence stakeholder attitudes, and improve the company's image
global marketing
-The use of one marketing strategy in all countries in which a company operates, selling a single productworldwide
allocative efficiency
-The use of resources to produce those goods and services mostwanted by consumers
continuous process control
-The use of transducers (sensors) to monitor a process and make automatic changes in operations through the design of appropriate feedback control loops - Although such devices have historically been mechanical or electromechanical, there is nowwidespread use of microcomputers and centralized control
graphical forecasting methods
-The use of visual information to predict sales patterns - Typically involves plotting information in a graphical form - It is relatively easy to convert a spreadsheet into a graph that conveys the information visually - Trends and patterns of data are easier to spot, and extrapolation of previous demand can be used to predict future demands
form utility
-The value created by changing a good's form through a production process
bookings
-The value of all sales after discounts and rebates have been applied
accounts payable
-The value of goods and services acquired forwhich payment has notyet been made
declared value
-The value of goods declared on a bill of lading, used to determine a freight rate or limit the carrier's liability
accounts receivable
-The value of goods shipped or services rendered to a customer forwhich payment has notyet been received - Usually includes an allowance for bad debts
going concern value
-The value of the firm as a whole, ratherthan the sum of the values of the separate parts
inventory valuation
-The value of the inventory at either its cost or its market value - Because inventory value can change with time, some recognition is taken of the age distribution of inventory - Therefore, the cost value of inventory is usually computed on a FIFO, LIFO, or standard cost basis to establish the cost of goods sold
process capability index
-The value of the tolerance specified for the characteristic divided by the process capability - There are several types of process capability indices, including the widely used Cpk and Cp
inventory usage
-The value or the number of units of an inventory item consumed over a period of time
common cause variability
-The variability in product quality that results from numerous uncontrollable everyday factors, such as temperature, humidity, and tool wear - Syn: common variation - See: common causes
budgeted capacity
-The volume/mix of throughput on which financial budgets were set and overhead/ burden absorption rates established
buyer behavior
-The way individuals or organizations behave in a purchasing situation - The customeroriented concept identifies the wants, needs, and desires of customers and adapts the resources of the organization to deliver needsatisfying goods and services
alternate work center
-The work center where an operation is not normally performed but can be performed - Ant: primary work center
asset management efficiency
-This cost attribute describes the ability of the supply chain to efficiently use assets - Asset management strategies in a supply chain include inventory reduction and in sourcing versus outsourcing - Example metrics include inventory days of supply and capacity utilization - It is a SCOR performance attribute
landed cost
-This cost includes the product cost plus the costs of logistics, such as warehousing, transportation, and handlingfees - lap phasingSyn: overlapped schedule
extensible markup language (xml)
-This language facilitates direct communication among computers on the internet - Unlike the older hypertext markup language (HTML), which provides HTML tags giving instructions to a web browser about how to display information, XML tags give instructions to a web browser about the category of information
hybrid layout
-This layout combines two or more layout types
just in time purchasing
-This type of purchasing uses few suppliers who have longterm commitments with the organization - Longterm contracts are used, which enable the purchaser to develop and certify the quality process at the supplier
distribution cost
-Those items of cost related to the activities associated with the movement and storage of finished products - Distribution costs can include inventory costs, transportation costs, and order processing costs
jit supplier environment
-To effectively participate as a supplier under just in time (JIT), a company must supply components and subassemblies in exact quantities, delivery times, and quality - Shipments are made within narrow time windows that are rigidly enforced - Virtually every component must be delivered on time and be within specifications
intermediately positioned strategy
-To position awarehouse halfway between the supplier and the customer
drop ship
-To take the title of the product but not actually handle, stock, or deliver it (i -e -, to have one supplier ship directly to another or to have a supplier ship directly to the buyer's customer)
basic seven tools of quality (b7)
-Tools that help organizations understand their processes in order to improve them - The tools are the causeandeffect diagram (also known as the fishbone diagram or the Ishikawa diagram), check sheet, flowchart, histogram, Pareto chart, control chart, and scatter diagram - Syn: seven tools of quality - See: seven newer tools of quality, basic stockSyn: base inventory level
audit trail
-Tracing the transactions affecting the contents or origin of a record
fixed overhead
-Traditionally, all manufacturing costs other than direct labor and direct materialsthat continue even if products are not produced - Although fixed overhead is necessary to produce the product, it cannot be directly traced to the final product
data communications
-Transmission of data in computerreadable form using various transmission vehicles and paths
common carrier
-Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided - A common carrier must obtain a certificate of public convenience and necessity from the Federal Trade Commission for interstate traffic - Ant: private carrier
general overload
-Type of scheduling overload that typically occurs when MPS is overloaded and causes shortages in high level assemblies that become over due - May require reschedule if every period is fully loaded to avoid orders starting in the past
distribution center (dc)
-Typically a finished goods warehouse designed for demanddriven rapid distribution to retailers (retail distribution centers), wholesalers, or direct shipments to customers (order fulfillment centers) - Crossdockingwarehouses are another type of distribution center - See: crossdocking
control number
-Typically, the manufacturing order or schedule number used to identify a specific instance or period of production
hypothesis testing
-Use of statistical models to test conclusions about a population or universe based on sample information
downstream
-Used as a relative reference within a firm or supply chain to indicate moving in the direction of the end customer
business context summary
-Used in the S:Set the Scope phase of SCORto identify and document the business and establish a high level view of the competitive landscape - The summary is composed of a business description, challenges and opportunities, a value proposition, critical issues, risks, financial performance, internal structure profile, and external profile
coefficient of determination
-Used to measure the expected accuracy of a forecast measures the variation in one variable due to a different variable
dampeners
-User input parameters to suppress the reporting of insignificant or unimportant action messages
associative forecasting
-Uses one or more variables that are believed to affect demand in order to forecast future demand
central storage
-Using a central location for storing all inventory items in order to obtain more control of inventory and to improve inventory record accuracy - CEPAbbreviation for cost equalization point
human resource utilization
-Using labor to its fullest potential to maximize product or service output, hundredweight (cwt)One hundred pounds
economy of scope
-Using one versatile plant to produce many different products at a lower cost than making each product in different plants at a higher cost - See: economy of scale
contactless
-Using radio frequency identification or similar technologies to record data about an item electronically without physical contact with the item
bin trips
-Usually, the number of transactions per stockkeeping unit per unit of time
assignable variation
-Variation made by one or more causes that can be identified and removed - See: assignable cause, common causes
intellectual property
-Various legal entitlements that attach to certain names, written and recorded media, and inventions
industrial trucks
-Vehicles powered by hand, electricity, or propane for material handling activities in a warehouse - More flexible but slower and less constant than conveyors, and are not in a fixed position - Industrial trucks are the most common form of materials handling equipment
checking
-Verifying and documenting the order selection in terms of both product number and quantity
14 points
-W - Edwards Deming's 14 management practices to help companies increase their quality and productivity: (1) create constancy of purpose for improving products and services (2) adopt the new philosophy (3) cease dependence on inspection to achieve quality (4) end the practice of awarding business on price alone instead, minimize total cost by working with a single supplier (5) improve constantly and forever every process for planning, production, and service (6) institute training on the job (7) adopt and institute leadership (8) drive out fear (9) break down barriers between staff areas (10) eliminate slogans, exhortations, and targets for the workforce (11) eliminate numerical quotas for the workforce and numerical goals for management (12) remove barriers that rob people of pride of workmanship and eliminate the annual rating or merit system (13) institute a vigorous program of education and selfimprovement for everyone and (14) put everybody in the company to work to accomplish the transformation - Syn: Deming's 14 Points
unit load concept
-Waiting for a container or pallet to be filled before the material is moved
hazardous waste
-Waste, such as chemicals or nuclear material, that is hazardous to humans or animals and requires special handling
alternate part
-When a buyer can purchase similar products from different suppliers - This increases the buyer's power since the buyer does not have to rely on just one supplier
acceptable quality level (aql)
-When a continuing series of lots is considered, a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average
counterpurchase
-When an exporter buys unrelated goods or services from an importer
labor intensive
-When an operation has more expenditures on laborthan capital - See: capitalintensive
business clusters
-When businesses locate in close proximity for competition purposes
balking
-When customers will not join a queue when they learn how long it is - See: reneging
inventory balance location accuracy
-When the inventory count is accurate at specific locations - Measuring accuracy includes comparing the actual part number to the record of the part number, the actual count at the location to the record balance at the location, and the actual location to the record of the location
inventory accuracy
-When the onhand quantity is within an allowed tolerance of the recorded balance - This important metric usually is measured as the percent of items with inventory levels that fall within tolerance - Target values usually are 95 percentto 99 percent, depending on the value of the item - For logistical operations (location management) purposes, it is sometimes measured as the number of storage locations with errors divided by the total number of storage locations
fair return
-Within transportation, a profit level accomplishing a rate of return on investment that regulatory agencies deem acceptable given the level of risk
input
-Work arriving at a work center or production facility
indirect labor
-Work required to support production in general without being related to a specific product (e -g -, floor sweeping)
active load
-Work scheduled to be completed including items that may not yet be on hand
available work
-Work that is actually in a department ready to be worked on as opposed to scheduled work that may notyet be physically on hand - Syn: live load
accreditation
-certification by a recognized body of the facilities, capability, objectivity, competence, and integrity of an agency, service, operational group, or individual to provide the specific service or operation needed - For example, the Registrar Accreditation Board accredits those organizations that register companies to the ISO 9000 Series Standards
encryption
-changing readable words into another form, called a cipher, which hides the text's meaning
benchmarking
-comparing products, processes, and services to those of another organization thought to have superior performance - The benchmark target may or may not be a competitor or even in the same industry - There are seven common forms of benchmarking - See: competitive benchmarking, financial benchmarking, functional benchmarking, performance benchmarking, process benchmarking, product benchmarking, strategic benchmarking
joint replenishment
-coordinating the lot sizing and order release decision for related items and treating them as a family of items - The objective is to achieve lower costs because of ordering, setup, shipping, and quantity discount economies - This term applies equally to joint ordering (family contracts) and to composite part (group technology) fabrication scheduling - Syn: joint replenishment system, joint replenishment systemSyn: joint replenishment
crossbusiness and cross
-country coordination, thereby enabling economies of scope and an improved competitive position with regard to reducing costs, crosscountry subsidization, and so on - See: global strategy
business intelligence
-information collected by an organization on customers, competitors, products or services, and processes - Business intelligence provides organizational data in such a way that the organizational knowledge filters can easily associate with this data and turn it into information for the organization - Persons involved in business intelligence processes may use application software and other technologies to gather, store, analyze, and provide access to data, and to present that data in a simple, useful manner - The software aids in business performance management and aims to help consumers make better business decisions by offering them accurate, current, and relevant information - Some businesses use data warehouses because they are a logical collection of information gathered from various operational databases for the purpose of creating business intelligence
attribute inspection
-inspection for a go/nogo decision oryes/no decision orto countthe number of defects on a unit - See: attribute, attribute data
inventory ordering system
-inventory models for the replenishment of inventory - Independent demand inventory ordering models include fixed reorder cycle, fixed reorder quantity, optional replenishment, and hybrid models, among others - Dependent demand inventory ordering models include material requirements planning, kanban, and drumbufferrope, inventory plannerSyn: material planner (first definition)
inventory buffer
-inventory used to protect the throughput of an operation or the schedule against the negative effects caused by delays in delivery, quality problems, delivery of an incorrect quantity, and so on - Syn: inventory cushion - See: fluctuation inventory, safety stock
distribution inventory
-inventory, usually spare parts and finished goods, located in the distribution system (e -g -, in warehouses or in transit between warehouses and the consumer)
high
-level language (HLL)Relatively sophisticated computer language that allows users to employ a notation with which they are already familiar for example, COBOL (business), ALGOL (mathematical and scientific), FORTRAN, BASIC, Java, and Visual Basic - hilowA forklift truck with a standing operator
earliness
-lf a job is finished before its due date, the difference between its completion date and the due date - See: lateness, tardiness
key supply chain processes
-lmportant steps in producing, marketing, and servicing goods and services
pegging
-ln MRP and MPS, the ability to identify for a given item the sources of its gross requirements and/or allocations - Pegging can be thought of as active where used information - See: requirements traceability
bottom up replanning
-ln MRP, the process of using pegging data to solve material availability or other problems - This process is accomplished by the planner (not the computer system), who evaluates the effects of possible solutions - Potential solutions include compressing lead time, cutting order quantity, substituting material, and changing the master schedule
control center
-ln a centralized dispatching operation, the place at which the dispatching is done
target inventory level
-ln a min max inventory system, the equivalent of the maximum - Is the inventory level that results from manufacturing order quantity and replenishment frequency - Often called an order up to inventory level and is used in a periodic review system - TIL=Demand During Leadtime + Demand During Review Period + Safety Stock
chart of accounts
-ln accounting, a list of general ledger accounts used to track costs, revenues, assets, liabilities, and so on by category
common size income statement
-ln accounting, an income statement havingvalues expressed as a percentage of sales ratherthan dollarvalues - common variation
activity based budgeting (abb)
-ln activity based cost accounting, a budgeting process employing knowledge of activities and driver relationships to predict workload and resource requirements in developing a business plan - Budgets show the predicted consumption and cost of resources using forecasted workload as a basis - The company can use performance to budget in evaluating success in setting and pursuing strategic goals this activity is part of the activity based planning process
activity based planning (abp)
-ln activity based cost accounting, a continuing definition of activity and resource requirements (for both financial and operational systems) based on future demand for products or services by specific customer needs - Demand for resources is related to resource availability capacity overages and shortfalls are corrected - activity based budgeting is derived from the outputs of ABP
cost object driver
-ln activity based cost accounting, a numerical measure of the demand placed on one cost object by other cost objects
activity dictionary
-ln activity based cost accounting, a set of standard definitions of activities including descriptions, business process, function source, cost drivers, and other data important to activity based planning
bill of activities
-ln activity based cost accounting, a summary of activities needed by a product or other cost object - The bill of activities includes the volume and cost of each activity
cost pool
-ln activity based cost accounting, an aggregation of resources assigned to activities or activities assigned to cost objects - Items may be aggregated or disaggregated depending on how the data is to be used
cost object
-ln activity based cost accounting, anythingforwhich a separate cost measurement is desirable - This may include a product, customer, project, or otherwork unit
costelement
-ln activity based cost accounting, the lowest subdivision of a resource, activity, or cost object
cross subsidy
-ln activitybased cost accounting, the situation of assigning too much ortoo little cost to a cost object - This may lead to poor decision making relative to the economic goals of the organization
dummy activity
-ln activityonarrow diagramming, an activity with zero duration used to express a precedence relationship that can't otherwise be diagrammed - It is shown graphically with a dashed arrow
allocated item
-ln an MRP system, an item forwhich a picking order has been released to the stockroom but which has not yet been sent from the stockroom, allocated materialSyn: reserved material
attractability efficiency
-ln ecommerce, a measure of how well an organization persuades people who are aware of its website to actually use the site - See: conversion efficiency
conversion efficiency
-ln ecommerce, a measure of how well an organization transforms visits to its website into customer orders - See: attractability efficiency
awarenessefficiency
-ln ecommerce, a measurement of how well an organization informs people who have access to the web that the organization's website exists -
adaptive website
-ln ecommerce, a site that records a visitor's behavior, uses artificial intelligence software to learn this behavior, and chooses what to present to the visitor based on this learning, additive manufacturingSyn: 3D printing
blueprint
-ln engineering, a line drawing showing the physical characteristics of a part
holding company
-ln financial management, a firm that controls the voting stock of other firms, holding costsSyn: carrying costs
capital rationing
-ln financial management, the process of apportioning capital expenditures among prospective projects to conserve limited investment funds
frozenzone
-ln forecasting, the periods where no changes can be made to work orders based on changes in demand - This provides stability to the master production schedule
authentication key
-ln information systems, a key that ensures that data in an electronic business transaction is not changed - It can also be used as a form of digital signature
customer service life cycle
-ln information systems, a model that describes the customer relationship as havingfour phases: requirements, acquisition, ownership, and retirement
client
-ln information systems, a software program that is used to contact and obtain data from a server program on another computer - Each client program is designed to work with one or more specific kinds of server programs, and each server requires a specific kind of client - A browser is one type of client
attractor
-ln information systems, a website that, over time, continues to attract a large number of visitors
authentication
-ln information systems, the act of identifying a person or confirming the source of a message
heijunka
-ln justintime philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales
breadman
-ln kanban, an arrangement in which the customer does not specify the quantity to be delivered on a specific basis, but instead gives the supplier a set of guidelines - The delivery person determines the quantity according to these rules
closeness ratings
-ln layout analysis, to beginyielding - In layout analysis, measures of how beneficial it would be for one department to be located near another
uniform plant loading
-ln lean, the distribution of work between work stations so that the time required for each station to complete all tasks is as close to equal as possible - See: line balancing
economic value added
-ln managerial accounting, the net operating profit earned above the cost of capital for a profit center
batch sheet
-ln many process industries, a document that combines product and process definition - See: batch card
growth share matrix
-ln marketing, a division of products by relative market share and market growth rate - Products are divided as follows: (1) Cash cowshigh market share low growth rate - (2)Starshigh market share high growth rate -(3)Dogslow market share low growth rate - (4) Question markslow market share high growth rate - Sometimes this same set of terms is used to categorize products by market share and profitability
flow processing
-ln process systems development, work flows from one workstation to another at a nearly constant rate and with no delays - When producing discrete (geometric) units, the process is called repetitive manufacturing when producing nongeometric units over time, the process is called continuous manufacturing - A physicalchemical reaction takes place in the continuous flow process
finish to finish
-ln project management, a network requirement that activity A must be finished before subsequent activity B can finish - See: logical relationship - finishtoorderSyn: assembletoorder
activity code
-ln project management, a value that allows filtering or ordering of activities in reports
cost budgeting
-ln project management, accumulating the estimated costs of individual activities to arrive at a cost baseline
crashing
-ln project management, adding resources to critical path or nearcritical path activities on a project to shorten project duration after analyzing the project to identify the most costeffective course of action
critical path activity
-ln project management, any activity on a network's critical path as determined by the critical path method
independent float
-ln project management, the amount of float on an activity that does not affect float on preceding or succeeding activities - See: float, free float, total float
actual start date
-ln project management, the date on which an activity in a project was actually started
duration
-ln project management, the estimated length of time required by an activity
activity analysis
-ln project management, the identification and description of activities within an organization for the purpose of activity based costing
current finish time
-ln project management, the present estimate of an activity's finish time
earned value
-ln project management, the total value, including overhead, of approved estimates for completed activities or portions thereof
budgeted cost of work performed
-ln project management, this term has been replaced with the term earned value
budgeted cost of work scheduled
-ln project management, this term has been replaced with the term planned value
arrival
-ln queuing theory, a unit, such as a person or part, that arrives for service
arrival rate
-ln queuing theory, the value or distribution describing how often a person or thing arrives for service
disassembly bill of material
-ln remanufacturing, a bill of material used as a guide for the inspection in the teardown and inspection process - On the basis of inspection, this bill is modified to a bill of repair defining the actual repair materials and work required - Syn: teardown bill of material - See: repair bill of material
balancing operations
-ln repetitive justintime production, matching actual output cycle times of all operations to the demand or use for parts as required by final assembly and, eventually, as required by the market
closed loop systems
-ln reverse logistics, a system that accounts for the return flow of products for reuse, asset recovery, or recycling in a way that is costeffective and maximizes returns
backroom
-ln service operations, the part of the operation that is completed without direct customer contact - Many service operations contain both back room and front room operations - See: front room
dynamic congruence
-ln simulation, the situation where a physical system and a simulation model mimic one another closely
center
-ln statistics, values near the middle of results from a process
bandwidth
-ln telecommunications, a measurement of how much data can be moved along a communications channel per unit of time, usually measured in bits per second
employee stock ownership plan (esop)
-ln the United States, a program that encourages workers to purchase company stockgenerally tied into the compensation/benefits package - The intention is to give workers a feeling of participation in the management and direction of the company
equal employment opportunity (eeo)
-ln the United States, the laws prohibiting discrimination in employment because of race or color, sex, age, handicap status, religion, and national origin
early finish date (ef)
-ln the critical path method of project management, the earliest time at which a given activity is estimated to be completed - This date can change as the project is executed
backward pass
-ln the critical path method of project planning, working from the finish node backward through the network logic to the start node to determine the various late start dates and late finish dates - See: critical path method, forward pass, backward schedulingSyn: back scheduling
ingredient
-ln the process industries, the raw material or component of a mixture - See: component
future reality tree (frt)
-ln the theory of constraints, a logicbased tool for constructing and testing potential solutions before implementation - The objectives are to (1) develop, expand, and complete the solution and (2) identify and solve or prevent new problems created by implementingthe solution
evaporating cloud
-ln the theory of constraints, a logicbased tool for surfacing assumptions related to a conflict or problem - Once the assumptions are surfaced, actions to break an assumption and hence solve (evaporate) the problem can be determined
critical chain method
-ln the theory of constraints, a network planning technique for the analysis of a project's completion time, used for planning and controlling project activities - The critical chain, which determines project duration, is based on technological and resource constraints - Strategic buffering of paths and resources is used to increase project completion success - See: critical chain, critical path method
vati analysis
-ln the theory of constraints, a procedure for determining the general flow of parts and products from raw materials to finished products (logical product structure) - V logical structure starts with one or a few raw materials, and the product expands into a number of different products as it flows through divergent points in its routings - A logical structure is dominated by converging points - Many raw materials are fabricated and assembled into a few finished products - T logical structure consists of numerous similar finished products assembled from common assemblies, subassemblies, and parts - I products are different product which share resources and the flow is in a straight line sequence (e -g -, an assembly line) - Once the general parts flow is determined, the system control points (gating operations, convergent points, divergent points, constraints, and shipping points) can be identified and managed
buffer management
-ln the theory of constraints, a process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers) - By expeditingthis material into the buffers, the system helps avoid idleness at the constraint and missed customer due dates - In addition, the reasons items are missingfrom the buffer are identified, and the frequency of occurrence is used to prioritize improvement activities
control points
-ln the theory of constraints, strategic locations in the logical product structure for a product orfamily that simplify the planning, scheduling, and control functions - Control points include gating operations, convergent points, divergent points, constraints, and shipping points - Detailed scheduling instructions are planned, implemented, and monitored at these locations - Other work centers are instructed to work if they have work otherwise, be prepared for work - In this manner, materials flow rapidly through the facility without detailed work center scheduling and control
launch phase
-ln this last phase of product development, either the product is fed into the supply chain or the service is made available to consumers
cubic space
-ln warehousing, a measurement of space available or required in transportation and warehousing
hub and spoke systems
-ln warehousing, a system that has a hub (or center point) where sorting or transfers occur, and the spokes are outlets serving the destinations related to the hub
incentive arrangements
-lncentive contract that allows for the sharing of the cost responsibility between the buyer and seller - Incentives are incorporated into the contract to motivate the supplier to improve its performance in areas such as quality, ontime delivery, and customer satisfaction - There are three elements of an incentive agreement: target cost, target profit, and the sharing agreement
backroom costs
-lndirect costs for operations that do not add direct value to a product and may or may not be necessary to support its production
consigned stocks
-lnventories, generally of finished goods, that are in the possession of customers, dealers, agents, brokers, etc -, but remain the property of the manufacturer by agreement with those in possession - Syn: consignment inventory, vendorowned inventory - See: consignment
end of life inventory
-lnventory kept on hand to satisfy demand for products that are no longer being manufactured
bid pricing
-offering a specific price for each job rather than setting a standard price that applies for all customers
alliance development
-strengthening the capabilities of a key supplier
follow
-upMonitoring of job progress to see that operations are performed on schedule orthat purchased material or products will be received on schedule
end user (computing)
-user computingUse of computer resources by noninformation system personnel to enter, retrieve, manipulate, or print data
chance variation
-variation in process results occurring because of numerous small factors such as workers, equipment, raw material, work methods, and environmental differences
durability
-1) A measurement of time or amount of use before a product needs repair or replacement - 2) One of the eight dimensions of quality that refers to the length of a product's economic life
express
-1) Carrier's payment to its customers when ships, rail cars, or trailers are unloaded or loaded in less than the time allowed by contract and returned to the carrier for use - 2) The use of priority package delivery to achieve overnight or secondday delivery
end user
-1) The final consumer of a product - 2) The recipient of an output from a computer system
acceptance sampling
-1) The process of sampling a portion of goods for inspection rather than examining the entire lot - The entire lot may be accepted or rejected based on the sample even though the specific units in the lot are better or worse than the sample - There are two types: attributes sampling and variables sampling - In attributes sampling, the presence or absence of a characteristic is noted in each of the units inspected - In variables sampling, the numerical magnitude of a characteristic is measured and recorded for each inspected unit this type of sampling involves reference to a continuous scale of some kind - 2) A method of measuring random samples of lots or batches of products against predetermined standards
finishing lead time
-1) The time that is necessary to finish manufacturing a good after receipt of a customer order - 2) The time allowed for completing the good based on the final assembly schedule
hoshin
-A Japanese word meaning statement of objectives
implied contract
-A binding agreement inferred from the actions of the parties
cash budget
-A budget based on the planned cash receipts and disbursements of a plant, division, orfirm
fixed budget
-A budget of expected costs based on a specific level of production or other activity
contingency reserve
-A budget of money or time allowed over an initial estimate to reduce the likelihood of overruns
flexible budget
-A budget showing the costs and revenues expected to be incurred or realized over a period of time at different levels of activity, measured in terms of some activity base such as direct labor hours, direct labor costs, or machine hours - A flexible manufacturing overhead budget gives the product costs of various manufacturing overhead items at different levels of activity - See: step budget
internet service provider (isp)
-A business or organization that sells access to the internet and related services to consumers - Fora monthly fee, the service provider offers a software package, username, password, and access to the internet (via various technologies which enable users to browse the World Wide Web and send and receive email - The ISP may also provide a combination of services, including internet transit, domain name registration and hosting, web hosting, and colocation)
buyer/planner
-A buyerwho also does material planning - This term should not be confused with planner/ buyer, which is a synonym for supplier scheduler, buying capacitySyn: capacity buying
baseband coax
-A coaxial cable offering a single channel for text, voice, or video transmission
acknowledgment
-A communication by a supplier to advise a purchaserthat a purchase order has been received - It usually implies acceptance of the order by the supplier
carrier
-A company that provides air, sea, or land transportation services
group technology work cells
-A concentrated area for producing parts based on similar operations and/ or characteristics to use equipment and labor more efficiently
incentive contract
-A contract where the buyer and seller agree to a target cost and maximum price - Cost savings below the target are shared between buyer and seller - If actual cost exceeds the target cost, the cost overrun is shared between buyer and seller up to the maximum price
guarantee
-A contractual obligation of one entity to another asserting that a fact regarding a product is true - See: warranty
d chart
-A control chart for evaluating a process in terms of a demerit (or quality score) for example, a weighted sum of counts of various classified nonconformities - Syn: demerit chart
burden rate
-A cost, usually in dollars per hour, that is normally added to the cost of every standard production hour to cover overhead expenses
database
-A data processing filemanagement approach designed to establish the independence of computer programs from data files - Redundancy is minimized, and data elements can be added to, or deleted from, the file structure without necessitating changes to existing computer programs
distributed data processing (ddp)
-A data processing organizational concept underwhich computer resources of a company are installed at more than one location with appropriate communication links - Processing is performed at the user's location generally on a smaller computer and underthe user's control and scheduling, as opposed to processing for all users being done on a large, centralized computer system
inventory write off
-A deduction of inventory dollars from the financial statement because the inventory is of less value - An inventory writeoff may be necessary because the value of the physical inventory is less than its book value or because the items in inventory are no longer usable
blocking bug
-A defect that prevents a thorough investigation as to its cause or that prevents shipment of a product
inbound stockpoint
-A defined location next to the place of use on a production floor - Materials are brought to the stockpoint as needed and taken from it for immediate use - Inbound stockpoints are used with a pull system of material control
feature
-A distinctive characteristic of a good or service - The characteristic is provided by an option, accessory, or attachment - For example, in ordering a new car, the customer must specify an engine type and size (option), but need not necessarily select an air conditioner (attachment) - See: accessory, attachment, option
client/server system
-A distributed computing system in which work is assigned to the computer best able to perform it from among a network of computers - CLINAbbreviation for contract line items number, clock cardSyn: time card
improvement program charter
-A document detailing the structure of the improvement program including resources, program schedule, organization, deliverables, and expected benefits
export license
-A document received from a governmental agency authorizing a certain quantity of an export to be sent to a given country
freight settlement
-A document that compares the freight order invoice as received to the invoice as expected and authorizes payment if the documents are consistent
communication management plan
-A document that describes the communications needs and expectations within a project, including format, dates, locations, and responsibilities
charge ticket
-A document used for receiving goods and charging those goods to an operating cost center
fuzzy logic
-A field of logic based on fuzzy sets that is, sets in which membership is probabilistic rather than deterministic
item master file
-A file containing all item master records for a product, product line, plant, or company
detail file
-A file that contains manufacturing, routing, or specification details - See: master file
extrinsic forecasting method
-A forecast method using a correlated leading indicator for example, estimating furniture sales based on housing starts - Extrinsic forecasts tend to be more useful for large aggregations, such as total company sales, than for individual product sales - Ant: intrinsic forecast method - See: quantitative forecasting technique
break bulk warehousing
-A form of crossdocking in which the incoming shipments are from a single source or manufacturer
adaptive smoothing
-A form of exponential smoothing in which the smoothing constant is automatically adjusted as a function of forecast error measurement
java
-A generalpurpose computer language created by Sun Microsystems
interactive customer care
-A generic term for a variety of services provided over the internet - These services include customer service and technical support
bribes
-A gift, money, or a favor given by one person to another intending to influence the person's decision, judgment, or conduct - Offering or accepting bribes is illegal in most countries and aviolation of the UN Global Compact - A complicatingfactor is that bribes are expected parts of business transactions in some cultures - Syn: facilitating payments
administrative contracting officer
-A government employee who ensures compliance with the terms and conditions of contracts
control chart
-A graphic comparison of process performance data with predetermined computed control limits - The process performance data usually consists of groups of measurements selected in the regular sequence of production that preserve the order - The primary use of control charts is to detect assignable causes of variation in the process as opposed to random variations - The control chart is one of the seven tools of quality - Syn: process control chart
demand curve
-A graphic description of the relationship between price and quantity demanded in a market, assuming that all other factors stay the same - Quantity demanded of a product is measured on the horizontal axis for an array of different prices measured on the vertical axis
blocked operations
-A group of operations identified separately for instructions and documentation but reported as one
dispatch list
-A listing of manufacturing orders in priority sequence - The dispatch list, which is usually communicated to the manufacturing floor via paper or electronic media, contains detailed information on priority, location, quantity, and the capacity requirements of the manufacturing order by operation - Dispatch lists are normally generated daily and oriented by work center - Syn: work center schedule, priority report
account manager
-A manager who has direct responsibility for a customer's interest
fabricator
-A manufacturer that turns the product of a converter into a larger variety of products - For example, a fabricator may turn steel rods into nuts, bolts, and twist drills, or may turn paper into bags and boxes
a3 method
-A means of compactly describing a business process
blanket order release
-A message that is used to release a quantity from a blanket order
budget
-A plan that includes an estimate of future costs and revenues related to expected activities
focused factory
-A plant established to focus the entire manufacturing system on a limited, concise, manageable set of products, technologies, volumes, and markets precisely defined by the company's competitive strategy, technology, and economics - See: cellular manufacturing
balance of trade
-A plus or minus amount found by comparing a country's exports of merchandise to its imports
cost equalization point (cep)
-A point or quantity at which the cost curves of two manufacturing methods have an equal value
forward flow scheduling
-A procedure for building process train schedules that starts with the first stage and proceeds sequentially through the process structure until the last stage is scheduled
cut off control
-A procedure for synchronizing cycle counting and transaction processing
failure mode effects analysis (fmea)
-A procedure in which each potential failure mode in every subitem of an item is analyzed to determine its effect on other subitems and on the required function of the item
contingency planning
-A process for creating a document that specifies alternative plans to facilitate project success if certain risk events occur
automated flow line
-A production line that has machines linked by automated parts transfer and handling machines
hybrid production method
-A production planning method that combines the aspects of both the chase and level production planning methods - Syn: hybrid manufacturing process, hybrid strategy - See: chase production method, level production method, production planning method
activity on node network (aon)
-A project management network diagram in which the passage of time, via activities, takes place on circles called nodes - Each node contains a number representing the estimated duration of the activity it represents - Nodes are connected by arrows that show precedence relationships
fast tracking
-A project schedule compression technique that overlaps (or performs in parallel) activities that would ordinarily be performed sequentially
campaign
-A series of batches of the same product run together (back to back)
customer/order fulfillment process
-A series of customers' interactions with an organization through the order filling process, including product/service design, production and delivery, and order status reporting, customer order promisingSyn: order promising
batch manufacturing
-A type of manufacturing process in which sets of items are moved through the different manufacturing steps in a group or batch, batch numberSyn: lot number
common parts bill of material
-A type of planning bill that groups common components for a product or family of products into one bill of material - Is structured to a pseudoparent item number - Syn: common parts bill
beta distribution
-A type of probability distribution often used to model activity times
endogenous variable
-A variable whose value is determined by relationships included within the model
assets
-An accounting/financial term (balance sheet classification of accounts) representing the resources owned by a company, whether tangible (cash, inventories) or intangible (patent, goodwill) - Assets may have a shortterm time horizon—such as cash, accounts receivable, and inventory—or a longterm value (such as equipment, land, and buildings) - See: balance sheet, liabilities, owner's equity
current assets
-An accounting/financial term (balance sheet classification of accounts) representing the shortterm resources owned by a company, including cash, accounts receivable, and inventories - See: assets, balance sheet
disciplinary action
-An action taken to enforce compliance with organizational rules and policies
equal employment opportunity commission (eeoc)
-An administrative agency in the United States that oversees Title VII of the Civil Rights Act, which prohibits employment discrimination based on race, color, religion, sex, or national origin
duty free zone
-An area where merchandise is brought into the country for further work to be done - Duty is paid only on the items brought in, normally at a lower rate than finished goods, and paid only at the time of sale, duty paid warehousesSee: public warehouse
flextime
-An arrangement in which employees are allowed to choose work hours as long as the standard number ofwork hours is worked
assembly line
-An assembly process in which equipment and work centers are laid out to follow the sequence in which raw materials and parts are assembled - See: line, production line
safety lead time
-An element of time added to normal lead time to protect against fluctuations in lead time so that an order can be completed before its real need date - When used, the MRP system, in offsetting for lead time, will plan both order release and order completion for earlier dates than itwould otherwise - Syn: protection time, safety time
cloud computing
-An emerging way of computing where data is stored in massive data centers that can be accessed from any connected computers over the internet
group technology (gt)
-An engineering and manufacturing philosophy that identifies the physical similarity of parts (common routing) and establishes their effective production - It provides for rapid retrieval of existing designs and facilitates a cellular layout
abc inventory control
-An inventory control approach based on the ABC classification - ABMAbbreviation for activity based management
backsourcing
-Company processes that, previously handled externally, have been reassigned internally
cyclical demand
-Demand influenced by increases and decreases in the economy over time
activity resource estimating
-Estimating the types and amounts of resources that will be needed for various project activities
hazmat
-Hazardous material defined by environmental laws and legal precedents - A product has been defined as hazardous by regulations that impose stiff fines if the regulations are ignored
acceptance plan
-How an organization determines which product lots to accept or reject based on samples - See: acceptance sampling
information visibility
-How extensive information is shared throughout a firm and with other stakeholders
efficiency variance
-In cost accounting, the difference between the actual volume of a resource used and the budgeted volume multiplied by the budgeted or standard price
cost variance
-In cost accounting, the difference between what has been budgeted for an activity and what it actually costs
functional product
-Mature products that tend to have a low profit margin and a predictable demand, functional requirementsSyn: critical characteristics
functional test
-Measure of a production component's ability to work as designed to meet a level of performance
assembly chart
-Overview of a product containing assembly and subassembly operations, materials, and components
empirical
-Pertaining to a statement or formula based upon experience or observation ratherthan on deduction ortheory
bulk packing
-Placing several small packages in a larger container to prevent damage or theft
business continuity planning
-Plansto ensure that an organization is capable of continuing to deliver products or services at acceptable predefined levels following a disruptive incident - The plans are developed by identifying potential threats to an organization and the impacts to business operations those threats might cause - These plans provide a framework for building organizational resilience with the capability of an effective response to safeguard the interests of key stakeholders, reputation, brand, and valuecreating activities
exports
-Products produced in one country and sold in another
flow rate
-Running rate the inverse of cycle time for example, 360 units per shift (or 0 -75 units per minute)
gross profit margin rate
-Sales minus cost of goods sold then divided by sales
floor stocks
-Stocks of inexpensive production parts held in the factory, from which production workers can draw without requisitions - Syn: bench stocks, expensed stocks
functional silo syndrome
-Suboptimization of an organization's goals due to members of specific functions developing more loyalty to the function's group goals than to the organization's goals
customer managed inventory
-Supply chain replenishment model wherein the customer controls the physical replenishment of spares or parts
certified in integrated resource management (cirm)
-The APICS designation that is a recognition of a high level of professional knowledge in enterprisewide processes and activities
certified in production and inventory management (cpim)
-The APICS designation that is a recognition of a high level of professional knowledge in production and inventory management
certified fellow in production and inventory management (cfpim)
-The APICS designation that is a recognition of superior knowledge of, performance in and contribution to the profession
bookvalue
-The accountingvalue of an asset
cumulative forecast error (cfe)
-The accumulated total of all forecast errors, both positive and negative - This sum will approach zero ifthe forecast is unbiased - Syn: sum of deviations
bounded
-The adjustment of a shop order quantity of a parent to use the remaining units of a component, raw material, or lot
consumption
-The amount of each billofmaterial component used in the production process to make the parent
customer tolerance time
-The amount of time potential customers are willing to wait forthe delivery of a good or a service - Syn: demand lead time
general and administrative expenses (g&a)
-The category of expenses on an income statement that includes the costs of general managers, computer systems, research and development, etc
customer defined attributes
-The characteristics of a good or service that are viewed as being important in addressing the needs of the customer - See: house of quality
fee
-The charge for the use of the contractor's organization for the period and to the extent specified in the contract
indirect labor cost
-The compensation paid to workers whose activities are not related to a specific product
employee involvement (el)
-The concept of using the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and includingthem and their ideas in decisionmaking processes appropriate to their areas of expertise - Employee involvement focuses on quality and productivity improvements - Syn: people involvement
datadate
-The date through which a report has provided actual accomplishment - Syn: timenow date
bill of material accuracy
-The degree to which a list of specified items conforms to administrative specifications and with correct quantities
calculated usage
-The determination of usage of components or ingredients in a manufacturing process by multiplying the receipt quantity of a parent by the quantity per of each component or ingredient in the bill or recipe, accommodating standard yields
functional systems design
-The development and definition of the business functions to be accomplished by a computer system (i -e -, preparing a statement of the proposed computer system's data input, data manipulation, and information output in common business terms that can be reviewed, understood, and approved by a user organization) - This statement, after approval, provides the basis for the computer system's design
deviation
-The difference (usually the absolute difference) between a number and the mean of a set of numbers, or between a forecast value and the actual value
forecast error
-The difference between actual demand and forecast demand, stated as an absolute value or as a percentage - See: average forecast error, forecast accuracy, mean absolute deviation, tracking signal
gap
-The difference between actual performance level and expected performance level
rate of return on investment
-The efficiency ratio relating profit or cash flow incomes to investments - Several different measures of this ratio are in common use
central processing unit (cpu)
-The electronic processing unit of a computer where mathematical calculations are performed
electronic document
-The electronic representation of a document that can be printed
industrial engineering
-The engineering discipline concerned with facilities layout, methods measurement and improvement, statistical quality control, job design and evaluation, and the use of management sciences to solve business problems
contract target cost
-The estimated cost negotiated in a contract
configuration control
-The function of ensuring that the product being built and shipped corresponds to the product that was designed and ordered - This means that the correct features, customer options, and engineering changes have been incorporated and documented
deblend
-The further processing of a product to adjust specific physical and chemical properties to within specification ranges
green field
-The initiation of a new process where no similar initiatives have previously existed
cumulative lead time
-The longest planned length of time to accomplish the activity in question - It is found by reviewing the lead time for each bill of material path below the item whichever path adds up to the greatest number defines cumulative lead time - Syn: aggregate lead time, combined lead time, composite lead time, critical path lead time, stacked lead time - See: planning horizon, planning time fence
critical path
-The longest sequence of activities through a network - The critical path defines the planned project duration - See: critical activity, critical path method
critical chain
-The longest sequence of dependent events through a project network, considering both technical and resource dependencies in completing the project - The critical chain is the constraint of a project
statistical safety stock
-The mathematical determination of safety stock quantities considering forecast errors, lot sizes, desired customer service levels, and the ratio of lead time to the length ofthe forecast period - Safety stock is frequently the product of the appropriate safety factor and the standard deviation or mean absolute deviation ofthe distribution of demand forecast errors - Should not be used for seasonal items -
average outgoing quality limit (aoql)
-The maximum average outgoing quality over all possible levels of incoming quality for a given acceptance sampling plan and disposal specification
freight forwarder
-The middle man between the carrier and the organization shipping the product - Often combines smaller shipments to take advantage of lower bulk costs
law of variability
-The more variability that exists in a process, the less productive that process will be
interstate commerce
-The movement of persons or property across one or more state lines for business purposes
available time
-The number of hours a work center can be used, based on management decisions regarding shift structure, extra shifts, regular overtime, observance of weekends and public holidays, shutdowns, and the like - See: capacity available, utilization
incoming business
-The number of orders, the dollar value of orders, or the quantity of units that have been received on orders from customers - This volume is particularly important to the forecaster, who must compare incoming business against the forecast ratherthan against actual shipmentswhen actual shipments do not reflect true customer demand - This situation may exist because of backordered items, bottlenecks in the shipping room, and so forth
count frequency
-The number of times an item in inventory is counted during a period of time - Generally, highvalue inventories are counted more frequently than lowvalue items, although properties other than value can influence the frequency - countperunitchartSyn: U chart
inventory turnover
-The number of times that an inventory cycles, or turns over, during the year - A frequently used method to compute inventory turnover is to divide the annual cost of sales by the average inventory level - For example, an annual cost of sales of $21 million divided by an average inventory of $3 million means that inventory turned over seven times - Syn: inventory turns, turnover - See: inventory velocity, inventory turnsSyn: inventory turnover
acclimatization
-The physiological, emotional, and behavioral adjustment to changes in the environment - Proper performance depends on adequate acclimatization to the workplace, including significant mechanical features such as seat height and lighting - Heat, cold, humidity, and light are important physiologically
front room
-The place where the customer comes into contact with the service operation - Many service operations contain frontroom and backroom operations - See: back room
franchise extension
-The placement of a brand name on products outside the company's present sphere of activity
cumulative mrp
-The planning of parts and subassemblies by exploding a master schedule, as in MRP, except that the masterscheduled items and therefore the exploded requirements are timephased in cumulative form - Usually these cumulative figures covera planningyear
funds flow management
-The planning, execution, and control of cash receipts and disbursementswith the objective of maintaining the cash balance at a preset positive value - Syn: cash flow management
enterprise resources management
-The planning, execution, control, and measurement functions required to effectively operate an enterprise
indifference point
-The point at which two options create the same costs for a specific output level
honeycombing
-The practice of moving, in an orderly fashion, a pallet of merchandise to an area where the space is not exhausted, resulting in a vacant space not usable for the storage of other items - This is one of the hidden costs of warehousing
format
-The predetermined arrangementof the characters of data for computer input, storage, or output
business planning
-The process of constructing the business plan - See: business plan
activity sequencing
-The process of defining and documenting dependencies among project activities
bill of material explosion
-The process of determining component identities, quantities per assembly, and other parentcomponent relationship data for a parent item - Explosion may be single level, indented, or summarized
capacity planning
-The process of determining the amount of capacity required to produce in the future - This process may be performed at an aggregate or productline level (resource requirements planning), at the masterscheduling level (roughcut capacity planning), and at the material requirements planning level (capacity requirements planning) - See: capacity requirements planning, resource planning, roughcut capacity planning
implosion
-The process of determining the whereused relationship for a given component - Implosion can be singlelevel (showing only the parents on the next higher level) or multilevel (showing the ultimate toplevel parent) - See: whereused list - Ant: explosion
priority planning system
-The process of determining what material is needed and when - MPS and MRP are used to maintain proper due dates on required material -
instantaneous receipt
-The receipt of an entire lotsize quantity in a very short period of time
consignee
-The receiver of a shipment of freight
activity definition
-The specific work to be performed that defines a project deliverable
inventory drivers
-Those conditions that would lead a company to hold inventory
interarrival time
-Time between the arrival of two sequential customers or events
global sourcing
-Using international sources for supplies
feasible economic order quantity
-When solving a quantity discount problem, the economic order quantity is feasible if the computed number can be purchased at the cost used in the EOQ problem ratherthan at some other discount quantity - For example, consider a product that sells for $10 for 1 to 99 units, $9 for 100 to 499 units, and $8 for 500 for more units - If the quantity discount solution calls for purchasing 800 units at the $8 value, the solution is feasible however, if the quantity discount solution calls for purchasing 250 units at this cost, the solution is not feasible because the purchase quantity is not consistent with the purchase price for that quantity
black box design
-When suppliers or company functions are given general design guidelines and are requested to complete the technical details
blend off
-ln process industries, the rework of material by introducing a small percentage into another run of the same product
earned value method
-ln project management, a comparison of planned activity time and cost to actual activity time and cost to see if a project is on schedule by time and budget
finish to start
-ln project management, a network requirement that activity A must be finished before activity B can start - See: logical relationship
baseline
-ln project management, the approved timephased plan for the schedule or cost of a piece of work, including approved changes
billing and collection costs
-ln transportation, the costs related to issuing invoices or bills - These amounts can be reduced by combining shipments in an orderto limit transportation frequency
customer service ratio
-1) A measure of delivery performance of finished goods or other cargo, usually expressed as a percentage - In a maketostock company, this percentage usually represents the number of items or dollars (on one or more customer orders) that were shipped on schedule for a specific time period, compared to the total that were supposed to be shipped in that time period - Syn: customer service level, fill rate, orderfill ratio, percent of fill - Ant:stockout percentage - 2) In a maketoorder company, usually some comparison of the number of jobs or dollars shipped in a given time period (e -g -, a week) compared with the number of jobs or dollars that were supposed to be shipped in that time period
demand deposits
-Deposits that can be withdrawn on demand or paid to a third party by check
capacity pegging
-Displaying the specific sources of capacity requirements - This is analogous to pegging in MRP, which displays the source of material requirements
controlled access
-Fenced or walled areas within a warehouse oryard usually monitored by security cameras - These areas are used to store highvalue items
interpolation
-The process of findingvalues of data or a function between two known values - Interpolation may be performed numerically or graphically
computer aided engineering
-The process of generating and testing engineering specifications on a computerworkstation
late start date (ls)
-In the critical path method of project management, the last date upon which a given activity can be started without delaying the completion date of the project
average inventory
-One half the average lot size plus the safety stock, when demand and lot sizes are expected to be relatively uniform overtime - The average can be calculated as an average of several inventpory observations over several periods - The repleniahment cycle determines the order quantity - Average Inventory=(1/2*Average Lot Size)+Safety Stock
lag capacity strategy
-Not adding capacity until the firm is operating at or beyond full capacity - This keeps unit costs minimized by working at full capacity, but does not satisfy total demand
intangible
-One distinguishing feature of pure services - Pure services cannot be inventoried or carried in stock for long periods of time
air pollutant emissions
-One of the five green SCOR metrics - Includes emissions of major pollutants: Cox, Nox, Sox, VOCs and Particulate - These are the major emissions that the US EPA tracks
improve phase
-One of the six sigma phases of quality - In this phase, the improvements to products and/or processes are adopted - See: designmeasureanalyzeimprovecontrol process
bottom up planning
-Planning for resource requirements by starting at the bottom of the bill of material or services, estimating the resources required to produce each product or service, and then adding the resources up
end of life management
-Planning for the phaseout of one product and the phasein of a new product to avoid both the excessive inventory of and an outofstock situation with the old product before the replacement product is available
field service parts
-Service parts kept in distribution centers orwarehouses - field warehouseSyn: distribution center - FIFOAcronym for first in, first out - fileAn organized collection of records
involuntary services
-Services that are not sought by customers for example, those of hospitals and prisons
conference room pilot
-Simulation of all business processes from end to end within the new information system in a controlled environment
cash spin orfree cash spin
-The advantage of reducing inventory in the supply chain and reallocating the saved capital in a more profitable direction
direct materials cost
-The acquisition cost of all materials used directly in the finished product
inventory pooling
-The act of holding inventory in a single location instead of multiple locations
100 percent inspection
-The act of inspecting or testing every item in an incoming or outgoing lot
implementation
-The act of installing a system into operation - It concludes the system project with the exception of appropriate followup or post installation review
continuous improvement
-The act of making incremental, regular improvements and upgrades to a process or product in the search for excellence
inventory control
-The activities and techniques of maintaining the desired levels of items, whether raw
asset value
-The adjusted purchase price of the asset plus any costs necessary to prepare the asset for use
accident prevention
-The application of basic scientific and technical principles—including education and training—to detect, analyze, and minimize hazards with the objective of avoiding accidents
backflush costing
-The application of costs based on the output of a process - Backflush costing is usually associated with repetitive manufacturing environments
configuration
-The arrangement of components as specified to produce an assembly
failure analysis
-The collection, examination, review, and classification of failures to determine trends and to identify poorly performing parts or components
capital structure
-The combination of permanent shortterm debt, longterm debt, preferred stock, and common equity used to finance a firm
fivewhys
-The common practice in total quality management is to ask why five times when confronted with a problem - By the time the answer to the fifth why is found, the ultimate cause of the problem is identified - Syn: five Ws - See: root cause analysis
calibration
-The comparison of a measurement instrument or system of unverified accuracy with a measurement instrument or system of known accuracy to detect any variation from the required performance specification
direct labor cost
-The compensation of workers who are involved in converting material into a finished product, direct loadingSyn: crossdocking
fully qualified domain name
-The complete, registered address (URL) of an internet site
cross docking
-The concept of packing products on incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination - The items are carried from the incoming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse - Crossdocking reduces inventory investment and storage space requirements - Syn: direct loading
brand recognition
-The degree to which customers recognize a particular brand identity and associate itwith a particular product line relative to other available brands
avoidable delay
-The delay controlled by a worker and therefore not allowed in the job standard
classification of defects
-The delineation of possible defects in a unit, classified by seriousness: critical (A), major (B), minor (C), or incidental (D)
distribution resource planning (drp11)
-The extension of distribution requirements planning into the planning of the key resources contained in a distribution system (warehouse space, workforce, money, trucks, freight cars, etc -)
financial management
-The function concerned with ensuringthe availability of funds for research and development, operations, and marketing
contract accounting
-The function of collecting costs incurred on a given job or contract, usually in a progress payment situation - Certain US government contracting procedures require contract accounting
job design
-The function of describing a job with respect to its content and the methods to be used - Criteria such as the degree of job specialization, job enrichment, and job enlargement are useful in designing work content
break even point
-The level of production or the volume of sales atwhich operations are neither profitable nor unprofitable - The breakeven point is the intersection of the total revenue and total cost curves - See: total cost curve
certificate of free sale
-A certificate that attests thatthe goods can be legally sold in the country of export - The intent is to prevent defective products from being exported
certificate of public convenience and necessity
-A certificate that grants authority to a particular carrier, enabling that carrierto act as a common carrier in serving and transporting commodities to a specific area
certificate of insurance
-A certificate, required under some terms of trade, that attests that a particular shipment has insurance coverage - It is provided by the exporter's insurance company
certificate of analysis
-A certification of conformance to quality standards or specifications for products or materials - It may include a list or reference of analysis results and process information - It is often required for material custody transfer
iso 9000.2000
-A certification process requiring a thirdparty audit that defines in broad terms what must be done to manage company quality and to document these quality processes - It recently was updated by ISO 9000:2008
claim
-A charge made against a company because of loss or damage
labor grade
-A classification of workers whose capability indicates their skill level or craft - See: skillbased compensation, skills inventories
broadband
-A coaxial cable offering several channels for text, voice, and/or video transmission
c chart
-A control chart for evaluating the stability of a process in terms of the count of events of a given classification occurring in a sample - Syn: count chart, number defective chart
average chart
-A control chart in which the subgroup average, X bar, is used to evaluate the stability of the process level
bubble chart
-A diagram that attempts to display the interrelationships of systems, functions, or data in a sequential flow - It derives its name from the circular symbols used to enclose the statements on the chart
block diagram
-A diagram that shows the operations, interrelationships, and interdependencies of components in a system - Boxes, or blocks (hence the name), represent the components connecting lines between the blocks represent interfaces - There are two types of block diagrams: (1) Functional block diagrams that show a system's subsystems and lowerlevel products, their interrelationships, and interfaces with other systems - (2) Reliability block diagrams, which are similar to functional block diagrams except they are modified to emphasize those aspects influencing reliability - See: flowchart
check digit
-A digit added to each number in a coding system that allows for detection of errors in the recording of the code numbers - Through the use of the check digit and a predetermined mathematical formula, recording errors such as digit reversal or omission can be discovered
aesthetics
-A dimension of product quality that intends to appeal to the senses
empathy
-A dimension of service quality referring to caring, individualized attention from a service firm
heuristics
-A form of problem solving in which the results or rules have been determined by experience or intuition instead of by optimization - Heuristics can be used in such areas as forecasting, lot sizing, or determining production, staff, or inventory levels
experimental research
-A form of research (sometimes used in marketing research) where matched sets of people are controlled for certain variables (such as income, age, and so on) while othervariables (such as products offered) are varied to test research questions - See: marketing research
freight claim
-A formal legal claim filed by the transportation buyer that the carrier failed to protect the freight properly, seeking monetary compensation for damaged freight, delayed or incorrect deliveries, overcharges, or other service failures - The amount of damages can be up to the value of the goods had they been safely delivered on time
experimental design
-A formal plan that details the specifics for conducting an experiment, such as which statistical techniques and responses, factors, levels, blocks, and treatments are to be used
cache
-A highspeed device used within a computer to store frequently retrieved data
equipment class
-A means to describe a group of equipment with similar characteristics for purposes of planning and scheduling
carbon footprint
-A measure of carbon emissions from a person, organization, building, or operation
40 foot equivalent unit
-A measure of container capacity that is equivalent to two 20foot equivalency
conformance perspective
-A measure of how closely a product or service performs to its intended quality
contact efficiency
-A measure of how well an organization transforms website hits into visits
cost performance index (cpi)
-A measure of project efficiency - Earned value over actual costs
correlation coefficient
-A measure of the degree of correlation between two values - The coefficient ranges from1 to 1
government market
-A market in which most or all buyers consist of agencies of federal, state, or local governments - See: consumer market, industrial market, institutional market
institutional market
-A market in which most or all customers are one of the following: schools, hospitals, prisons, or other institutions that provide products and services to individuals who are under their care - See: consumer market, government market, industrial market
forecast accuracy
-A measurement of forecast usefulness, often defined as the average difference between the forecast value and the actual value - Syn: sales forecast - See: forecast error
analog
-As applied to an electrical or computer system, the capability of representing data in continuously varying physical phenomena (as in a voltmeter) and converting it into numbers
aggregate unit of capacity
-Combined capacity unit of measure when a variety of outputs exists
bundling
-Combining two or more products or services into a single transaction - burdenSyn: overhead
direct marketing
-Communicating directly with consumers in an effort to elicit a response or a transaction
design for quality
-A product design approach that uses quality measures to capture the extent to which the design meets the needs of the target market (customer attributes), as well as its actual performance, aesthetics, and cost - See: total quality engineering
bucket
-A time period, usually a week
gateway work center
-A work center that performs the first operation of a particular routing sequence
knowledge worker
-A worker whose job is the accumulation, transfer, validation, analysis, and creation of information
flexible workforce
-A workforce whose members are crosstrained and whose work rules permit assignment of individual workers to different tasks
international logistics
-AII functions concerned with the movement of materials and finished goods on a global scale
control
-Comparing actual to planned performance and taking corrective action, as needed, to align performance with plan
consortia trade exchanges (ctx)
-An online marketplace, usually owned by a third party, that allows members to trade with each other - Such sites lower members' search costs and enable lower prices for the buyer
divergent point
-An operation in a production process in which a single material/component enters and, after processing, can then be routed to a number of different downstream operations
convergent point
-An operation in a production process where multiple materials/parts/components are combined into a single component - An assembly operation is an example of a convergent point
block scheduling
-An operation schedulingtechnique where each operation is allowed a block of time, such as a day or a week
customer order
-An order from a customer for a particular product or number of products - It is often referred to as an actual demand to distinguish it from a forecasted demand - See: booked orders
experimental order
-An order generated by the laboratory, research and development, or engineering group that must be run through regular production facilities with potential future product or market development as a project or team goal - Syn: engineering order, laboratory order, pilot order, R&D order
joint order
-An order on which several items are combined to obtain volume or transportation discounts
anticipation order
-An order placed before an item has been made available for delivery
demand based order quantity
-An order system using forecast or derived demand for one or more future periods (rather than a fixed quantity, as in economic order quantity)
hand balance
-The quantity shown in the inventory records as being physically in stock
green reverse logistics
-The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals
calendar unit
-The smallest unit of time in a project plan
break even time
-The total elapsed time of a technology transfer beginning with a scientific investigation and ending when the profits from a new product offset the cost of its development
honeycomb loss
-The usable empty storage space in a stack created by storing only a single stockkeeping unit in the stack to permit better access
branding
-The use of a name, term, symbol, or design, or a combination of these, to identify a product
computer aided inspection and test
-The use of computer technology in the inspection and testing of manufactured products
concept phase
-in project management, the first phase in which a project is defined and the scope is planned
destructive testing
-inspection that renders the inspected part inoperable
consideration
-ln contract law, an obligation that is to the detriment of one party (promisee) or to the benefit of the other party (promisor)
annual percentage rate
-ln finance, the rate of interest paid for a loan after compounding is considered - Syn: effective interest rate, annual physical inventorySyn: physical inventory
best in class
-ln the benchmarking process, the designation given to an organization (which may be from another industry) recognized for excellence in a specific process area - See: process benchmarking
early start date (es)
-ln the critical path method of project management, the earliest time at which given activity is estimated to begin - This date can change as the project is executed
late finish date (lf)
-ln the critical path method of project management, the last date upon which a given activity can be completed without delaying the completion date of the project
forward pass
-ln the critical path method of project management, working from the first node to the last node calculating early start times and early finish times as well as the project's duration - See: forward scheduling, backward pass, critical path method
cash cow
-A highly profitable product in a lowgrowth market - See: growthshare matrix
embargo
-A ban established by a nation's government that prohibits individuals or organizations from conducting any trade with individuals or organizations from another particular nation
direct labor
-Labor that is specifically applied to the good being manufactured or used in the performance of the service - Syn: touch labor
compensation laws
-Laws designed to pay employees for injuries sustained on the job
centralized authority
-Limiting the ability to make decisions to a few managers
bill of lading (house) (b/l)
-A bill of lading issued by a nonvesseloperating common carrier (NVOCC), consolidator, or freight forwarder - It indicates the carrier's name and lists the master bill of lading
activity driver
-1 n activity based cost accounting, a yardstick of demands placed on an activity by given cost objects - Its purpose is to assign activity costs to cost objects
estimate of error
-1 n statistics, a measure of dispersion - See: standard deviation, standard error, variance
data dictionary
-1) A catalog of requirements and specifications for an information system - 2) A file that stores facts about the files and databases for all systems that are currently being used or for the software involved
collaborative planning, forecasting, and replenishment (cpfr)
-1) A collaboration process whereby supply chain trading partners can jointly plan key supply chain activities from production and delivery of raw materials to production and delivery of final products to end customers - Collaboration encompasses business planning, sales forecasting, and all operations required to replenish raw materials and finished goods - 2) A process philosophy for facilitating collaborative communications - CPFR is considered a standard, and is endorsed by the Voluntary Interindustry Commerce Standards - Syn: collaborative planning
bill of lading (master) (b/l)
-A bill of lading issued by carriers that are vessel owners, also known as steamship companies - See: bill of lading (uniform)
controllable cost
-A cost that is under the direct control of a given level of management
data integrity
-Assurance that data accurately reflects the environment it is representing
decryption
-Transformation of encrypted text into a readable format
channel integration
-strengthening relationships up and down the supply chain from suppliers' suppliers to customers' customers
lue is added to existing stock
Average Stock=Total Stock/Total Quantity - See: first in, first out last in, first out
productive capacity
-1 n the theory of constraints, the maximum of the output capabilities of a resource (or series of resources) or the market demand for that output for a given time period - See: excess capacity, idle capacity, protective capacity
supplier (vendor) scheduling
-1) Purchasing approach that provides supplier with schedules to deliver replenishment when needed - Is typically a contract that has daily or weekly delivery schedule with contact information - Dates must be valid - 2) Used to describe reserving capacity with supplier through contracts in times of high demand -
phantom bill of material
-A bill of material coding and structuring technique used primarily for transient (nonstocked) subassemblies - For the transient item, lead time is set to zero and the order quantity to lot - A phantom bill of material represents an item that is physically built but rarely stocked before being used in the next step or level of manufacturing - This permits MRP logic to drive requirements straight through the phantom item to its components, although the MRP system usually retains its ability to net against any occasional inventories of the item - This technique also facilitates the use of common bills of material for engineering and manufacturing - The components for parent items are expressed as a precentage - This type of BoM is typically used in ATO and combine with forecasts to determine the quantities of subassemblies to produce - Syn: blowthrough, transient bill of material - See: pseudo bill of material
single level bill of material
-A display of components that are directly used in a parent item - It shows only the relationships one level down
bill of resources (load profile)
-A display of future capacity requirements based on released and/or planned orders over a given span of time - Is stated the the standard hours required to produce one item - It is required for each MPS item or family of items the require the same resources - Is used to calculate RCCP requirements
operations (process) finite loading
-A finite loading technique that aims to minimize possible delays to individual operations and the potential delay of each scheduled order - Eligible operations from an order or a group of orders are loaded period by period onto a work center or a group of work centers, according to operation level priority rules - Is used to achieve maximum throughput and provide working program for the future - Method requires establishing order and operation priority sequencing rules - See: constraint oriented finite loading, drum buffer rope, operation sequencing
change order
-A formal notification that a purchase order or shop order must be modified in some way - This change can result from modifications such as a revised quantity, date, or customer specification an engineering change or a change in inventory requirement date
linear layout
-A layout of various machines in one straight line - This type of layout makes it difficult to reallocate operations amongworkers and machinery
period order quantity
-A lot sizing technique under which the lot size is equal to the net requirements for a given number of periods (e -g -, weeks into the future) - The number of periods to order is variable, each order size equalizing the holding costs and the ordering costs for the interval - Is often used with ABC classification and EOQ - See: discrete order quantity, dynamic lot sizing
two level master schedule
-A master scheduling approach in which a planning bill of material is used to master schedule an end product or family, along with selected key features (options and accessories) in FAS - Individual products that make up the family are shown on family BoM with a quantity per item equal to their percentage of total family - Allows scheduler to manage family as one item and the individual products one level down can be managed effectively - See: hedge, multilevel master schedule, production forecast
rate based scheduling
-A method for scheduling and producing based on a periodic rate (e -g -, daily, weekly, monthly) - This method has traditionally been applied to highvolume and process industries - The concept has also been applied within job shops using cellular layouts and mixedmodel level schedules where the production rate is matched to the selling rate
decomposition
-A method of forecasting where time series data is separated into up to three componentstrend, seasonal, and cyclical - Trend includes the general horizontal upward or downward movement overtime seasonal includes a recurring demand pattern such as day ofthe week, weekly, monthly, or quarterly - Cyclical is any repeating nonseasonal pattern - Seasonal is a recurring seasonal demand pattern based on time - A fourth component is random, data with no pattern - The new forecast is made by projecting the patterns individually determined and then combining them - See: cyclical component, random component, seasonal component, trend component
backflushing
-A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component's upperlevel parent item based on what should have been used as specified on the bill of material and allocation records - This approach has the disadvantage of a builtin differential between the book record and what is physically in stock - Syn: explodetodeduct, postdeduct inventory transaction processing - See: prededuct inventory transaction processing
cumulative charting
-A method of plotting cumulative production and shipments to visualize stock at any stage
closed loop feedback system
-A planning and control system that monitors system progress toward the plan and has an internal control and replanning capability - Is used to compare actual performance to planned performance
supplier scheduling
-A purchasing approach that provides supplierswith schedules ratherthan with individual hardcopy purchase orders - Normally, a supplier scheduling system will include a business agreement (contract) for each supplier, a weekly (or more frequent) schedule for each supplier extending for some time into the future, and individuals called supplier schedulers - Also required is a formal priority planning system thatworkswell, because it is essential in this arrangement to provide the supplierwith valid due dates - Syn: vendor scheduling
p:d ratio
-A ratio where P is the manufacturing lead time and D is the customer required delivery time - If the P:D ratio exceeds 1 -00, either a customer's order will be delayed, or production will start as the result of a forecast (make to stock) or an anticipated customer order (make to order)
return on investment (roi)
-A relative measure of financial performance that provides a means for comparing various investments by calculating the profits returned during a specified time period - In the theory of constraints, ROI is calculated as throughput minus operating expense divided by investment
s&op report
-A report formatted like input and output control that is used at the master planning of resources level - Report shows the impact sales and production plans on inventory at S&OP level
capacity constrained resource (ccr)
-A resource that is not a constraint but will become a constraint unless scheduled carefully - Any resource that, if its capacity is not carefully managed, is likely to compromise the throughput of the organization
broadcast system
-A sequence of specific units to be assembled and completed at a given rate - This sequence is communicated to supply and assembly activities to perform operations and position material so that it merges with the correct assembled unit
order oriented finite loading
-A set of finite loading techniques to schedule orders according to order level priority rules - The techniques aim to either (1) maximize capacity utilization or (2) deliver a high proportion of ontime orders with low work in process
flow control scheduling
-A specific production control system that is based primarily on setting production rates and feeding work into production to meet these planned rates, then monitoring and controlling production - Used in flow shop production and sets production rate and releases material and word into production to meet planned rates - Production facility is designed to support overlapping to handle WIP and throughput - Products have fixed routes, and machines are dedicated with balanced operations - Uses process costing
bill of labor
-A structured listing of all labor requirements for the fabrication, assembly, and testing of a parent item - Can be used at the manufacturing family level and the resource planning level - See: bill of resources, capacity bill procedure, routing
lead time offset
-A technique used in MRP where a planned order receipt in one time period requires the release of that order in an earlier time period based on the lead time for the item - Syn: component leadtime offset, offsetting
super bill of material
-A type of planning bill, located at the top level in the structure, that ties together various modular bills (and possibly a common parts bill) to define an entire product or product family - The quantity per relationship of the super bill to its modules represents the forecasted percentage of demand of each module - Products within the product family have their percentage of demand for the entire family - Also used for products with different configurations or options - The masterscheduled quantities of the super bill explode to create requirements for the modules that also are master scheduled - See: pseudo bill of material
linear production
-Actual production to a level schedule, so that a plotting of actual output versus planned output forms a straight line even when plotted for a short segment of time
infinite loading
-Calculation of the capacity required at work centers in the time periods required regardless of the capacity available to perform this work
excess capacity
-Capacity that is not used to either produce or protect the creation of throughput
pyramid forecasting
-Forecasting method that allows management to review and adjust forecasts at the aggergate level while keeping lower level forecasts balanced - Combines the stability of aggergate forecasts and the application of management judgement with the need to forecast many end items within the constraints of aggergate forecast - AKA Rollup
time based safety stock
-Is a method for setting safety stock to cover a fixed time period - Is addition to cycle stock and is typically an average of sales - This differs from statisticalbased safety stocks in that the amount is not based on deviation from demand - May cause large amounts of capital to be tied up if stock is slow moving - Should not be used for season demand items -
hybrid manufacturing
-Is a production planning method that combines chase and level production planning -
capability index
-Is a quality control tool used to calculate the tolerance of a process by using the upper and lower specification limits - Formula is: (USL-LSL)/6 Sigma
revised promised date
-Is a revised date when an order's will not be met by the original completion date
synchronous manufacturing
-Is the concept of linking together several levels of manufacturing with each level only making what is needed - WIP stores do not exists in this type of production
order entry date
-Is the date an order is received, and price and delivery terms are agreed upon, Quoted lead time is applied, and is the typicall the starting point for internal metrics
planned order release date
-Is the date an order will be released to operations to strat production and the date material must be available - Formula used to set Date: Order Release Date-Manufacturing Leadtime
planning (psuedo) bill of material
-Is the grouping of items in BoM format for scheduling and planning - Requires having average historical demand for items as percentage of total demand for all items for an end product or product family - See Super BoM
configuration module
-Is the module used in ATO as a guide to manufacturing process that lists all available options and configurations
forecast rollup
-Is the process of generating detailed forecasts that aggeragte to the total forecast
disaggregation of demand
-Is the subdividing of product family forecasts, for example seperating stable and unstable products within a family - The demand for subdivided products should be equal to the total demand for the product family -
multilevel master schedule
-Is used for finished goods that have demand for components or subassemblies, spares - Also used when a component manufacturing plant is supporting an assembly area and demand from external sources - MPS shows two types of demand: MRP=Dependant demand and (External) Customer Orders=Independant demand Resale item demand is defined in purchase plan -
release note
-Is used to prove a product has passed any and all required testing
aps simulations
-Technique that uses data in a model and introduces various conditions that are more likely to occur in established probable results - Main areas of APS Simulations: MRP as a Simulator, What if Facility
frontend loaded
-Term used when master schedule is over loaded in the frozen period - Typically, orders that are overloaded, were supposed to be completed in one period but are carried over to the next period - The current period has normal planned work plus overdue work from previous periods - Cause for overloads is usually due to material shortages or a technical problem with production -
customer required date
-The date a customer requests delivery - Is the date when the actual demand occurs even if shipping, delivery, or promise dates are different - Is used to create forecasts for DCs
process flexibility
-The design ofthe manufacturing system, including operators and machinery, that allows quick changeovers to respond to nearterm changes in product volume and mix - A necessary tool in lean and just in time - Types of flexibility are: Total Volume Flexibility, Product Mix Flexibility, Labor Flexibility, New Product Flexibility
bill of distribution
-The planned channels of inventory disbursement from one or more source to DCs to final customers - There may be more than one level in the system - AKA Distribution Network Structure
net present value
-The present (discounted) value of future earnings (for which operating expenses have been deducted from net operating revenues) for a given number of time periods - Deducts operating expenses from net operating revenue - NPV is compared to capital outlay and if NPV is greater the project is viable
resource profile
-The standard hours of load placed on a resource by time period - Production leadtime data is taken into account to provide timephased projections of the capacity requirements for individual production facilities - See: bill of resources, capacity planning using overall factors, product load profile, roughcut capacity planning, resource requirements planning
econometric models
-The use of economic factors as trends to be used as a set of regression equations for simulations - A set of equations intended to be used simultaneously to capture the way in which dependent and independent variables are interrelated -
safety capacity
-ln the theory of constraints, the planned amount by which available capacity exceeds current productive capacity - This capacity provides protection from planned activities (such as resource contention) and preventive maintenance and unplanned activities (such as resource breakdown, poor quality, rework, or lateness) - Safety capacity plus productive capacity plus excess capacity equals 100 percent of capacity - Syn: capacity cushion - See: protective capacity
