Exam 1 - Key Terms 2

Question 1

Consignment

Answer 1

A shipment handled by a common carrier, or the process of a supplier placing goods at a customer location without receiving payment until after the good are used or sold

Question 2

Constraint

Answer 2

A quantity that has a fixed value

Question 3

Continuous process improvement (CPI)

Answer 3

A never-ending effort to expose and eliminate root causes of problems; small-step as opposed to big-step improvement

Question 4

Continuous production

Answer 4

A production system in which the productive equipment is organized and sequenced according to the steps involved to produce the product

Question 5

Continuous replenishment

Answer 5

A process by which a supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these sales without stockouts and without receiving replenishment orders. This results in lower associated costs and improved turnover

Question 6

Control chart

Answer 6

A graphic comparison of process performance data with predetermined computed control limits

Question 7

Control limit

Answer 7

A statistically determined line on a control chart

Question 8

Cost of poor quality

Answer 8

The costs associated with performing a task incorrectly and/or generating unacceptable output

Question 9

Critical path method (CPM)

Answer 9

A network planning technique for the analysis of a project’s completion time used for planning and controlling the activities in a project

Question 10

Cross-docking

Answer 10

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

Question 11

Customer relationship management (CRM)

Answer 11

A marketing philosophy based on putting the customer first. Includes account management, catalog and order entry, payment processing, credits and adjustments, and other functions

Question 12

Cycle stock

Answer 12

One of the two main conceptual components of any item inventory, the cycle stock is the most active component

Question 13

Cycle time - industrial engineering

Answer 13

The time between the completion of two discrete units of production. E.g. cycle time of 120 per hour is 30 seconds

Question 14

Data governance

Answer 14

The overall management of data’s accessibility, usability, reliability, and security. Used to ensure data record accuracy

Question 15

Decentralized inventory control

Answer 15

Inventory decision making exercised at each stocking location for SKUs at that location

Question 16

Decoupling inventory

Answer 16

An amount of inventory maintained between entities in a manufacturing or distribution network to create independence between processes or entities

Question 17

Delivery lead time

Answer 17

The time from the receipt of a customer order to the delivery of the product

Question 18

Demand lead time

Answer 18

The amount of time potential customers are willing to wait for the delivery of a good or a service. Also known as customer tolerance time

Question 19

Demonstrated capacity

Answer 19

Proven capacity calculated from actual performance data, usually expressed as the average number of items produced multiplied by the standard hours per item

Question 20

Direct labor

Answer 20

Labor that is specifically applied to the good being manufactured or used in the performance of the service

Question 21

Direct material

Answer 21

Material that becomes a part of the final product in measurable quantities

Question 22

Discrete manufacturing

Answer 22

The production of distinct items such as automobiles, appliances, or computers

Question 23

Discrete order picking

Answer 23

A method of picking orders in which the items on one order are picked before the next order is picked

Question 24

Distribution center

Answer 24

A location used to store inventory

Question 25

Distribution warehouse

Answer 25

A facility where goods are received in large-volume uniform lots, stored briefly, and then broken down into smaller orders of different items required by the customer. Emphasis on expeditious movement and handling

Question 26

Drum schedule

Answer 26

The detailed production schedule for a resource that sets the pace for the entire system

Question 27

Drum-buffer-rope (DBR)

Answer 27

The theory of constraints method for scheduling and managing operations that have an internal constraint or capacity-constrained resource

Question 28

Economic order quantity (EOQ)

Answer 28

A type of fixed order quantity model that determines the amount of an item to be purchased or manufactured at one time. Formula: √2AS/iC

Question 29

Electronic data interchange (EDI)

Answer 29

The paperless exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices, and invoices, using standardized document formats

Question 30

Cycle time - materials management

Answer 30

The length of time from when material enters a production facility until it exits