APIC's Exam

Consignment

an arrangement in which goods are left in the possession of an authorized third party to sell.

An andon

an electronic board that provides visibility of floor status and supplies information to help coordinate the efforts of linked work centers.

Infinite Loading

assumes that capacity is infinite at any work station

Jidoka

automatically stopping the process when something is wrong and then fixing the problems on the line itself as they occur

Extrinsic forecasting

correlates with indicators external to an organization that may influence demand.

break-even point

the product the point at which total revenue equals total costs or expenses.

Routing

the sequence of operations through which the product must pass

Pareto Chart

the significant few from the trivial many by easily visualizing the most common occurrences.

Exponential Smoothing

new forecast = last period's forecast + alpha (last period's actual demand - last period's forecast)

Customer Relationship Management(CRM)

putting the customer first, collaborate, want loyal customers

Hansei

refers to the concept of self-criticism and finding areas for improvement.

Average Inventory Formula

(Beginning Inventory + Ending Inventory) / 2

Critical Ratio Formula

(Due Date-Present Date)/Lead Time Remaining

Plant Location(light to heavy)

(EX: soda) locate factory near customers

Plant Location(heavy to light)

(EX: steel) by raw materials

Genchi Genbutsu

A Japanese phrase meaning visit the shop floor to observe what is occurring.

Chase Production

A S&OP plan with low inventory, hire and fire a lot(retail holiday)

x-bar chart

A control chart used to monitor changes in the mean value of a process. A bell curve on it's side

Detention

A penalty charge against road shippers when truck is delayed beyond a specified loading or unloading time

Voice of the Customer

A planning technique used to provide products, services, and results that truly reflect customer requirements by translating those customer requirements into the appropriate technical requirements for each phase of project product development.

Finite Loading

A scheduling approach that recognizes capacity constraints.

Bonded Warehouse

A warehouse authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed.

Mean Absolute Deviation(formula)

Absolute sum of deviations/number of periods

Backward Scheduling

Activities are scheduled back from the due date

Mean Absolute Deviation(MAD)

Actual demand - fcst/Number of periods

Decoupling Inventory

An amount of inventory kept 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.

Inventory Turnover

Annual COGS/Average Inventory in Dollars

Rated Capacity

Available Time x Utilization x Efficiency

Enterprise Resource Planning (ERP)

Business management software, usually a suite of integrated applications, that a company can use to collect, store, manage and interpret data from many business activities.

Capable to Promise vs Available to Promise

Capable to Promise (CTP) takes into account capacity information. Whereas ATP only considers material availability and assumes infinite capacity resources, CTP considers availability of both materials and capacity, giving a more realistic picture of whether demand can be satisfied within a given time fence.

Carrying Cost

Carrying Cost Rate x Average Inventory level in dollars

Statistical Process Control(SPC)

Checking a product in process before scrap and rework, catching errors early vs inspection afterwards

Bias

Consistent deviation from the mean in one direction

DMAIC

Define, Measure, Analyze, Improve, Control

Postponement

Delay final differentiation(at DC)

Hedge Inventory

Doing it as an investment against price increases

VATI(V)

EX: Steel products

VATI(A)

Ex: Jet Engine

VATI(I)

Ex: Packaged Food

VATI(T)

Ex: Personal Computers

Average Ordering Cost Per Order

Fixed Cost/Number of orders + variable cost

Make to Stock(MTS)

High Cost, distribution network can shorten lead times, made before customer orders.

Total Cost

Item, capacity related, stock out, ordering carrying

Assets Formula

Liabilities + Owners Equity

Cellular Layout

Machines are grouped into what is referred to as a cell. Grouping is determined by the operations needed to perform work for a set of similar items or part families that requires similar processing.(U shaped)

Buffer in Drum-buffer-rope

Materials arrive at a specific time before they are needed

Fixed Position Layout

Move workers rather than parts, avoid high costs to move EX: Home

Normal Distribution and Standard Distribution

One SD 68.3% Two SD 95.4% Three SD 99.7%

Functional Layout

Organized by the type of work. Equipment can handle a wide variety of products

Takt Time

Pace of Production

Capital Expenditures

Plant, property, equipment

Total Productive Maintenance

Prevent maintenance rather than react, workers maintain their own equipment

Hoshin Planning

Proactive 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.

Intermittent Layout

Produced in lots rather than continuous basis, very flexible, high WIP

4Ps

Product, Price, Promotion, Place

Assemble to Order(ATO)

Products that are customized only at the very end of the manufacturing process.

Demonstrated Capacity

Proven capacity calculated from actual performance data

Regular Purchases

Raw materials, maintenance, services

Manufacturing Lead Time

Represents the total time required to manufacture an item, exclusive of lower-level purchasing lead time

What is in Priority Planning

S&OP(Product Fam), Master Scheduling(End Items), MRP(components)

Seasonal Index

Seasonal Index = Period Average demand / average demand for all periods

S.M.A.R.T

Specific Measurable Achievable Relevant Timely

Single Minute Exchange of Die(SMED)

Speeding up set up of production(reducing changeovers)

Level Production

Stable labor/demand, higher inventory holding costs

Measures of Performance

Strategic KPI's, Tactical KPI's, Operational KPI's

Moving Average Forecast

Sum of Demand for most recent set of periods/ number of periods

Demurrage

The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time.

Priority Planning

The function of determining what material is needed and when. Master production scheduling and material requirements planning are the elements used for the planning and replanning process to maintain proper due dates on required materials.

Muda

To eliminate waste

The Largest Distribution Cost

Transportation

Job Shop

Typically small manufacturing systems that handle job production, that is, custom or semi-custom manufacturing processes such as small to medium-size customer orders or batch jobs.(farm equipment)

Engineer to Order(ETO)

Unique, high customer involvement, and extensive lead time

Total Cost Concept

View the sum of logistics operations as a system and seek to minimize the total cost of the system rather than the individual functions

Load

What we need to do

frieght forwarder

a business that handles overseas shipments and combines customers into one order

Total Quality Management (TQM)

a management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement

Delphi Method

a process used to arrive at a group opinion or decision by surveying a panel of experts

Product Based Layout

a type of layout where resources are arranged sequentially, according to the steps required to make a product

Forward Scheduling

actives are scheduled from a known start date through a finish date

Make to Order(MTO)

begins after confirmed order is received, less customer involvement

Theory of Constraints

concentration on exploiting and elevating constraints that slow production or service

Kaizen

continuous improvement

6 Sigma

data driven approach for quality improvement hoping to get little variation 6 sigma=6 standard deviations from the mean (very few)99.999

Dependent Demand

demand for items that are subassemblies or component parts to be used in the production of finished goods.(calculated)

Control charts

detect assignable causes of variation in a process as opposed to random variations.

Qualitative Forecasting

experience, intuition, educated guesses, mainly for new products

Utilization

hours actually worked/available time

Pegging

in material requirements planning systems, tracing upward in the bill of material from the component to the parent item

repetitive manufacturing

is dedicated to a single product or a small range of products, where products are passed through the same sequence of operations.

Subcontracting Production

lower profit margin and can lose control

Poka-Yoke

mistake-proofing methods aimed at designing fail-safe systems that minimize human error

Drum in Drum-buffer-rope

sets pace for entire system, but based on constraint rate

Rope in drum-buffer-rope

signal is constraint throughput rate

Independent Demand

sources outside of control need to be fcsted

Flow Process Type

standardized products with devoted line, low WIP, hard to change

Heijunka

the leveling of production load by both volume and product mix

Quantitative Forecasting

uses mathematical models and historical data to make forecasts