APICS Deck 7 OO Flashcards Preview

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Flashcards in APICS Deck 7 OO Deck (499):

monopolistic competition

A market in which many competitors offer partially differentiated products or services within a given geographical area. Most competitors focus on market segments where they can meet customers’ needs somewhat better than their competitors. See: industry structure types.M


related, they might not be

those who know most about the variables must make that evaluation). The scatter chart is one of the seven tools of quality. Syn: cross plot, scatter diagram, scatterplot.S



The ability to communicate effectively with supply chain partners to facilitate interorganization synchronization. C


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. Example: 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 an assembly is not the same as the sum of the last digit of the components’ sum, the assembly must be missing a part or must have the wrong combination of parts.H


percent completed

A comparison of work completed to the current projection of total work.P


franchise extension

The placement of a brand name on products outside the company’s present sphere of activity.F


organizational environment

Consists of an external environment (e.g., laws and regulations, technology, economy, competition) and an internal environment (e.g., the domain of products and services to be provided, the processes to be executed, the organizational structure). See: external environment, internal environment.O


seasonal stock

Syn: seasonal inventory.S


wandering bottleneck

An undesirable effect in which the bottleneck moves relatively frequently from one resource to another.W


facilitating products

Products that support the operations of a firm but are not sold externally, such as furniture and computers.F


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.R


file structure

The manner in which records are stored within a file (e.g., sequential, random, indexsequential). F


control levels

systems capable of providing longterm planning and short-term control capabilities for strategic and operational considerations by management. Production planning and control strategies help firms develop systems that enable them to exploit market opportunities while satisfying manufacturing process requirements.P


profit center

An assigned responsibility center that has authority to affect both the revenues earned and the costs incurred by and allocated to the center. Operational effectiveness is evaluated in terms of the amount of profit generated.P P


beginning available balance

Syn: available inventory.B


catalog channel

A facility that receives orders based on a published book of offerings and ships from its warehouse to the customer.C


receiving report

A document used by the receiving function of a company to inform others of the receipt of goods purchased.R


supplier clustering

Deliberately sole sourcing remote suppliers within a small geographical area to facilitate joint shipments of what would otherwise be less-thantruckload quantities.S



An internationally marketed bond.E



1) A production control person whose primary function is dispatching. 2) A transportation worker who sends out and tracks cars, buses, trucks, railcars, and other vehicles.D


activity-based costing (ABC)

In activity-based cost accounting, a model, by time period, of resource costs created because of activities related to products or services or other items causing the activity to be carried out. Syn: activity-based cost accounting, activity-based costing model.A


demand time fence (DTF)

1) That point in time inside of which the forecast is no longer included in total demand and projected available inventory calculations; inside this point, only customer orders are considered. Beyond this point, total demand is a combination of acdemand D tual orders and forecasts, depending on the forecast consumption technique chosen. 2) In some contexts, the demand time fence may correspond to that point in the future inside which changes to the master schedule must be approved by an authority higher than the master scheduler. Note, however, that customer orders may still be promised inside the demand time fence without higher authority approval if there are quantities available-to-promise (ATP). Beyond the demand time fence, the master scheduler may change the MPS within the limits of established rescheduling rules, without the approval of higher authority. See: option overplanning, planning time fence, time fence.D


declared value

The value of goods declared on a bill of lading, used to determine a freight rate or limit the carrier’s liability.D


simple regression

Regression analysis involving only one independent variable.S


lot cost

In cost accounting, those costs associated with processing a common lot or quantity of parts having the same specifications.L



Abbreviation for the basic seven tools of quality.B



The retention of parts or products for future use or shipment.S



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.J



Large computer system, typically with a separate central processing unit. This high-level computer is designed for the most intensive computational tasks.M


level of effort

In project management, support activity (e.g., customer liaison) that is not easily measured by discrete accomplishment. It usually has a uniform work rate.L


pull-through distributions

Supply chain activities that are started by the consumer. Instead of the manufacturer “pushing” products to stores, in a pull-through distribution consumers purchase items, which signals the manufacturer to produce more of that product. This is effectively the consumer “pulling” products to the store.P


voice of the customer (VOC)

Actual customer descriptions in words for the functions and features customers desire for goods and services. In the strict definition, as relates to quality function deployment (QFD), the term customer indicates the external customer of the supplying entity.V



The use of a nonprimary product or component, normally when the primary item is not available.S



Abbreviation for automated information system.A


innovation risk

The risk of losing customers because another firm creates more innovative products.I


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.L



A buyer who also does material planning. This term should not be confused with planner/ buyer, which is a synonym for supplier scheduler.B


producer’s risk (α)

For a given sampling plan, the probability of not accepting a lot, the quality of which P has a designated numerical value representing a level that is generally desired to accept. Usually the designated value will be the acceptable quality level (AQL). See: type I error.P


safety stock

1) In general, a quantity of stock planned to be in inventory to protect against fluctuations in demand or supply. 2) In the context of master production scheduling, the additional inventory and capacity planned as protection against forecast errors and shortterm changes in the backlog. Overplanning can be used to create safety stock. Syn: buffer stock, reserve stock. See: hedge, inventory buffer.S


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 manufacture with high quality. See: participative design/engineering.E


supply rate

Production rate, or quantity of units per unit of time, sent to inventory.S



Joint work among people to achieve common business objectives.C



Using the firm’s internal resources to provide goods and services. See: make-or-buy decision.I


resource profile

The standard hours of load placed on a resource by time period. Production lead-time data are taken into account to provide time-phased projections of the capacity requirements for individual production facilities. See: bill of resources, capacity planning using overall factors, product load profile, rough-cut capacity planning.R


average collection period

Syn: receivables conversion period.A


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, and terminating the labor-management relationship.C


precedence relationship

In the critical path method of project management, a logical relationship that one node has to the succeeding node. The terms precedence relationship, logical relationship, and dependency are used somewhat interchangeably.P



A request to a transportation line to trace a shipment to expedite its movement or to verify delivery.T



The percentage of time that a worker or machine is capable of working. The formula is availability



Replacing activities previously performed by humans with mechanical devices or robots that can be either operated by humans or run by computer. Difficultto- do, dangerous, or monotonous tasks are likely candidates for robots to perform.R


promissory note

An agreement to pay a stipulated amount during an agreed time period.P


surge capacity

The ability to meet sudden, unexpected increases in demand by expanding production with existing personnel and equipment.S



A marketing promotion in which prizes are awarded, usually by chance.S



Abbreviation for integrated services digital network.I


information flow profile

A graph of the performance of information flow compared to some set of performance criteria.I


market share, low growth rate; (2) Stars

high market


block system

A system for selecting items to be cycle counted by a group or block of numbers.B



Abbreviation for decision support system.D


servo system

A control mechanism linking a system’s input and output, designed to feed back data on system output to regulate the operation of the system.S S


current ratio

Current assets divided by current liabilities.C


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.C


consignment inventory

Syn: consigned stocks. See: consignment.C C



A portion of a complete trip.L


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.H H



1) In activity-based 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.D



Abbreviation for Fair Labor Standards Act.F


exempt carrier

A for-hire carrier that is free from economic regulation.E


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.D


strategic drivers

Factors that influence business unit and manufacturing strategies.S



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.B


executive dashboard

A set of cross-functional metrics for measuring company performance that indicates the health of the company. It usually includes the company’s key performance indicators. See: dashboard.E


web directory

A list of web pages that is structured hierarchically. W


job grade

A form of job evaluation that assigns jobs to predetermined job classifications according to the job’s relative worth to the organization. Pay scales are usually set for each job grade.J



Syn: order qualifiers. See: order losers, order winners.Q


capital expenditure

Money invested in a long-term asset, one that is expected to last longer than one year. The investment is expected to generate a stream of future benefits.C


mix control

The control of the individual items going through the plant.M


service reliability

A dimension of service quality referring to the capability of a service provider to perform dependably and accurately.S



Syn: inventory turnover.T


work center

A specific production area, consisting of one or more people and/or machines with similar capabilities, that can be considered as one unit for purposes of capacity requirements planning and detailed scheduling. Syn: load center.W


shrinkage factor

A percentage factor used to compensate for the expected loss during the manufacturing cycle of an item. This factor differs from the scrap factor in that it affects all components of the item, where the scrap factor relates to only one component’s usage. Syn: shrinkage rate.S


open master production schedule

The part of the master production schedule that still has available capacity for assigning new orders.O


statement of work

1) A description of products to be supplied under a contract. 2) In projection management, the first project planning document that should S be prepared. It describes the purpose, history, deliverables, and measurable success indicators for a project. It captures the support required from the customer and identifies contingency plans for events that could throw the project off course. Because the project must be sold to management, staff, and review groups, the statement of work should be a persuasive document.S


prioritization matrix

A special type of matrix chart used to show the priorities of items by applying criteria and weighting factors to each item.P


incremental available-to-promise

Syn: discrete available-to-promise.I


quasi manufacturing

A type of service operation that closely resembles a manufacturing process; focus is on production process, technology, costs, and quality.Q


machining center

A machine capable of performing a variety of metal, wood, or plastic removal operations on a part, usually operated by numerical control.M


trend analysis

An analysis to determine whether trend (general upward or downward change) exists in data. See: trend forecasting models.T


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.R



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 C



The technology that enables online acceptance of credit cards, approving customers for payment before delivery is made.C


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.B


contingent project

A project that can be accepted only if one or more other projects are accepted first. See: independent project, mutually exclusive project.C


global measurements

Measurements used to judge the performance of the system as a whole.G


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.I


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., after-sale service).C


theoretical capacity

The maximum output capability, allowing no adjustments for preventive maintenance, unplanned downtime, shutdown, and so forth.T



A group of companies that work together to jointly produce a product, service, or project.C


production and inventory management

General term referring to the body of knowledge and activities concerned with planning and controlling rates of purchasing, production, distribution, and related capacity resources to achieve target levels of customer service, backlogs, operating costs, inventory investment, manufacturing efficiency, and ultimately, profit and return on investment.P production and operations management (POM) Managing an organization’s production of goods or services; managing the process of taking inputs and creating outputs.P


mix number

Syn: lot number.M


incentive rate

In transportation, a discounted rate designed to convince a shipper to ship a higher volume in a particular load.I


nonproduction material

Items (indirect materials and supplies) in the manufacturing process or in the maintenance or operation of a facility that do not generally become part of the final product.N


delivery appointment

The time for goods to arrive at a selected location.D


computer numerical control (CNC)

A technique in which a machine tool controller uses a computer or microprocessor to store and execute numerical instructions.C


time stamping

Tracking with each transaction the time of occurrence. It is used in period closings and to tie end items to samples for certification of item properties.T


carbon footprint

A measure of carbon emissions from a person, organization, building, or operation.C


delay report

Syn: anticipated delay report.D


measure of service

Syn: level of service.M


internal controls

The policies and procedures, the documentation, and the plan for an organization that authorize transactions, safeguard assets, and maintain the accuracy of financial records.I


stockout costs

The costs associated with a stockout. Those costs may include lost sales, backorder costs, expediting, and additional manufacturing and purchasing costs.S


schedule harmony

In supply chains, the arrival of goods at a transfer point with a small buffer time in front of their departure via a different transportation mode.S


material class

A means to describe a grouping of materials with similar characteristics for planning and scheduling purposes.M


demand filter

A standard that is set to monitor sales data for individual items in forecasting models. It is usually set to be tripped when the demand for a period differs from the forecast by more than some number of mean absolute deviations.D


request for information (RFI)

An inquiry to a potential supplier about that supplier’s product or service for potential use in the business. The inquiry can provide certain business requirements or be of a more general exploratory nature. See: request for proposal (RFP).R


product flexibility

The ease with which current designs can be modified in response to changing market demands.P



Abbreviation for single-digit setup.S


pallet jack

A type of materials handling equipment that combines pallets horizontally but has no lifting capability.P


ISO 31000

A standard adopted by the International Standards Organization 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.I



The connection that allows data and other information to flow between two networks.G



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.E



A quantity of production being processed.R



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.I


standard deviation

A measurement of dispersion of data or of a variable. The standard deviation is computed by finding the differences between the average and actual observations, squaring each difference, adding the squared differences, dividing by n – 1 (for a sample), and taking the square root of the result. See: estimate of error.S



Acronym for budget at completion.B



Material outside of specifications and possessing characteristics that make rework impractical.S


order shipment

Activity that extends from the time the order is placed upon the vehicle for movement until the order is received, verified, and unloaded at the buyer’s destination.O


service capacity

The number of daily customers a firm is designed to serve; actual throughput may be larger or smaller.S


supplier relationship management (SRM)

A comprehensive approach to managing an enterprise’s interactions with the organizations that supply the goods and services the enterprise uses. The goal of SRM is to streamline and make more effective the processes between an enterprise and its suppliers. SRM is often associated with automating procure-to-pay business processes, evaluating supplier performance, and exchanging information with suppliers. An e-procurement system often comes under the umbrella of a supplier relationship management family of applications.S


common carrier duties

The requirements of common carriers to offer reasonable services and rates and to avoid discrimination.C


contact efficiency

A measure of how well an organization transforms website hits into visits.C



Abbreviation for design for manufacture and assembly.D



Abbreviation for time-based competition.T



Acronym for value-added network.V


estimate to complete (ETC)

Expected cost to complete all remaining work for an activity or project.E


corporate purchasing cards

Syn: procurement credit card.C


goodness of fit

The degree to which a model complies with observed data.G


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 no necessary relationship with the actual physical L movement of specific items. See: average cost systems.L



Abbreviation for group decision support system.G


product-mix flexibility

The ability to change over quickly to other products produced in a facility, as required by demand shifts in mix.P


stock dividend

A dividend paid to shareholders in stock rather than cash.S


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.A


staged material

Syn: kit.S


fixed cost

An expenditure that does not vary with the production volume; for example, rent, property tax, and salaries of certain personnel.F


independent trading exchange

A business-to-business 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.I I


stock number

Syn: item number.S


locational determinants

Information or factors considered in determining where to put a facility.L


stores requisition

Syn: picking list.S


delivery speed

A performance criterion that measures how quickly a product or service can be delivered once the demand is identified.D



The process of identifying a company that provides a needed good or service.S


manufacturing volume strategy

An element of manufacturing strategy that includes a series of assumptions and predictions about long-term market, technology, and competitive behavior in the following areas: (1) the predicted growth and variability of demand, (2) the costs of building and operating different sized plants, (3) the rate and direction of technological improvement, (4) the likely behavior of competitors, and (5) the anticipated impact of international competitors, markets, and sources of supply. It is the sequence of specific volume decisions over time that determines an organization’s long-term manufacturing volume strategy.M


performance benchmarking

Syn: competitive benchmarking. See: benchmarking, process benchmarking.P


rated capacity

The expected output capability of a resource or system. Capacity is traditionally calculated from such data as planned hours, efficiency, and utilization. The rated capacity is equal to hours available × efficiency × utilization. Syn: calculated capacity, effective capacity, nominal capacity, standing capacity.R


sample average

A key measure that represents the central tendency of a sample.S



A contractual communication that proposes definite terms. A contract is created if the other party accepts those terms.O


public relations

The function that oversees a program to earn public understanding and acceptance.P


data collection

The act of compiling data for recording, analysis, or distribution.D


pace rating

Estimating the level of effort of a subject of methods study, where 100 percent would be the sustainable pace of an average skilled worker.P


mean time for failures (MTFF)

Average time for failure of a nonrepairable product (expected life) or average time to first failure of a repairable product. See: reliability.M


mystery shoppers

People who pose as customers but who are really studying an organization’s service quality to provide feedback to the organization for improvement purposes.M N


quality control

The process of measuring quality conformance by comparing the actual with a standard for the characteristic and acting on the difference. See: quality assurance/control.Q


organization chart

A graphical depiction of relationships between people who work together.O


least-squares method

A method of curve fitting that selects a line of best fit through a plot of data to minimize the sum of squares of the deviations of the given points from the line. See: regression analysis.L



The state of a unit or product. Two parameters are possible: go (conforms to specification) and no-go (does not conform to specification).G



Any seller of an item in the marketplace. See: supplier.V


operations planning

The planning of activities that transform inputs into finished goods and services.O


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.A


acid test ratio

Syn: quick asset ratio.A


stock order

An order to replenish stock, as opposed to a production order to make a particular product for a specific customer.S


bill of operations

Syn: routing.B


or too early, (2) waiting

queuing delays, (3) transportation


product-positioned warehouse

The warehouse located close to the manufacturing plants that acts as a consolidation point for products.P


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 rather than 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.F



The conversion of inputs into finished products.P


scheduling algorithm

Syn: scheduling rules.S


procurement lead time

The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials. Lead time begins when a decision has been made to accept an order to produce a new product and ends when production commences. Syn: procurement cycle, total procurement lead time. See: time-to-market.P



In project management, adding resources to critical path or near-critical path activities on a project to shorten project duration after analyzing the project to identify the most cost-effective course of action.C



Abbreviation for cost, insurance, freight.C


human resource utilization

Using labor to its fullest potential to maximize product or service output.H



In project management, an important event in a project, usually the realization of a significant deliverable.M


work order

1) An order to the machine shop for tool manufacture or equipment maintenance; not to be confused with a manufacturing order. Syn: manufacturing order, work ticket. 2) An authorization to start work on an activity (e.g., maintenance) or product.W


predecessor activity

1) In project management, in an activity-on-arrow network, the activity that enters a node. 2) In project management, in an activity-on-node network, the node at the tail of the arrow.P



One passenger transported one mile. For example, a bus carrying forty passengers for one hundred miles would accrue 4,000 passenger miles.P


configuration system

Syn: customer order servicing system.C



A program by which specific quality and packaging requirements are met before the product is released. Prequalified product is shipped directly into the customer’s inventory. Dock-to-stock eliminates the costly handling of components, specifically in receiving and inspection and enables product to move directly into production.D



A nonserviceable item obtained from a customer which is intended for use in remanufacturing.C


business strategy

A plan for choosing how to compete. Three generic business strategies are (1) least cost, (2) differentiation, and (3) focus.B


earmarked material

The reserved material on hand that is physically identified, rather than merely reserved in a balance-of-stores record.E


startup audit

The technique of having an implementation team tour or visit the implementation site on a frequent basis and use the "management by walking around" technique to identify problems and solutions.S


shop planning

The function of coordinating the availability of material handling, material, resources, setup, and tooling so that an operation or job can be done on a particular machine. Shop planning is often part of the dispatching function. The term shop planning is sometimes used interchangeably with dispatching, although dispatching does not necessarily include shop planning. For example, the selection of jobs might be handled by the centralized dispatching function, while the actual shop planning might be done by the foreman or a representative. S


industrial revolution

A movement to the use of factories and machines and away from activities done by hand without mechanical assistance.I


bill of capacity

Syn: bill of resources.B



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 value-added process rather than to uncontrolled pricing factors. See: speculative buying.H


effective capacity

Syn: rated capacity.E



Abbreviation for electronic invoice presentment and payment.E



Abbreviation for gross national product.G


lightless plant

Syn: dark factory.L


time series

A set of data that is distributed over time, such as demand data in monthly time periods. Various patterns of demand must be considered in time series analysis: seasonal, trend, cyclical, and random.T


trade secret

Knowledge of a manufacturing process that gives the owner an advantage over competitors who do not have it. Trade secrets are legally protectable.T


excess inventory

Any inventory in the system that exceeds the minimum amount necessary to achieve the desired throughput rate at the constraint or that exceeds the minimum amount necessary to achieve the desired due date performance. Total inventory = productive inventory + protective inventory + excess inventory.E


control chart

A graphic comparison of process performance data with predetermined computed control limits. The process performance data usually consist of groups of measurements selected in 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.C


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.D


seasonal harmonics

Syn: harmonic smoothing.S


event-based marketing

Promoting goods or services through specific events.E


service vs. investment chart

A curve showing the amount of inventory that will be required to give various levels of customer service.S


Promotion activities

other than advertising, publicity,


blend off

In process industries, the rework of material by introducing a small percentage into another run of the same product.B



A computational aid consisting of two or more scales drawn and arranged so that the results of calculations may be found by the linear connection of points on them. Historically, it was used for calculating economic lot sizes or sample sizes for work measurement observations. Also called an alignment chart.N N



The function of physically separating a homogeneous subgroup from a heterogeneous population of items.S



One or more unassembled items shipped together as a set of items.B


scenario forecasts

Plans for how an organization will respond to anticipated future situations.S



The part of a company’s total assets not provided by creditors; owner-invested funds.E



Abbreviation for electronic funds transfer.E


operating decision

Planning operations to meet demand in the short-term or intermediate-term.O


profound knowledge

A quality-related concept created by W. Edwards Deming. The four aspects of profound knowledge are appreciation of a system, knowledge about variation, theory of knowledge, and psychology.P


scrap factor

A factor that expresses the quantity of a particular component that is expected to be scrapped upon receipt from a vendor, completion of production, or while that component is being built into a given assembly. It is usually expressed as a decimal value. For a given operation or process, the scrap factor plus the yield factor is equal to one. If the scrap factor is 30 percent (or .3), then the yield is 70 percent (or .7). In manufacturing planning and control systems, the scrap factor is usually related to a specific item in the item master, but may be related to a specific component in the product structure. For example, if 50 units of a product are required by a customer and a scrap factor of 30 percent (a yield of 70 percent) is expected, then 72 units (computed as 50 units divided by .7) should be started in the manufacturing process. Syn: scrap rate. See: yield, yield factor.S


combined lead time

Syn: cumulative lead time.C


stockout probability

Syn: cycle service level.S



Abbreviation for approved vendor list.A



1) How effectively a company can grow its business in order to meet demand. 2) How effectively the solution to a problem can be scaled up as the problem’s size increases.S


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: weighted-point plan.C


Scanlon plan

A system of group incentives on a company-wide or plant-wide basis that sets up one measure that reflects the results of all efforts. The universal standard is the ratio of labor costs to sales value added by production. If there is an increase in production sales value with no change in labor costs, productivity has increased while unit cost has decreased.S S


zero inventories

Syn: just in time.Z Z


stacked lead time

Syn: cumulative lead time.S


data cleansing

Sifting through a database to find and fix mistakes such as misspelling, missing information, and false data.D


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.E


personnel class

A means to describe a grouping of people with similar characteristics for purposes of scheduling and planning.P


total cumulative manufacturing cycle time

Average time between a part entering a manufacturing system and completion of final packaging.T


current liabilities

The debts owed by a company and expected to be paid within 12 months. See: liabilities, balance sheet.C



1) In project management, the lowest level to which work can be subdivided on a project. 2) In activity-based cost accounting, a task, a subdivision of an activity, is the least amount of work. Tasks are used to describe activities.T


customer surveys

Devices such as interviews or questionnaires that aim to collect user data and preferences about product or service characteristics.C


mean time to repair (MTTR)

The average time that it takes to repair a product.M


smoothing factor

Syn: smoothing constant.S


group technology work cells

A concentrated area for producing parts based on similar operations and/or characteristics to use equipment and labor more efficiently.G


activity identifier

A unique alphanumeric code that differentiates one project activity from other activities.A



The ability of a bar code reader to read several different types of symbols consecutively.A



Abbreviation for voice of the customer.V


refurbished parts

Syn: remanufactured parts.R



The act of identifying an item as not meeting quality specifications.R


direct costing

Syn: variable costing.D



Reprocessing to salvage a defective item or part.R


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.C


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.E


event-on-arrow network

Syn: activity-on-arrow network.E


single-level where-used

Single-level where-used for a component lists each parent in which that component is directly used and in what quantity. This information is usually made available through the technique known as implosion.S


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 other firms that display best-in-class achievement.B


activity resource estimating

Estimating the types and amounts of resources that will be needed for various project activities.A



Any unique and verifiable product or result that is needed to complete a process or project.D


customer coproduction

The customer is part of the service delivery process. For example, in grocery stores customers often have the option to use the self checkout. C


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), where process batch and transfer batch are assumed to be the same or equal. Syn: gap phasing, straight-line schedule. Ant: overlapped schedule.G



The amount of each bill-of-material component used in the production process to make the parent.C


budgeted cost of work performed

In project management, this term has been replaced with the term earned value.B


beta test

A term used to describe the pilot evaluation of a good or service (i.e., “the second evaluation”).B


operating cycle

The three primary activities of a company are purchasing, producing, and selling a product. The operating cycle is calculated by adding the inventory conversion period to the receivables conversion period.O



Abbreviation for request for quote.R


key success factors

The product attributes, organizational strengths, and accomplishments with the greatest impact on future success in the marketplace.K


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.I


pledging of accounts receivable

The act of securing a loan by pledging a company’s accounts receivable.P


controlled issue

Syn: planned issue.C


pilot lot

A relatively small preliminary order for a product. The purpose of this small lot is to correlate the product design with the development of an efficient manufacturing process.P



Abbreviation for total productive maintenance.T


queue discipline

A parameter in queuing theory that determines the order in which customers are to be served.Q


attractability efficiency

In e-commerce, a measure of how well an organization persuades people who are aware of its website to actually use the site. See: conversion efficiency.A


design for the environment (DFE)

Considering health, safety, and environmental aspects of a product during the design and development phase of product development.D


visual inspection

Inspection performed without test instruments.V



The average time starting when an order is ready for delivery to a customer and when the customer actually receives the delivery.O


time-phased order point (TPOP)

MRP-like time planning logic for independent demand items, where gross requirements come from a forecast, not via explosion. This technique 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. Time-phased order point is an approach that uses time periods, thus allowing for lumpy withdrawals instead of average demand. When used in distribution environments, the planned order releases are input to the master schedule dependent demands. See: fixed reorder quantity inventory model.T



Abbreviation for plan-do-check-action.P


floating storage location

Syn: random-location storage.F



1) The physical movement of items from a stocking location. See: disbursement. 2) Often, the transaction reporting of this activity.I



Abbreviation for triple bottom line.T



Abbreviation for artificial intelligence.A



Syn: expedite.S


matrix organizational structure

An organizational structure in which two (or more) channels of command, budget responsibility, and performance measurement exist simultaneously. For example, both product and functional forms of organization could be implemented simultaneously, that is, the product and functional managers have equal authority and employees report to both managers.M



A network connection to a partner’s network using secure information processing and internet protocols to do business.E


special cause

Syn: assignable cause.S


third-party logistics (3PL)

A buyer and supplier team with a third party that provides product delivery services. This third party may provide added supply chain expertise.T


source inspection

Inspection at the source of supply or production (e.g., the supplier or the work center) as opposed to inspection following receipt from the supplier or following transfer of the items from one work center to another.S


Ishikawa diagram

Syn: cause-and-effect diagram.I


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.E


horizontal merger

An alliance of two or more competing firms.H



The flow of information back into the control system so that actual performance can be compared with planned performance.F


actual volume

Actual output expressed as a volume of capacity. It is used in the calculation of variances when compared with demonstrated capacity (practical capacity) or budgeted capacity.A


Certified Supply Chain Professional

The APICS designation that recognizes a high level of professional knowledge in supply chain management.C


international company

Company that uses production sharing and sells its products in a different country.I


cyclical demand

Demand influenced by the increases and decreases in the economy over time.C D


TS 16949

Syn: ISO/TS 16949.T


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. See: due date.A


Dewey’s reflective thinking

A problem solving 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.D



Abbreviation for collaborative planning, forecasting, and replenishment.C


right the first time

A term used to convey the concept that it is beneficial and more cost-effective to take the necessary steps the first time to ensure that a good or service meets its requirements than to provide a good or service that will need rework or not meet customers’ needs. In other words, an organization should engage in defect prevention rather than defect detection.R


graphical evaluation and review technique (GERT)

A network analysis technique that allows for probability distributions of activity durations and also conditions under which some activities may not be carried out. See: critical path method, network analysis, program evaluation and review technique.G



Abbreviation for request for proposal.R


exclusive use

Carrier vehicles assigned for the exclusive use of a particular shipper.E


net inventory

Syn: available inventory.N


return on net assets

Profit divided by assets excluding depreciation.R



Abbreviation for manufacturing planning and control.M


facility layout

Describes where machines and utilities will be located in a facility, as well as the arrangement of processes.F


firms. These types are (1) Pure monopoly

Only one firm provides a particular product or service. The monopoly


production lot

A group of material that is processed in one stage of production and put in inventory for further production (or for shipment to customers).P


gray box design

A situation in which the supplier and client jointly design a product or service. See: black box design.G



In project management, the approved timephased plan for the schedule or cost of a piece of work, including approved changes.B



A sign board with signal lights used to make workers and management aware of a quality, quality, or process problem.A


inventory tax

Tax based on the value of inventory on hand at a particular time.I


advance ship notice (ASN)

An electronic data interchange (EDI) notification of shipment of product.A


multicountry strategy

A strategy in which each country market is self-contained. Customers have unique product expectations that are addressed by local production capabilities. Syn: multidomestic strategy.M


secular trend

The general direction of the long-run change in the value of a particular time series.S



1) Removal of material from stores. 2) A transaction issuing material to a specific location, run, or schedule.W


value added

1) In accounting, the addition of direct labor, direct material, and allocated overhead assigned at an operation. It is the cost roll-up as a part goes through a manufacturing process to finished inventory. 2) In current manufacturing terms, the actual increase of utility from the viewpoint of the customer as a part is transformed from raw material to finished inventory. It is the contribution made by an operation or a plant to the final usefulness and value of a product, as seen by the customer. The objective is to eliminate all nonvalue- added activities in producing and providing a good or service.V


artificial intelligence (AI)

1) Computer programs that can learn and reason in a manner similar to 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 stepby- step procedures. 2) An area in computer science that attempts to develop AI computer programs.A


methods study

An analysis to improve the efficiency of work by studying the existing method to identify and eliminate wasted motion.M


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.C


overhead pool

The collection of overhead costs that are to be allocated over a specified group of products.O


mutually exclusive project

In capital budgeting, a project that will not be accepted if a competing project is accepted. See: contingent project, independent project.M


discrete manufacturing

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



1) Carrier 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. See: demurrage, detention. 2) The use of priority package delivery to achieve overnight or secondday delivery.E


of the following phases

identification; research and analysis of market opportunities; selection of target markets; development of marketing strategies; development of the marketing plans, programs, and projects; and management, execution, and control of the market plans, programs, and projects.M M



Carrying and power unit to move goods over ways. Includes all forms of transportation means except pipeline. The carrier generally owns or leases the vehicles, but a shipper also may own or lease.V



Abbreviation for organizational development.O


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. The master-scheduled quantities of the super bill explode to create requirements for the modules that also are master scheduled. See: pseudo bill of material.S


green logistics

A purchasing firm has the responsibility to properly dispose of packaging supplies received with items ordered.G


shelf life control

A technique of physical first-in, firstout usage aimed at minimizing stock obsolescence.S


mini-land-bridge traffic

A multimodal transportation solution that moves goods over water and then land, with the final destination being on the opposite coast. See: micro-land-bridge traffic.M



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.D


weighted-factor rating model

A method to analyze the advantages of various locations along several qualitative and quantitative dimensions.W


minor setup

The incremental setup activities required when changing from one item to another within a group of items.M



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.G


distribution channel

The distribution route, from raw materials through consumption, along which products travel. See: channels of distribution, marketing channel.D


time study

Timing employees as they accomplish jobs for the purpose of setting time standards.T



Acronym for Certified in Integrated Resource Management.C


parallel schedule

The use of two or more machines or job centers to perform identical operations on a lot of material. Duplicate tooling and setup are required.P


inventory effectiveness index

A system to identify nonvalue- adding inventory and make it visible and provide a process to measure non-value adding inventory and sell or write it off to keep working capital in control.I I


repeatability of measurement

The variation in measurements obtained when one measurement instrument is used several times by an appraiser while measuring the identical characteristic on the same part.R



A limitation of capability that limits functioning within a plant or a company.D


released order

Syn: open order.R


DMAIC process

Acronym for define, measure, analyze, improve, and control process.D


specific performance

A contract remedy requiring defendants to do what they have contracted to do.S



A coaxial cable offering several channels for text, voice, and/or video transmission.B


demand pull

The triggering of material movement to a work center only when that work center is ready to begin the next job. In effect, it shortens or eliminates the queue from in front of a work center, but it can cause a queue at the end of a previous work center. Demand pull also can occur within a supply chain, in which case it often is called a demand chain.D


stable demand

Products that keep a similar demand pattern no matter what the season or time. Staple products fall into this category.S


cascaded systems

Multistage operations. The input to each stage is the output of a preceding stage, thereby causing interdependencies among the stages.C



Abbreviation for single-minute exchange of die.S


deseasonalized data

Data from which seasonality has been removed using annual moving averages.D


operations sequence

The sequential steps for an item to follow in its flow through the plant. For instance, operation 1: cut bar stock; operation 2: grind bar stock; operation 3: shape; operation 4: polish; operation 5: inspect and send to stock. This information is normally maintained in the routing file.O



Developing relationships with people who may be able to enhance the performance of duties or responsibilities.N


cost object

In activity-based cost accounting, anything for which a separate cost measurement is desirable. This may include a product, a customer, a project, or other work unit.C


finite scheduling

Syn: finite loading.F



In lean, the resource that is scheduled based on the customer demand rate for that specific value stream. It is that resource which performs an operation or process that governs the flow of materials along the value stream. Its purpose is to maintain a smooth flow through the manufacturing plant; a larger buffer is provided for the pacemaker than other resources so that it can maintain continuous operation. See: constraint.P


open period

Accounting time period for which the books will still accept adjusting entries and postings. Ant: closed period.O


skill-based compensation

A method of employee compensation that bases the employee’s wage rate on the number of skills the employee is qualified to perform. People who are qualified to do a wider variety of skills are paid more. See: labor grade.S


online receiving

An unloading process characterized by computers or terminals wherever shipments are received and employees enter delivery data into the system as the shipments are unloaded.O


period costs

All costs related to a period of time rather than a unit of product (e.g., marketing costs, property taxes).P



Activities that provide present benefit without compromising the needs of future generations.S T


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.I


on-order stock

The total of all outstanding replenishment orders. The on-order balance increases when a new order is released, and it decreases when material is received against an order or when an order is canceled.O


quality audit

A systematic, independent examination and review to determine whether quality activities and related results comply with planned arrangements and whether these arrangements are implemented effectively and are suitable to achieve the objectives.Q


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. (Also called capacity constraint resource.)C


master production schedule (MPS)

The master production schedule is a line on the master schedule grid that reflects the anticipated build schedule for those items assigned to the master scheduler. The master scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives material requirements planning. It represents what the company plans to produce expressed in specific configurations, quantities, and dates. The master production schedule is not a sales item forecast that represents a statement of M demand. The master production schedule must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. See: master schedule.M


yield management

An approach commonly used by services with highly perishable products, in which prices are regularly adjusted to maximize total profit.Y



A project management technique that provides a response to a negative risk that has happened. A workaround is different from a contingency plan because a workaround is not planned before the risk event occurs.W


internet service provider (ISP)

A business or organization that sells access to the internet and related services to consumers. For a monthly fee, the service provider offers a software package, username, password, and access to the internet (via various technologies such as dial-up and DSL), which enables users to browse the World Wide Web and USENET 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.I


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.A


consortia trade exchanges (CTX)

An online marketplace, usually owned by a third party, that allows members to trade with each other. This site lowers members search costs and enables lower prices for the buyer.C


failure costs

A term used within the cost of poor quality model to include both internal and external failure costs. See: cost of poor quality, external failure costs, internal failure costs.F


laid-down cost

The sum of the product and transportation costs. The laid-down cost is useful in comparing the total cost of a product shipped from different supply sources to a customer’s point of use.L



activity A must be finished before activity



Acronym for technical/office protocol.T


plant within a plant

Syn: factory within a factory.P



The unpredictable or random difference between the observed data and the “true process.”N


operating system

A set of software programs that control the execution of the hardware and application programs. The operating system manages the computer and network resources through storage management, disk input/output, communications linkages, program scheduling, and monitoring system usage for performance and cost allocations.O



Abbreviation for integrated internet marketing.I


point-of-purchase (POP) display

A sales promotion tool located at a checkout counter.P


red bead experiment

An experiment developed by W. Edwards Deming to illustrate the impossibility of putting employees in rank order of performance. The experiment shows that it would be a waste of management’s time to try to find out why one worker produced more errors than another; management should instead improve the system, making it possible for everyone to achieve higher quality.R



Putting a resource to work.A


passive tag

A RFID tag which does not send out data and is not self-powered. See: radio frequency identification (RFID) tag.P


critical processes

Processes that have large potential


correlation coefficient

A measure of the degree of correlation between two values, which has a range from -1 to 1.C


parallel engineering

Syn: participative design/ engineering.P


start manufacture to order complete manufacture

The time from when the manufacturing of an order starts until an order is ready to be shipped to the customer.S


product-focused production

A type of operation designed to process only a few different products, which are usually produced for inventory; production rates tend to be greater than the demand rate.P


repetitive process

Syn: repetitive manufacturing.R


yard management system (YMS)

A system that organizes and directs the traffic of all vehicles in the parking yards located at various industrial buildings, like warehouses, distribution centers and manufacturing plants.Y


priority rules

Simple heuristics used to select the order in which jobs will be processed.P


move ticket

A document used in dispatching to authorize or record movement of a job from one work center to another. It may also be used to report other information, such as the actual quantity or the material storage location.M


sample size

The number of elements selected for analysis from the population.S



A high-level process map that shows substantial subprocesses in an organization’s process together with the structure of the process represented by the suppliers, inputs, outputs, and customers. A SIPOC diagram defines the critical aspects of a process without losing the overall perspective.S


quality circle

A small group of people who normally work as a unit and meet frequently to uncover and solve problems concerning the quality of items produced, process capability, or process control. Syn: quality control circle. See: small group improvement activity.Q



Time when a resource is scheduled for operation but is not producing for reasons such as maintenance, repair, or setup.D


labor grade

A classification of workers whose capability indicates their skill level or craft. See: skill-based compensation, skills inventories.L


sales order configuration

Syn: customer order servicing system.S


production standard

A time standard to produce piece parts and assemblies.P



A measure of the weight of an item compared to its volume. Because density can influence the number of units that can be carried by a particular truck, this is a factor in defining transportation charges.D



Abbreviation for general and administrative expenses.G


process flowchart

Syn: flow process chart.P


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.D



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.E


turnaround costs

Syn: setup costs.T


employee stock ownership plan (ESOP)

In the United States, a program that encourages workers to purchase


master scheduler

Often the job title of the person charged with the responsibility of managing, establishing, reviewing, and maintaining a master schedule for select items. Ideally, the person should have substantial product, plant, process, and market knowledge because the consequences of this individual’s actions often have a great impact on customer service, material, and capacity planning. See: master production schedule.M


static inventory models

Syn: single-period inventory models.S


sales planning

The process of determining the overall sales plan to best support customer needs and operations capabilities while meeting general business objectives of profitability, productivity, competitive customer lead times, and so on, as expressed in the overall business plan. See: production planning, sales and operations planning.S


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: cost-type contract.C


search engines

Web software that enables a user to find a page or website devoted to a particular topic.S


joint order

An order on which several items are combined to obtain volume or transportation discounts.J


cost of quality

Syn: cost of poor quality.C



Any representations, such as alphabetic or numeric characters, to which meaning can be assigned.D



Materials surrounding an item to protect it from damage during transportation. The type of packaging influences the danger of such damage.P


design phase

One of the six sigma phases of quality. It involves improvement project identification and selection. See: design-measure-analyze-improve-control process.D


usage rate

Demand per product per unit of time.U



Abbreviation for Global Reporting Initiative.G


free float

In 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.F



An accessory that has to be physically attached to the product. See: feature.A


focused low-cost strategy

Targeting a market with a low-cost product line in order to lower the cost of sales and increase gross margin.F


blue sky

Goodwill associated with the acquisition of a company asset.B


general warranty

An assurance that the product is fit for use. See: special warranty, warranty.G



1) The reintroduction of partially processed product or carrier solvents from one operation or task into a previous operation. 2) A recirculation process.R



A contractual obligation by one entity to another that a fact regarding a product is true. See: warranty.G


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 bill of material records (or product structure records), thus defining the bill of material. Syn: item master record, part master record, part record.I J J


variables data

Measurement information. Control charts based on variables data include average (X-bar) charts, range (R) charts, and sample standard deviations charts.V


plan for every part (PFEP)

Consolidated information stored in a single record that contains everything needed to know about a part to plan it effectively. It includes usage, container information, storage location, item description, and supplier or procurement information.P



Generally, a classification of employees/jobs for which 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 U.S. Department of Labor Fair Labor Standards Act, which regulates minimum wages and overtime for nonexempt employees. See: exempt positions, nonexempt positions.E


product group forecast

A forecast for a number of similar products. See: aggregate forecast, product group.P


product manager

Syn: brand manager.P


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.I


risk response planning

The process of developing a plan to avoid risks and to mitigate the effect of those that cannot be avoided.R


probabilistic demand models

Statistical procedures that represent the uncertainty of demand by a set of possible outcomes (i.e., a probability distribution) and that suggest inventory management strategies under probabilistic demands.P


value stream

The processes of creating, producing, and delivering a good or service to the market. For a good, the value stream encompasses the raw material supplier, the manufacture and assembly of the good, and the distribution network. For a service, the value stream consists of suppliers, support personnel and technology, the service “producer,” and the distribution channel. The value stream may be controlled by a single business or a network of several businesses.V V



The Japanese term for improvement; continuing


check sheet

A simple data-recording 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 checklistsC


numerical control (NC)

A means of operating a machine tool automatically by the use of coded numerical instructions.N O



Abbreviation for integrated resource management.I


activity-on-arc network

Syn: activity-on-arrow network.A


production forecast

A projected level of customer demand for a feature (option, accessory, etc.) of a maketo- order or an assemble-to-order product. Used in twolevel master scheduling, it is calculated by netting customer backlog against an overall family or product line master production schedule and then factoring this product’s available-to-promise by the option percentage in a planning bill of material. See: assemble-to-order, planning bill of material, two-level master schedule.P


run-out method

A method of assigning available production or storage capacity to products based on the product’s demand and inventory level.R


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).G



A quotation specifically given to a prospective purchaser upon request, usually in competition with other vendors. See: quotation.B


planning fence

Syn: planning time fence.P


certificate of public convenience and necessity

A certificate that grants authority to a particular carrier, enabling that carrier to act as a common carrier in serving and transporting commodities to a specific area.C


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.C



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.C


product-positioned strategy

Locating operations close to the sources of supply. See: market-positioned strategy.P



Syn: requirements explosion. Ant: implosion.E


count chart

Syn: c chart.C



Syn: supplier scheduler.P


committed capability

The portion of the production capability that is currently in use or is scheduled for use.C



In the process industries, the raw material or component of a mixture. See: component.I


decisions under risk

Decision problems in which the analyst elects to consider several possible futures, the probabilities of which can be estimated.D



Abbreviation for Federal Trade Commission.F


periodic maintenance

Syn: preventive maintenance.P


uncontrollable factors

In the environment of a production system, those factors that cannot be changed (e.g., temperature, natural causes, weather, vibration).U


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.B


leveraged buyout (LBO)

A takeover of a company using borrowed funds where assets of the acquired company are used as partial collateral for the loan.L


random variation

A fluctuation in data that is caused by uncertain or random occurrences. See: random events.R


Environmental Protection Agency (EPA)

A U.S. agency with regulatory authority over matters affecting the environment, including waste generation and habitat destruction.E


activity list

A record of planned activities in a project, including an activity description and an activity identifier.A



In project management, the length of time an activity is estimated to require.D


fluctuation stock

Syn: fluctuation inventory.F


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 per work center to support the master schedule. This technique eliminates the need for engineered time standards. Syn: overall factors. See: bill of resources, capacity planning, resource profile, rough-cut capacity planning.C


process-focused organization

An organization that is oriented toward executing linked activities that constitute a given end-to-end business process with a given set of resources. Responsibilities of the members of the organization are oriented toward the performance of the process that creates the product or service and not toward a product or functional silo. See process focused, product focused.P


accidental death and disability (AD&D)

Insurance that often is part of an employee benefit package, providing payment for either accidental death or disability.A


step budget

A budget that establishes anticipated targets at which an operation will perform for each step or level of production. A step budget can be likened to several different fixed budgets. This method of budgeting is useful because most of the manufacturing overhead expenditures vary in steps, not as a straight line. See: flexible budget.S


project summary work breakdown structure

A work breakdown structure that is developed down to the subproject level of detail. See: work breakdown structure.P


push system

1) In production, the production of items at times required by a given schedule planned in advance. 2) In material control, the issuing of material according to a given schedule or issuing material to a job order at its start time. 3) In distribution, a system for replenishing field warehouse inventories where replenishment decision making is centralized, usually at the manufacturing site or central supply facility. See: pull system.P


opportunity cost

1) The return on capital that could have resulted had the capital been used for some purpose other than its present use. 2) The rate of return investors must earn to continue to supply capital to a firm.O



Mixing entertainment and education elements to make learning more fun.E


production control

The function of directing or regulating the movement of goods through the entire manufacturing cycle from the requisitioning of raw material to the delivery of the finished products.P



The process of withdrawing from stock the components to make assemblies or finished goods. In distribution, the process of withdrawing goods from stock to ship to a distribution warehouse or to a customer.P


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.E


arithmetic mean

Syn: mean.A


earnings before interest and taxes (EBIT)

Syn: net operating income.E


line scrap

The worth of work in process and raw materials scrapped because of faulty processing as a percentage of the total value of production at standard cost.L



Monitoring of job progress to see that operations are performed on schedule or that purchased material or products will be received on schedule.F


preferred supplier

The supplier of choice.P


alpha release

An extremely early version of a product released to obtain feedback about its suitability.A


QS 9000

A variation of ISO 9000 certification with additional requirements tailored for the automobile industry, including suppliers. QS 9000 is being superseded by ISO/ TS 16949, which incorporates many European standards. See: ISO 9000, ISO/TS 16949.Q


successor activity

1) In project management, in an activity-on-arrow network, the activity (arrow) that departs a node. 2) In project management, in an activityon- node network, the activity at the tip of the arrow.S


shipping manifest

A document that lists the pieces in a shipment. A manifest usually covers an entire load regardless of whether the load is to be delivered to a single destination or too many destinations. Manifests usually list the items, piece count, total weight, and the destination name and address for each destination in the load.S



Abbreviation for part period balancing.P


decision matrix

A matrix used by teams to evaluate problems or possible solutions. After a matrix is drawn to evaluate possible solutions, for example, the team lists the solutions in the far left vertical column. Next, the team selects criteria to rate the possible solutions, writing them 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 D score is then used to help decide which solution deserves the most attention.D


apparent authority

Authority perceived by a third party to flow from a principal to an ostensible agent when in fact no agency relationship exists.A



Syn: overhead.B


critical path activity

In project management, any activity on a network’s critical path as determined by the critical path method.C


job analysis

A process of gathering (by observation, interview, or recording systems) significant taskoriented activities and requirements about work required of employees.J


infinite loading

Calculation of the capacity required at work centers in the time periods required regardless of the capacity available to perform this work. Syn: infinite scheduling.I


shortest processing time (SPT) rule

A dispatching rule that directs the sequencing of jobs in ascending order by processing time. If this rule is followed, the most jobs at a work center per time period will be processed. As a result, the average lateness of jobs at that work center is minimized, but some jobs will be very late. Syn: smallest processing time rule.S


production activity control (PAC)

The function of routing and dispatching the work to be accomplished through the production facility and of performing supplier control. PAC encompasses the principles, approaches, and techniques needed to schedule, control, measure, and evaluate the effectiveness of production operations. See: shop floor control.P



Abbreviation for application service provider.A


human resources

The portion or department of a company that sets personnel policies and practices.H


inventory drivers

Those conditions that would lead a company to hold inventory.I


replenishment lead time

The total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf available for use. Syn: reorder cycle.R


supplier scheduling

A purchasing approach that provides suppliers with schedules rather than with individual hard-copy 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 that works well, because it is essential in this arrangement to provide the supplier with valid due dates. Syn: vendor scheduling.S


flow control

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. See: shop floor control.F


on order

The number or value of goods or services that have been ordered but not received at a location.O


capital asset

A physical object that is held by an organization for its production potential and that costs more than some threshold value.C


multimodal solutions

Transportation plans that involve multiple means of transportation and coordinate the physical and information requirements.M



A term that refers to standardization (e.g., standard locations for tools and equipment). See: five Ss.S


production sharing

A network of companies that participates in product design, production, marketing, distribution, and service.P


delivery window

A time frame for when goods or services should be delivered.D


cash spin or free cash spin

The advantage of reducing inventory in the supply chain and reallocating the saved capital in a more profitable direction.C


out of spec

A term used to indicate that a unit does not meet a given specification.O


negative float

In project management, the amount of time that must be made up on an activity to get the project back on schedule. See: float.N