APICS Deck 9 OO Flashcards Preview

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Flashcards in APICS Deck 9 OO Deck (499):
1

uniform-delivered pricing

A type of geographic pricing policy in which all customers pay the same delivered price regardless of their location. A company allocates the total transportation cost among all customers.U

2

prototyping

1) A specialized product design and development process for developing a working model of a product. 2) A specialized system development process for performing a determination where user needs are extracted, presented, and developed by building a working model of the system. Generally, these tools make it possible to create all files and processing programs needed for a business application in a matter of days or hours for evaluation purposes.P

3

shortage cost

The marginal profit that is lost when a customer orders an item that is not immediately available in stock.S

4

excess issue

The removal from stock and assignment to a schedule of a quantity higher than the schedule quantity. Syn: overissue.E

5

Baldrige lite

A state or company quality award program modeled after the Malcolm Baldrige National Quality Award but with a simplified application process.B

6

run diagram

Syn: run chart.R

7

accident prevention

The application of basic scientific

8

planned start date

Syn: scheduled start date.P

9

semipassive tag

An RFID tag that sends out data, is self-powered, and widens its range by harnessing power from the reader. See: radio frequency identification (RFID).S

10

fixed order quantity

A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof, if net requirements for the period exceed the fixed order quantity.F

11

checking

Verifying and documenting the order selection in terms of both product number and quantity.C

12

support costs

In activity-based cost accounting, activity costs not directly related with producing a product, such as the cost of the information system.S

13

cost equalization point (CEP)

A point or quantity at which the cost curves of two manufacturing methods have an equal value.C

14

least total cost

A dynamic lot-sizing technique that calculates the order quantity by comparing the setup (or ordering) costs and the carrying cost for various lot sizes and selects the lot size where these costs are most nearly equal. See: discrete order quantity, dynamic lot sizing.L

15

redundant component

A backup part of a machine or product.R

16

operation/process yield

The ratio of usable output from a process, process stage, or operation to the input quantity, usually expressed as a percentage.O

17

unplanned repair

Repair and replacement requirements that are unknown until remanufacturing teardown and inspection.U

18

OEE

Abbreviation for overall equipment effectiveness.O

19

critical ratio

A dispatching rule that calculates a priority index number by dividing the time to due date remaining by the expected elapsed time to finish the job. For example, critical ratio

20

SWOT

Abbreviation for strengths, weaknesses, opportunities, and threats.S

21

pre-expediting

The function of following up on open orders before the scheduled delivery date, to ensure the timely delivery of materials in the specified quantity.P

22

process flow production

A production approach with minimal interruptions in the actual processing in any one production run or between production runs of similar products. Queue time is virtually eliminated by integrating the movement of the product into the actual operation of the resource performing the work.P

23

split-case order picking

A process for filling less-thanfull- case orders. This requires items to be picked from a case or other container.S

24

JIT master schedule

Syn: level schedule (second definition).J

25

import broker or sales agent

Purchasing agent who charges a fee for transactions but does not take the title of the goods.I

26

tool number

The identification number assigned to reference and control a specific tool.T

27

fault tree analysis

A logical approach to identify the probabilities and frequencies of events in a system that are most critical to uninterrupted and safe operation. This analysis may include failure mode effects analysis (determining the result of component failure interactions toward system safety) and techniques for human error prediction.F

28

order preparation

All activities relating to the administration, picking, and packaging of individual customer or work orders.O

29

six sigma quality

The six sigma approach is a set of concepts and practices that key on reducing variability in processes and reducing deficiencies in the product. Important elements are (1) Producing only 3.4 defects for every one million opportunities or operations; (2) Process improvement initiatives striving for six sigmalevel performance. Six sigma is a business process that permits organizations to improve bottom-line performance, creating and monitoring business activities to reduce waste and resource requirements while increasing customer satisfaction.S

30

survey research

A form of research (frequently used in marketing research) where data are collected by mailing questionnaires to a group of people within a target audience. See: marketing research.S

31

debt-to-equity ratio

The amount of bonds and preferred stocks relative to the owners’ equity position. The debt to equity ratio is a measurement of the use of borrowed funds to leverage owners’ equity.D

32

observational research

A form of research (frequently used in marketing research) where data are gathered by direct observation of consumers in the market place. See: marketing research.O

33

total float

In project management, the length of time an activity can be late without delaying succeeding activities. See: float, free float, independent float.T

34

demand-driven supply network

A situation where a customer purchase initiates real-time information flows through the supply chain which then causes movement of product through the network.D

35

cash cow

A highly profitable product in a low-growth market. See: growth-share matrix.C

36

plan-do-check-act cycle

Syn: plan-do-check-action.P

37

upcharges

Additional charges that are added to a delivered bill that are not included in the original contract. These occur because of unforeseen increases to the deliverer’s cost base.U

38

deployment planning and scheduling

Planning how to use existing inventory to meet demand requirements.D

39

deterministic models

Models where no uncertainty is included (e.g., inventory models without safety stock considerations).D

40

annual inventory count

Syn: physical inventory.A

41

anticipation inventories

Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations.A

42

promotional product

A product that is subject to wide fluctuations in sales because it is usually sold at a reduced price or with some other sales incentive.P

43

cost estimation

(1) Specification of the relationship between cost and the underlying cost drivers. (2) In project management, creating an approximation of the resources and associated costs needed to complete a project.C

44

confidence interval

The range on either side of an estimated value from a sample that is likely to contain the true value for the whole population.C

45

net sales

Sales dollars the company receives; gross sales minus returns and allowances.N

46

National Labor Relations Board (NLRB)

In the United States, the federal agency that regulates labor law.N

47

branch warehouse demand

Syn: warehouse demand.B

48

pick date

The start date of picking components for a production order. On or before this date, the system produces a list of orders due to be picked, pick lists, tags, and turnaround cards.P

49

indirect materials

Syn: supplies.I

50

bill of lading (uniform)

A carrier’s contract and receipt for goods the carrier agrees to transport from one place to another and to deliver to a designated person. In case of loss, damage, or delay, the bill of lading is the basis for filing freight claims.B

51

five Ws

Syn: five whys.F

52

short-cycle manufacturing

Syn: just in time.S

53

diversification strategy

An expansion of the scope of the product line to exploit new markets. A key objective of a diversification strategy is to spread the company’s risk over several product lines in case there should be a downturn in any one product’s market.D

54

labor efficiency variance

Labor efficiency variance is (actual number of hours worked minus standard number of hours worked) multiplied by standard labor wage rate. The variance is unfavorable if the actual hours exceed the standard hours. Syn: labor usage variance.L

55

UN Global Compact Management Model

A framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the United Nations Global Compact and its principles.U

56

competitive differentiator

A characteristic that makes a company or product unique within a marketplace.C

57

euro

Official currency of the Eurozone, which forms a large part of the European Union.E

58

inspection ticket

Frequently used as a synonym for an inspection order; more properly a reporting of an inspection function performed.I

59

backup support

An alternate location or maintainer that can provide the same service response or support as the primary location or maintainer.B

60

routing

1) Information detailing the method of manufacture of a particular item. It includes the operations to be performed, their sequence, the various work centers involved, and the standards for setup and run. In some companies, the routing also includes information on tooling, operator skill levels, inspection operations and testing requirements, and so on. Syn: bill of operations, instruction sheet, manufacturing data sheet, operation chart, operation list, operation sheet, route sheet, routing sheet. See: bill of labor, bill of resources. 2) In information systems, the process of defining the path a message will take from one computer to another computer.R

61

process batch

The quantity or volume of output that is to be completed at a workstation before switching to a different type of work or changing an equipment setup.P

62

FEFO

Abbreviation for first expiry first out.F

63

setup time

The time required for a specific machine, resource, work center, process, or line to convert from the production of the last good piece of item A to the first good piece of item B. Syn: setup lead time.S

64

total employee involvement (TEI)

An empowerment program in which employees are invited to participate in actions and decision making that were traditionally reserved for management.T

65

inventory balance location accuracy

When the inventory count is accurate at specific locations.I

66

productive capacity

In the theory of constraints: The maximum of the output capabilities of a resource (or series of resources) or the market demand for that output for a given time period. See: excess capacity, idle capacity, protective capacity.P

67

outsourcing

The process of having suppliers provide goods and services that were previously provided internally.

68

MTBF

Abbreviation for mean time between failures.M

69

procedure manual

A formal organization and indexing of a firm’s procedures. Manuals are usually printed and distributed to the appropriate functional areas.P

70

total quality engineering (TQE)

The discipline of designing quality into the product and manufacturing processes by understanding the needs of the customer and performance capabilities of the equipment. See: design for quality.T

71

caveat emptor

A Latin phrase meaning “Let the buyer beware.” (i.e., the purchase is at the buyer’s risk.)C

72

problems. In the first phase

the diagnostic journey team journeys from the symptom of a chronic problem

73

stockpoint

A designated location in an active area of operation into which material is placed and from which it is taken. Not necessarily a stockroom isolated from activity, it is a way of tracking and controlling active material.S

74

sole source

The situation where the supply of a product is available from only one organization. Usually technical barriers such as patents preclude other suppliers from offering the product. See: single sourcing.S

75

earnings before taxes (EBT)

Earnings before interest and taxes minus interest charges.E

76

distributed systems

Computer systems in multiple locations throughout an organization, working in a cooperative fashion, with the system at each location primarily serving the needs of that location but also able to receive and supply information from other systems within a network.D

77

near-critical activity

In project management, a project activity with a low slack or float value.N

78

moving average

An arithmetic average of a certain number (n) of the most recent observations. As each new observation is added, the oldest observation is dropped. The value of n (the number of periods to use for the average) reflects responsiveness versus stability in the same way that the choice of smoothing constant does in exponential smoothing. There are two types of moving average, simple and weighted. See: simple moving average, weighted moving average.M

79

schedule chart

Usually a large piece of graph paper used in the same manner as a control board. Where the control board often uses strings and markers to represent plans and progress, the schedule chart is typically filled in with pencil. See: control board.S

80

random-location storage

A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although this random method requires the use of a locator file to identify part locations, it often requires less storage space than a fixedrandom R location storage method. Syn: floating inventory location system, floating storage location. See: fixed-location storage.R

81

margin

A ratio of an organization’s operating profit to revenues, measuring management’s ability to control operating expenses.M

82

acquisition cost

The cost required to obtain one or more units of an item. It is order quantity times unit cost. See: ordering cost.A

83

cybernetic system

The information flow or information system (electronic, mechanical, logical) that controls an industrial process.C

84

order-fill ratio

Syn: customer service ratio.O

85

transmission acknowledgement

The receiver of a transmission notifies the sender that the transmission was received error free.T transmission control protocol/internet protocol (TCP/

86

cleanup

The neutralizing of the effects of production just completed. It may involve cleaning residues, sanitation, equipment refixturing, and so on.C

87

supplier quality assurance

The confidence that a supplier’s goods or services will fulfill its customers’ needs. This confidence is achieved by creating a relationship between the customer and supplier that ensures that the product will be fit for use with minimal corrective action and inspection. According to J.M. Juran, nine primary activities are needed: (1) define product and program quality requirements, (2) evaluate alternative suppliers, (3) select suppliers, (4) conduct joint quality planning, (5) cooperate with the supplier during the execution of the contract, (6) obtain proof of conformance to requirements, (7) certify qualified suppliers, (8) conduct quality improvement programs as required, and (9) create and use supplier quality ratings.S

88

The ceiling is the target selling price

what the seller

89

pro forma financial statements

Financial statements that are based on an assumed scenario rather than an actual experience.P

90

independent float

In project management, the amount of float on an activity that does not affect float on preceding or succeeding activities. See: float, free float, total float.I

91

production network

The complete set of all work centers, processes, and inventory points, from raw materials sequentially to finished products and product families. It represents the logical system that provides the framework to attain the strategic objectives of the firm based on its resources and the products’ volumes and processes. It provides the general sequential flow and capacity requirement relationships among raw materials, parts, resources, and product families.P

92

fabrication order

A manufacturing order to a component-making department authorizing it to produce component parts. See: batch card, manufacturing order.F

93

cross-selling

Occurs when customers buy additional products or services after the initial purchase.C

94

total variable costs

Costs that vary in total in proportion to changes in activity.T

95

replacement order

An order for the replacement of material that has been scrapped.R

96

s-curve

In project management, graphic display of cumulative project attributes such as costs, labor hours, or percentage of work. The name derives from the typical shape of the curve.S

97

CIM

Acronym for computer-integrated manufacturing.C

98

marketing strategy

The basic plan marketing expects to use to achieve its business and marketing objectives in a particular market. This plan includes marketing expenditures, marketing mix, and marketing allocation.M

99

projected start date

The current estimate of the date when an activity will begin.P

100

production calendar

Syn: manufacturing calendar.P

101

customer segmentation

The practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing. Traditional segmentation focuses on identifying customer groups based on demographics and attributes such as attitude and psychological profiles.C

102

direct numerical control (DNC)

A system in which sets of numerical control machines are connected to a computer, allowing direct control of machines by the computer without use of external storage media.D

103

bond

A long-term debt of a firm.B

104

ABC inventory control

An inventory control approach based on the ABC classification.A

105

quality chart

Syn: Q chart.Q

106

other than direct labor and direct materials

that continue even if products are not produced. Although fixed overhead is necessary to produce the product, it cannot be directly traced to the final product.F

107

monopoly

Sole control of a market by a company. In the United States, a monopoly is a violation of Article 2 of the Sherman Act.M

108

Federal Trade Commission (FTC)

The United States governmental agency charged with protecting businesses and consumers from unfair business practices. It also regulates advertising and promotion at the national level.F

109

field warehouse

Syn: distribution center.F

110

order picking

Selecting or “picking” the required quantity of specific products for movement to a packaging area (usually in response to one or more shipping orders) and documenting that the material was moved from one location to shipping. Syn: order selection. See: batch picking, discrete order picking, zone picking.O

111

time period safety stock

A safety stock that is based on usage over a designated time frame. The period can be set as days, weeks, or months. Safety stock varies directly with the demand. This differs from statisticalbased safety stocks in that the amount is not based on deviation from demand.T

112

warehouse demand

The need for an item to replenish stock at a branch warehouse. Syn: branch warehouse demand.W warehouse management and transportation execution

113

reverse supply chain

The planning and controlling of the processes of moving goods from the point of consumption back to the point of origin for repair, reclamation, recycling, or disposal. See: reverse logistics.R

114

TOC

Abbreviation for theory of constraints.T

115

job shop scheduling

The production planning and control techniques used to sequence and prioritize production quantities across operations in a job shop.J

116

backlog

All the customer orders received but not yet shipped. Sometimes referred to as open orders or the order board. See: order backlog, past due order.B

117

start-to-finish

activity A must start before activity B can finish.L

118

statistical control charts

Data are collected from physical measurements, or customer surveys, and plotted on a chart so that conformance to specifications or customer satisfaction can be tracked and improved.S

119

ICC

Abbreviation for Interstate Commerce Commission.I I

120

order point

A set inventory level where, if the total stock on hand plus on order falls to or below that point, action is taken to replenish the stock. The order point is normally calculated as forecasted usage during the replenishment lead time plus safety stock. Syn: reorder point, statistical order point, trigger level. See: fixed reorder quantity inventory model.O

121

discrete available-to-promise

A calculation based on the available-to-promise figure in the master schedule. For the first period, the ATP is the sum of the beginning inventory plus the MPS quantity minus backlog for all periods until the item is master scheduled again. For all other periods, if a quantity has been scheduled for that time period then the ATP is this quantity minus all customer commitments for this and other periods until another quantity are scheduled in the MPS. For those periods where the quantity scheduled is zero, the ATP is zero (even if deliveries have been promised). The promised customer commitments are accumulated and shown in the period where the item was most recently scheduled. Syn: incremental available-to-promise. See: available-to-promise.D

122

trade bloc

An agreement between countries intended to reduce or remove barriers to trade within member countries. Frequently, but not always, those countries are geographically close. Examples of trade blocs are the European Economic Community and the North American Free Trade Agreement (NAFTA). Syn: trading bloc.T

123

constraint accounting

Syn: theory of constraints accounting.C

124

change order

A formal notification that a purchase order or shop order must be modified in some way. This change can result from modifications such as a revised quantity, date, or customer specification; an engineering change; or a change in inventory requirement date.C

125

change management

The business process that coordinates and monitors all changes to the business processes and applications operated by the business as well as to their internal equipment, resources, operating systems, and procedures. The change management discipline is carried out in a way that minimizes the risk C of problems that will affect the operating environment and service delivery to the users.C

126

asynchronous process

A condition with two related processes run to finish independently of each other.A

127

line

1) A specific physical space for the manufacture of a product that in a flow shop layout is represented by a straight line. In actuality, this may be a series of pieces of equipment connected by piping or conveyor systems. 2) A type of manufacturing process used to produce a narrow range of standard items with identical or highly L similar designs. Production volumes are high, production and material handling equipment is specialized, and all products typically pass through the same sequence of operations. See: assembly line.L

128

partial productivity factor

Syn: single-factor productivity.P

129

competitive edge

Syn: competitive advantage.C

130

allowed time

A normal time value increased by appropriate allowances.A

131

resource requirements planning

Syn: resource planning.R

132

DTF

Abbreviation for demand time fence.D

133

supplier scheduler

A person whose main job is working with suppliers regarding what is needed and when. Supplier schedulers are in direct contact with both MRP and the suppliers. They do the material planning for the items under their control, communicate the resultant schedules to their assigned suppliers, do follow-up, resolve problems, and advise other planners and the master scheduler when purchased items will not arrive on time to support the schedule. The supplier schedulers are normally organized by commodity, as are the buyers. By using the supplier scheduler approach, the buyers are freed from day-to-day order placement and expediting, and therefore have the time to do cost reduction, negotiation, supplier selection, alternate sourcing, and so forth. Syn: planner/buyer, vendor scheduler.S

134

accuracy

The degree of freedom from error or the degree of conformity to a standard. Accuracy is different from precision. For example, four-significant-digit numbers are less precise than six-significant-digit numbers; however, a properly computed four-significant-digit number might be more accurate than an improperly computed six-significant-digit number.A

135

incremental analysis

A method of economic analysis in which the cost of a single additional unit is compared to its revenue. When the net contribution of an additional unit is zero, total contribution is maximized.I

136

offload

To reschedule or use alternate routings to reduce the workload on a machine, work center, or facility.O

137

American Society for Quality (ASQ)

Founded in 1946, a not-for-profit educational organization with more than 100,000 individual and organizational members who are interested in quality improvement.A American Standard Code for Information Interchange

138

OS&D

Abbreviation for over, short, and damaged.O

139

contract

An agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise. A contract may be oral or written. A purchase order, when accepted by a supplier, becomes a contract. Acceptance may be in writing or by performance, unless the purchase order requires acceptance in writing.C

140

listserv

Syn: listserver.L L

141

nonscheduled hours

Hours when a machine is not generally available to be scheduled for operation; for example, nights, weekends, holidays, lunch breaks, major repair, and rebuilding.N

142

SIC

Abbreviation for standard industrial classification.S S

143

new product development team

Syn: participative design/engineering.N

144

interstate commerce

The movement of persons or property across one or more state lines for business purposes.I

145

transaction channel

A distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting.T

146

trend forecasting models

Methods for forecasting sales data when a definite upward or downward pattern exists. Models include double exponential smoothing, regression, and triple smoothing. See: trend analysis.T

147

earliest operation due date (ODD)

A dispatching rule that selects the job having the earliest due date for the impending operation. See: earliest due date.E

148

finished good waivers

Approvals for deviation from normal product specifications.F

149

zone price

A standard product price which applies to all geographic locations within a zone.Z

150

pre-deduct inventory transaction processing

A method of inventory bookkeeping where the book (computer) inventory of components is reduced before issue, at the time a scheduled receipt for their parents or assemblies is created via a bill-of-material explosion. This approach has the disadvantage of a built-in differential between the book record and what is physically in stock. See: backflush.P

151

VOI

Abbreviation for vendor-owned inventory.V

152

interest rate

The ratio of the interest payment to the principal for a given unit of time. It is usually expressed as a percentage of the principal.I

153

cost center

The smallest segment of an organization for which costs are collected and formally reported, typically a department. The criteria in defining cost centers are that the cost be significant and that the area of responsibility be clearly defined. A cost center is not necessarily identical to a work center; normally, a cost center encompasses more than one work center, but this may not always be the case.C

154

physical inventory

1) The actual inventory itself. 2) The determination of inventory quantity by actual count. Physical inventories can be taken on a continuous, periodic, or annual basis. Syn: annual inventory count, annual physical inventory. See: periodic inventory.P

155

MBO

Abbreviation for management by objectives.M

156

total lead time

Syn: lead time.T

157

indirect labor

Work required to support production in general without being related to a specific product (e.g., floor sweeping).I

158

accounting

The function of maintaining, analyzing, and explaining the financial records and status of an organization.A

159

bucketless system

An MRP, DRP, or other time-phased system in which all time-phased data are processed, stored, and usually displayed using dated records rather than defined time periods (buckets).B

160

bit

Acronym for binary digit. It can have only the values 0 or 1.B

161

systems rollup

Integrating computer systems; this enables faster data retrieval and better information system responsiveness.S

162

run standards

Syn: run time.R

163

summary judgment

A judicial ruling that no essential facts are in dispute and that one party to the suit merits judgment as a matter of law.S

164

fixed-period requirements

A lot-sizing technique that sets the order quantity to the demand for a given number of periods. See: discrete order quantity.F

165

triple smoothing

A method of exponential smoothing that accounts for accelerating or decelerating trends, such as would be experienced in a fad cycle. Syn: thirdorder smoothing.T

166

annuity

A stream of fixed payments for a stipulated time, yearly or at other intervals.A

167

law of variability

The more that variability exists in a process, the less productive that process will be.L

168

LF

Abbreviation for late finish date.L

169

earned hours

A statement reflecting the standard hour assigned for actual production reported during the period. Syn: earned volume.E

170

overissue

Syn: excess issue.O

171

work breakdown structure

In project management, a hierarchical description of a project in which each lower level is more detailed. See: project summary work breakdown structure.W

172

common carrier

Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. A common carrier must obtain a certificate of public convenience and necessity from the Federal Trade Commission for interstate traffic. Ant: private carrier.C

173

LIMIT

Acronym for lot-size inventory management interpolation technique.L

174

service function

A mathematical relationship of the safety factor to service level (i.e., the fraction of demand routinely met from stock).S

175

delivery cycle

Syn: delivery lead time.D

176

expansion

Any increase in the capacity of a plant, facility, or unit, usually by added investment. The scope of this increase extends from the elimination of problem areas to the complete replacement of an existing facility with a larger one.E

177

cycle reduction stock

Stock held to reduce delivery time.C

178

SQL

Abbreviation for structured query language.S

179

total value analysis

A method of economic analysis in which a model expresses the dependent variable of interest as a function of independent variables, some of which are controllable.T

180

project management

The use of skills and knowledge in coordinating the organizing, planning, scheduling, directing, controlling, monitoring, and evaluating of prescribed activities to ensure that the stated objectives of a project, manufactured good, or service are achieved. See: project.P

181

order processing and communication

All activities needed to fill customer orders.O

182

sole proprietorship

A form of business in which one person has ownership and control. See: corporation, partnership.S

183

vendor measurement

The act of measuring the vendor’s performance to a contract. Measurements usually cover delivery reliability, lead time, quality, and price. See: supplier measurement.V

184

embezzlement

The fraudulent taking of another’s property while acting in a fiduciary capacity.E

185

repetitive manufacturing

The repeated production of the same discrete products or families of products. Repetitive methodology minimizes setups, inventory, and manufacturing lead times by using production lines, assembly lines, or cells. Work orders are no longer necessary; production scheduling and control are based on production rates. Products may be standard or assembled from modules. Repetitive is not a function of speed or volume. Syn: repetitive process, repetitive production. See: project manufacturing.R

186

vision

The shared perception of the organization’s future what the organization will achieve and a supporting philosophy. This shared vision must be supported by strategic objectives, strategies, and action plans to move it in the desired direction. See: vision statement.V

187

value

The worth of an item, good, or service.V

188

part family

A collection of parts grouped for some managerial purpose.P

189

hedge

1) An action taken in an attempt to shield the company from an uncertain event such as a strike, price increase, or currency reevaluation. 2) In master scheduling, a scheduled quantity to protect against uncertainty in demand or supply. The hedge is similar to safety stock, except that a hedge has the dimension of timing as well as amount. A volume hedge or market hedge is carried at the master schedule or production plan level. The master scheduler plans excess quantities over and above the demand quantities in given periods beyond some time fence such that, if the hedge is not needed, it can be rolled forward before major resources must be committed to produce the hedge and put it in inventory. A product mix hedge is an approach where several interrelated optional items are overplanned. Sometimes, using a planning bill, the sum of the percent mix can exceed 100 percent by a defined amount, thus triggering additional hedge planning. 3) In purchasing, any purchase or sale transaction having as its purpose the elimination of the negative aspects of price fluctuations. See: market hedge, option overplanning, planning bill of material, safety stock, time fence, two-level master.H

190

flow manufacturing

Syn: flow shop.F

191

logical relationship

In project management, a dependency between two activities or between a milestone and an activity. The four possible relationships are (1)

192

material requirements planning (MRP)

A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase. Time-phased MRP begins with the items listed on the MPS and determines (1) the quantity of all components and materials required to fabricate those items and (2) the date that the components and material are required. Time-phased MRP is accomplished by exploding the bill of material, adjusting for inventory quantities on hand or on order, and offsetting the net requirements by the appropriate lead times.M

193

late start date (LS)

In the critical path method of project management, the last date upon which a given activity can be started without delaying the completion date of the project.L

194

Global Reporting Initiative (GRI)

A network-based organization that pioneered the world's most widely used sustainability reporting framework.G Global Reporting Initiative (GRI) Reporting Framework The framework that sets out the principles and perforglobal G mance indicators organizations can use to measure and report their human rights, labor, environment, and anticorruption practices and outcomes.G

195

contingency reserve

A budget of money or time allowed over an initial estimate to reduce the likelihood of overruns.C

196

touches

A statistic that is used to determine efficiency for costing/pricing functions. A touch is anytime that a labor activity is utilized during the manufacturing or service creation process. This brought about the term “touch labor” for direct labor personnel.T

197

customer defection analysis

Analyzing the customers who have stopped buying to determine why.C

198

standard batch quantity (SBQ)

The quantity of a parent that is used as the basis for specifying the material requirements for production. The quantity per is expressed as the quantity to make the SBQ, not to make only one of the parent. Often used by manufacturers that use some components in standard quantities or by process-related manufacturers. Syn: run size.S

199

diseconomies of scale

Occurs when more outputs are required than the efficient quantity that the facility is designed to produce; this causes an increase in unit cost.D

200

earliest start date

The earliest date an operation or order can start. It may be restricted by the current date, material availability, or management-specified “maximum advance.”E

201

electronic communities

Communities of people who communicate exclusively electronically.E

202

offsetting

Syn: lead-time offset.O

203

uniform plant loading

In lean, the distribution of work between work stations so that the time required for each station to complete all tasks is as close to equal as possible. See: line balancing.U

204

relevant range

The range of activity planned for a firm.R

205

raw materials inventory

Inventory of material that has not undergone processing at a facility.R

206

short-range planning horizon

A planning/forecasting time frame encompassing a few days to at most a few weeks.S

207

service parts

Those modules, components, and elements that are planned to be used without modification to replace an original part. Syn: repair parts, spare parts.S

208

indifference point

The point at which two options create the same costs for a specific output level.I

209

nonexempt positions

Employees not meeting the test of executive, supervisory, or administrative personnel who are paid overtime, as defined by the Fair Labor Standards Act. See: nonexempt employee.N

210

FAQs

Abbreviation for frequently asked questions.F F

211

process steps

The operations or stages within the manufacturing cycle required to transform components into intermediates or finished goods. From a larger perspective, the operations or stages within any business required to turn inputs into outputs.P

212

component

The raw material, part, or subassembly that goes into a higher level assembly, compound, or other item. This term may also include packaging materials for finished items. See: ingredient, intermediate part.C

213

operation start date

The date when an operation should be started so that its order due date can be met. It can be calculated based on scheduled quantities and lead times or on the work remaining and the time remaining to complete the job.O

214

transient bill of material

Syn: phantom bill of material.T

215

invitation for bid (IFB)

Syn: request for proposal.I

216

nominal interest rate

The noninflation-adjusted interest rate.N

217

lot-for-lot

A lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period. See: discrete order quantity.L

218

profit sharing

A plan by which employees receive compensation, above their normal wages, based on company profitability. The purpose is to motivate employees and recognize their efforts.P

219

quality characteristic

A property of a product or service that is important enough to count or measure. See: performance measurement system.Q

220

average fixed cost

The total fixed cost divided by units produced. This value declines as output increases.A

221

production scheduling

The process of developing the production schedule.P

222

break-bulk

Dividing truckloads of homogeneous items into smaller, more appropriate quantities for use.B

223

variable yield

The condition that occurs when the output of a process is not consistently repeatable either in quantity, quality, or combinations of these.V

224

cumulative yield

Syn: cascading yield loss, composite yield.C

225

stock record card

A ledger card that contains inventory status for a given item.S

226

CAPP

Acronym for computer-aided process planning.C

227

policies

Definitive statements of what should be done in the business.P

228

setup flexibility

The ability for a change to a different product to be made with little delay.S

229

low-cost-provider strategy

A strategy of offering the lowest prices in the market to gain share and increase sales volume in industries composed by numerous players offering the same type of products.L

230

continuous flow distribution

A pull system diverting products in response to customer requirements while keeping distribution costs low.C

231

quality control circle

Syn: quality circle.Q

232

profit ratio

Profit divided by sales.P

233

system nervousness

See: nervousness.S

234

operating efficiency

A ratio (represented as a percentage) of the actual output of a piece of equipment, department, or plant as compared to the planned or standard output.O

235

closely held

A description of an organization owned by a small number of people.C

236

closeness ratings

In layout analysis, to begin yielding. In layout analysis, measures of how beneficial it would be for one department to be located near another.C

237

relational database

A software program that allows users to obtain information drawn from two or more datarelationship R bases that are made up of two-dimensional arrays of data.R

238

material safety data sheet (MSDS)

A document that is part of the materials information system and accompanies the product. Prepared by the manufacturer, the MSDS provides information regarding the safety and chemical properties and (if necessary) the long-term storage, handling, and disposal of the product. Among other factors, the MSDS describes the hazardous components of a product; how to treat leaks, spills, and fires; and how to treat improper human contact with the product.M

239

performance efficiency

A ratio, usually expressed as a percentage, of the standard processing time for a part divided by its actual processing time. Setups are excluded from this calculation to prevent distortion. A traditional definition includes setup time as part of operation time, but significant distortions can occur as a result of dependent setups.P

240

scheduling rules

Basic rules that can be used consistently in a scheduling system. Scheduling rules usually specify the amount of time to allow for a move, queue, load calculation, and so forth. Syn: scheduling algorithm.S

241

distributor

A business that does not manufacture its own products, but purchases and resells these products. Such a business usually maintains a finished goods inventory. Syn: wholesaler.D

242

supervisor estimate

An estimate, made by a knowledgeable manager, of the labor required for an operation.S

243

shitsuke

The effort and discipline required to continually enforce changes made in an organization. See: five Ss.S S

244

alternate feedstock

A backup supply of an item that either acts as a substitute or is used with alternate equipment.A

245

post-transaction elements

Customer services that are provided after a product or service is sold, including warranties, returns, and complaint resolution.P

246

FEU

An abbreviation for forty-foot equivalent unit.F

247

cycle service level

The probability of not having a stockout in any one ordering cycle, which begins at the time an order is placed and ends when the goods are placed in stock. Syn: measure of service, service level.C

248

machine loading

The accumulation by workstation, machine, or machine group of the hours generated from the scheduling of operations for released orders by time period. Machine loading differs from capacity requirements planning in that it does not use the planned orders from MRP but operates solely from released orders. It may be of limited value because of its limited visibility of resources.M

249

internal environment

The chosen domain or scope of activities within which an organization operates, for example, the tasks associated with goods or services to be delivered by the organization. See: external environment, organizational environment.I

250

funds flow statement

A financial statement showing the flow of cash and its timing into and out of an organization or project. Syn: cash flow statement, statement of cash flows.F

251

expected demand

The quantity expected to be consumed during a given time period when usage is at the forecast rate. See: demand during lead time.E

252

customer profitability

Estimating the profit retained on business with a specific customer.C

253

safety lead time

An element of time added to normal lead time to protect against fluctuations in lead time so that an order can be completed before its real need date. When used, the MRP system, in offsetting for lead time, will plan both order release and order completion for earlier dates than it would otherwise. Syn: protection time, safety time.S

254

finished products inventory

Syn: finished goods inventory.F

255

supplier development

Technical and financial assistance given to existing and potential suppliers to improve quality and/or due date/performance.S

256

parts planner

Syn: material planner.P

257

line manager

A manager involved in managing a department that is directly involved in making a product.L

258

international logistics

All functions concerned with the movement of materials and finished goods on a global scale.I International Organization for Standardization (ISO) Group of cooperating institutes from 155 countries working to develop and publish international standards. It acts as a bridge between public and private sectors.I

259

additives

A special class of ingredients characterized either by being used in minimal quantities or by being introduced into the processing cycle after the initial stage.A

260

tree diagram

1) A management technique used to analyze a situation in increasing detail. The full range of tasks to be accomplished to achieve a primary goal and supporting subgoal may be illustrated. 2) In the theory of constraints, a diagram relating effects to underlying causes. See: current reality tree, future reality tree.T

261

diagnostic study

A brief investigation or cursory methods study of an operation, process, group, or individual to discover causes of operational difficulties or problems for which more detailed remedial studies may be feasible. An appropriate work measurement technique may be used to evaluate alternatives or to locate major areas requiring improvement.D

262

wall-to-wall inventory

An inventory management technique in which material enters a plant and is processed through the plant into finished goods without ever having entered a formal stock area. Syn: four-wall inventory.W W

263

partnership

1) A form of business ownership that is not organized as a separate legal entity (i.e., unincorporated business), but entailing ownership by two or more persons. See: corporation, private ownership, public ownership, sole proprietorship. 2) In a supply chain, a relationship based on trust, shared risk, and rewards aimed toward achieving a competitive advantage.P

264

supply chain design

The determination of how to structure a supply chain. Design decisions include the selection of partners, the location and capacity of warehouse and production facilities, the products, the modes of transportation, and supporting information systems.S

265

average outgoing quality limit (AOQL)

The maximum average outgoing quality over all possible levels of incoming quality for a given acceptance sampling plan and disposal specification.A

266

total make cycle time

Average cumulative processing time between a part entering a manufacturing system and completion of manufacturing activities (not including packaging).T

267

machine utilization

A measure of how intensively a machine is being used. Machine utilization compares the actual machine time (setup and run time) to available time.M

268

chargeback provisions

Contractual terms specifying how a company may charge a supplier for failure to perform.C

269

simple interest

1) Interest that is not compounded (i.e., interest not added to the income-producing investment or loan). 2) The interest charged under the condition that interest in any time period is only charged on the principal.S

270

single-level backflush

A form of backflush that reduces inventory of only the parts used in the next level down in an assembly or subassembly.S

271

principal

The party authorizing an agent to act on his or her behalf.P

272

time-to-market

The total time required to design, build, and deliver a product (timed from concept to delivery). See: procurement lead time.T

273

past due order

A line item on an open customer order that has an original scheduled ship date that is earlier than the current date. Syn: delinquent order, late order, order backlog. See: backlog.P

274

level production schedule

Syn: level schedule.L

275

problem-solving storyboard

A technique based on the plan/do/check/action problem-solving process. The steps being taken and the progress toward the resolution of a problem are continuously planned and updated.P

276

OJT

Abbreviation for on-the-job training.O

277

freight equalization

The practice by more distant suppliers of absorbing the additional freight charges to match the freight charges of a supplier geographically closer to the customer. This is done to eliminate the competitive advantage of lower freight charges that the nearest supplier has.F

278

closed period

The accounting time period for which the adjusting and closing entries have been posted. Ant: open period.C

279

critical success factor

One of a few organizational objectives whose achievement should be sufficient for organizational success.C

280

beta distribution

A type of probability distribution often used to model activity times.B

281

forecast period

Syn: forecast interval.F

282

network planning

A generic term for techniques that are used to plan complex projects. Two of the best known network planning techniques are the critical path method (CPM) and the program evaluation and review technique (PERT).N

283

manufacturing authorization

Syn: manufacturing order.M

284

stock code

Syn: item number.S

285

AOQL

1) Abbreviation for average outgoing quality limit. 2) Abbreviation for acceptable outgoing quality level.A

286

double order point system

A distribution inventory management system that has two order points. The smallest equals the original order point, which covers demand during replenishment lead time. The second order point is the sum of the first order point plus normal usage during manufacturing lead time. It enables warehouses to forewarn manufacturing of future replenishment orders.D

287

custom service

A service that is created to meet the requirements of specific customers.C

288

production environment

Syn: manufacturing environment.P

289

VATI Analysis

In the theory of constraints, a procedure for determining the general flow of parts and products from raw materials to finished products (logical product structure). A V logical structure starts with one or a few raw materials, and the product expands into a number of different products as it flows through divergent points in its routings. The shape of an A logical structure is dominated by converging points. Many raw materials are fabricated and assembled into a few finished products. A T logical structure consists of numerous similar finished products assembled from common assemblies, subassemblies, and parts. An I logical structure is the simplest of production flows, where resources are shared between different products and the flow is in a straight line sequence, such as an assembly line. Once the general parts flow is determined, the system control points (gating operations, convergent points, divergent points, constraints, and shipping points) can be identified and managed.V

290

manufacturing execution systems (MES)

Programs and systems that participate in shop floor control, including programmed logic controllers and process control computers for direct and supervisory control of manufacturing equipment; process information systems that gather historical performance information, then generate reports; graphical displays; and alarms that inform operations personnel what is going on in the plant currently and a very short history into the past. Quality control information is also gathered and a laboratory information management system may be part of this configuration to tie process conditions to the quality data that are generated. Thereby, cause-and-effect relationships can be determined. The quality data at times affect the control parameters that are used to meet product specifications either dynamically or off line.M

291

profitability ratio

An indicator of whether or not a company is generating profits at an acceptable rate. It includes such measurements as return on total assets, return on equity, and profit margin.P

292

balance-of-stores record

A double-entry record system that shows the balance of inventory items on hand and the balances of items on order and available for future orders. Where a reserve system of materials control is used, the balance of material on reserve is also shown.B

293

SMART

Abbreviation for simple, measurable, achievable, reasonable, and trackable.S

294

repair order

Syn: rework order.R

295

logbook

A daily record kept by an interstate driver of driving and duty-related and non-duty-related activities.L

296

quality

Conformance to requirements or fitness for use. Quality can be defined through five principal approaches: (1) Transcendent quality is an ideal, a condition of excellence. (2) Product-based quality is based on a product attribute. (3) User-based quality is fitness for use. (4) Manufacturing-based quality is conformance to requirements. (5) Value-based quality is the degree of excellence at an acceptable price. Also, quality has two

297

explosion level

Syn: low-level code.E

298

distribution of forecast errors

Tabulation of the forecast errors according to the frequency of occurrence of each error value. The errors in forecasting are, in many cases, normally distributed even when the observed data do not come from a normal distribution.D

299

payback period

The period of time required for a stream of cash flows resulting from a project to equal the project’s initial investment.P

300

distribution

1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Syn: physical distribution. 2) The systematic division of a whole into discrete parts having distinctive characteristics.D

301

political environment

External factors related to the political process, including laws and regulations, taxation codes, and others, at the local, state, federal, and international levels of government.P

302

order-up-to level

Syn: target inventory level.O

303

time series analysis

Analysis of any variable classified by time in which the values of the variable are functions of the time periods. Time series analysis is used in forecasting. A time series consists of seasonal, cyclical, trend, and random components. See: cyclical component, random component, seasonal component, trend component.T

304

yokoten

A Japanese word meaning sharing information.Y Z

305

time-based order system

Syn: fixed reorder cycle inventory model.T T

306

joint rate

A rate for a route involving two or more carriers to move a shipment.J

307

B can start; (2) finish-to-finish

activity A must be finished before activity B can finish; (3) start-to-start activity A must start before activity B can start; and (4)

308

performance measurement system

A system for collecting, measuring, and comparing a measure to a standard for a specific criterion for an operation, item, good, service, business, etc. A performance measurement system consists of a criterion, a standard, and a measure. Syn: metrics. See: performance criterion, performance measure, performance standard.P

309

partnering

The act of one organization committing to a long-term relationship with another organization based on trust and a shared concept of how to satisfy the customer.P

310

trading partner agreement

A contract between trading partners that describes all facets of their business together. This is a legal and binding agreement suitable for legal purposes as well as standard working agreements.T

311

input/output devices

Modems, terminals, or various pieces of equipment whose designed purpose relates to manual, mechanical, electronic, visual, or audio entry to and from the computer’s processing unit.I

312

hedge inventory

A form of inventory buildup to buffer against some event that may not happen. Hedge inventory planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company’s strategic initiatives. Risk and consequences are unusually high, and top management approval is often required.H

313

decision table

A means of displaying logical conditions in an array that graphically illustrates actions associated with stated conditions.D

314

point-of-use delivery

Direct delivery of material to a specified location on a plant floor near the operation where it is to be used.P

315

exception message

Syn: action message.E

316

rapid prototyping

1) The transformation of product designs into physical prototypes. Rapid prototyping relies on techniques such as cross-functional teams, data sharing, and advanced computer and communication technology (e.g., CAD, CAM, stereolithography, data links). Rapid prototyping involves producing the prototype on production equipment as often as possible. It improves product development times and allows for cheaper and faster product testing, assessment of the ease of assembly and costs, and validation before actual production tooling. 2) The transformation of system designs into computer system prototypes with which the users can experiment to determine the adequacy of the design to address their needs. See: 3D printing.R

317

blocking

The condition requiring a work center that has parts to process to remain idle as long as the queue to which the parts would be sent is full or kanbans authorizing production are not present.B

318

process

1) A planned series of actions or operations (e.g., mechanical, electrical, chemical, inspection, test) that advances a material or procedure from one stage of completion to another. 2) A planned and controlled treatment that subjects materials or procedures to the influence of one or more types of energy (e.g., human, mechanical, electrical, chemical, thermal) for the time required to bring about the desired reactions or results.P

319

mental model

A paradigm of how the world works formed by a person’s experiences and assumptions.M

320

common cause variability

The variability in product quality that results from numerous uncontrollable everyday factors, such as temperature, humidity, and tool wear. Syn: common variation. See: common causes.C

321

concurrent engineering

Syn: participative design/ engineering. C

322

asset value

The adjusted purchase price of the asset plus any costs necessary to prepare the asset for use.A

323

inventory management

The branch of business management concerned with planning and controlling inventories.I

324

volume flexibility

The ability of the transformation process to quickly accommodate large variations in production levels.V

325

lot control

A set of procedures (e.g., assigning unique batch numbers and tracking each batch) used to maintain lot integrity from raw materials, from the supplier through manufacturing to consumers.L

326

digital cash or money

An electronic currency equivalent of currency or coins.D

327

price to earnings (PE) ratio

The current price of a stock relative to its earnings per share.P

328

dispatching rule

The logic used to assign priorities to jobs at a work center.D

329

chase strategy

Syn: chase production method.C

330

bookings

The value of all sales after discounts and rebates have been applied.B

331

best practices

In benchmarking, the measurement or performance standard by which similar items are evaluated. Defining a best practice identifies opportunities to improve effectiveness. The process of comparing an actual result to a best practice may be applied to resources, activities, or cost objects.B

332

operating exposure

The risk introduced by flexible exchange rates when operating in the global environment, including production, storage, and buying and selling prices.O

333

order entry complete to start manufacture

The average time starting when an order is placed by a customer and ending when the manufacturing of that order is completed.O

334

hurdle rate

The minimum acceptable rate of return on a project.H

335

linear production

Actual production to a level schedule, so that a plotting of actual output versus planned output forms a straight line, even when plotted for a short segment of time.L

336

risk register

A report that has summary information on qualitative risk analysis, quantitative risk analysis, and risk response planning. This register contains all identified risks and associated details.R

337

pacing process

The process in a production line used to signal all other processes in line of the time to produce another unit. It generally is the final process, but it does not have to be.P

338

pegged requirement

A requirement that shows the next-level parent item (or customer order) as the source of the demand.P

339

line of credit

A contract that enables a company to borrow funds at any time up to a predetermined limit.L

340

bucketed system

An MRP, DRP, or other time-phased system in which all time-phased data are accumulated into time periods called buckets. If the period of accumulation is one week, then the system is said to have weekly buckets.B

341

job description

A formal statement of duties, qualifications, and responsibilities associated with a particular job.J

342

response time

The elapse of time or average delay between the initiation of a transaction and the results of the transaction.R

343

refurbished goods

Syn: remanufactured parts.R

344

event

An event is an identifiable point in time among a set of related activities. Graphically, an event can be represented by two approaches: (1) in activity-on-node networks, it is represented by a node; (2) in activity-onarrow networks, the event is represented by the arrow.E

345

quality score chart

Syn: Q chart.Q

346

define-measure-analyze-improve-control (DMAIC)

The sequence of steps for improvement projects within sixsigma quality control.D define, measure, analyze, improve, control (DMAIC)

347

non-value-added

An activity that does not add value to a product, for example, moving the product from one work center to another inside a facility. One aspect of continuous improvement is the elimination or reduction of non-value-added activities.N

348

collaborative supply relationship

Syn: supplier partnership.C

349

voluntary layoff

Layoffs where the employees are given the option of taking a non-paid leave from their work for a short, specified period of time.V

350

causal forecast

A type of forecasting that uses causeand- effect associations to predict and explain relationships between the independent and dependent variables. An example of a causal model is an econometric model used to explain the demand for housing starts based on consumer base, interest rates, personal incomes, and land availability.C

351

program management

The activities involved in the realization of a product or service offered to customers. The responsibilities include planning, directing, and controlling one or more projects of a new or continuing nature; initiating any acquisition processes necessary to get the project work under way; and monitoring performance. See: program manager.P

352

simultaneous design/engineering

Syn: participative design/engineering.S

353

exponential distribution

A continuous probability distribution where the probability of occurrence either steadily increases or decreases. The steady increase case (positive exponential distribution) is used to model phenomena such as customer service level versus cost. The steady decrease case (negative exponential distribution) is used to model phenomena such as the weight given to any one time period of demand in exponential smoothing.E

354

macro environment

The environment external to a business including technological, economic, natural, and regulatory forces that marketing efforts cannot control.M

355

description by brand

A method to identify a product or service required; requesting by brand usually means the product or service provides some advantage over other brands.D

356

marquis partners

Key strategic relationships. By partnering with big players, via equity offerings if necessary, a company creates barriers to entry into supply chain relationships for competitors.M

357

registration to standards

A process in which an accredited, independent third-party organization conducts an on-site audit of a company’s operations against the requirements of the standard to which the company wants to be registered. Upon successful completion of the audit, the company receives a certificate indicating that it has met the standard requirements.R

358

line balancing

1) The balancing of the assignment of the tasks to workstations in a manner that minimizes the number of workstations and minimizes the total amount of idle time at all stations for a given output level. In balancing these tasks, the specified time requirement per unit of product for each task and its sequential relationship with the other tasks must be considered. See: uniform plant loading. 2) A technique for determining the product mix that can be run down an assembly line to provide a fairly consistent flow of work through that assembly line at the planned line rate.L

359

transfer batch

The quantity of an item moved between sequential work centers during production. See: batch, overlap quantity.T

360

SQC

Abbreviation for statistical quality control.S

361

marginal cost

The incremental costs incurred when the level of output of some operation or process is increased by one unit.M

362

interest

1) Financial share in a project or enterprise. 2) Periodic compensation for lending money. 3) In an economy study, synonymous with required return, expected profit, or charge for the use of capital. 4) The cost for the use of capital. Sometimes referred to as the time value of money.I

363

additive manufacturing

Syn: 3D printing.A

364

repetitive production

Syn: repetitive manufacturing.R

365

bin location file

A file that specifically identifies the location where each item in inventory is stored.B

366

break-even point

The level of production or the volume of sales at which operations are neither profitable nor unprofitable. The break-even point is the intersection of the total revenue and total cost curves. See: total cost curve.B

367

ESI

Abbreviation for early supplier involvement.E

368

strategic benchmarking

Benchmarking how others compete. It often involves benchmarking across industries. See: benchmarking.S

369

index

A value, expressed as a percentage, giving the relationship of a measurement to a base value. A result of 100 would be average while numbers greater than 100 would be above average and those less than 100 would be below average.I

370

control number

Typically, the manufacturing order or schedule number used to identify a specific instance or period of production.C

371

product line

A group of products whose similarity in manufacturing procedures, marketing characteristics, or specifications enables them to be aggregated for planning; marketing; or, occasionally, costing. Syn: product family, product group.P

372

residence time

Syn: process time.R

373

nominal trading partner

Any organization external to the firm that provides an essential material or service, but whose financial success is largely independent of the financial success of the supply chain community.N

374

computer-aided inspection and test (CAIT)

The use of computer technology in the inspection and testing of manufactured products.C

375

knowledge creation

The propensity for generating knowledge.K

376

linear programming

Mathematical models for solving linear optimization problems through minimization or maximization of a linear function subject to linear constraints. For example, in blending gasoline and other petroleum products, many intermediate distillates may be available. Prices and octane ratings as well as upper limits on capacities of input materials that can be used to produce various grades of fuel are given. The problem is to blend the various inputs in such a way that (1) cost will be minimized (profit will be maximized), (2) specified optimum octane ratings will be met, and (3) the need for additional storage capacity will be avoided.L

377

service positioning

Syn: product positioning.S

378

design simplification

A process of reducing the number of pieces in a product or machine, eliminating features that are seldom needed, and eliminating steps in the production process.D

379

technical/office protocol (TOP)

An application-specific protocol based on open systems interconnection (OSI) standards. It is designed to allow communication between computers from different suppliers in the technical development and office environments.T

380

abnormal demand

Demand in any period that is outside the limits established by management policy. This demand may come from a new customer or from existing customers whose own demand is increasing or decreasing. Care must be taken in evaluating the nature of the demand: is it a volume change; is it a change in product mix; or is it related to the timing of the order? See: outlier.A

381

good

A tangible product, merchandise, or ware.G

382

associative forecasting

Uses one or more variables that are believed to affect demand in order to forecast future demand.A

383

world-class quality

A term used to indicate a standard of excellence: the best of the best.W

384

(LIMIT)

A technique for looking at the lot sizes for groups of similar products to determine the effect economic lot sizes will have on the total inventory, total setup costs, and machine availability.L

385

inventory control

The activities and techniques of maintaining the desired levels of items, whether raw materials, work in process, or finished products. Syn: material control.I

386

dampeners

User-input parameters to suppress the reporting of insignificant or unimportant action messages.D

387

mix forecast

Forecast of the proportion of products that will be sold within a given product family, or the proportion of options offered within a product line. Product and option mix as well as aggregate product families must be forecasted. Even though the appropriate level of units is forecasted for a given product line, an inaccurate mix forecast can create material shortages and inventory problems.M

388

man-hour

A unit of measure representing one person working for one hour. The combination of “n” people working for “h” hours produces nh man-hours. Frequent qualifications to the definition include (1) designation of work effort as normal effort; (2) designation of time spent as actual hours.M

389

item master file

A file containing all item master records for a product, product line, plant, or company. See: master file.I

390

progressive operations

Passing work from station to station.P

391

bill of batches

A method of tracking the specific multilevel batch composition of a manufactured item. The bill of batches provides the necessary where-used and where-from relationships required for lot traceability.B

392

terminal value

The value of an operation or entity at the end of the period considered.T

393

mix flexibility

The ability to handle a wide range of products or variants by using equipment that has short setup times.M

394

continuous review system

The inventory level on-hand and on-order for this system is checked whenever a change in inventory level occurs and when the reorder point is reached a restocking order is released. See: fixed reorder cycle inventory model.C

395

environmentally sensitive engineering

Designing with consideration of how a product or its packaging will ultimately be disposed.E

396

planning values

Values that decision makers use to translate the sales forecast into resource requirements to determine the feasibility and costs of alternative approaches.P

397

remanufacturing resource planning

A manufacturing resource planning system designed for remanufacturing facilities.R

398

gap analysis

A tool designed to assess the distance that exists between a service that is offered and customer expectations.G G

399

piggyback

Syn: trailer on a flatcar.P

400

job sequencing rules

A set of priorities and conditions that specify the order in which jobs are processed because of scarce resources.J

401

universality

The strategy of designing a product initially intended for one market in such a way that it can also be sold in other markets. It is a form of standardization.U

402

design changeover flexibility

The capability of the existing production system to accommodate and introduce a large variety of major design changes quickly.D

403

Shewhart circle of quality

Syn: plan-do-check-action.S

404

projected available balance

An inventory balance projected into the future. It is the running sum of on-hand inventory minus requirements plus scheduled receipts and planned orders. Syn: projected available inventory.P

405

leveraging purchase volume

Buying in large quantities to take advantage of volume price or shipping discounts.L

406

time value of money

1) The cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent invested funds. See: future worth, present value. 2) The interest rate that capital is expected to earn.T

407

capacity control

The process of measuring production output and comparing it with the capacity plan, determining if the variance exceeds pre-established limits, and taking corrective action to get back on plan if the limits are exceeded. See: input/output control.C

408

idle capacity

The available capacity that exists on nonconstraint resources beyond the capacity required to support the constraint. Idle capacity has two components: protective capacity and excess capacity.I

409

core competencies

Bundles of skills or knowledge sets that enable a firm to provide the greatest level of value to its customers in a way that is difficult for competitors to emulate and that provides for future growth. Core competencies are embodied in the skills of the workers and in the organization. They are developed through collective learning, communication, and commitment to work across levels and functions in the organization and with the customers and suppliers. For example, a core competency could be the capability of a firm to coordinate and harmonize diverse production skills and multiple technologies. To illustrate, advanced casting processes for making steel require the integration of machine design with sophisticated sensors to track temperature and speed, and the sensors require mathematical modeling of heat transfer. For rapid and effective development of such a process, materials scientists must work closely with machine designers, software engineers, process specialists, and operating personnel. Core competencies are not directly related to the product or market.C

410

instantaneous receipt

The receipt of an entire lot-size quantity in a very short period of time.I

411

four Ps

A set of marketing tools to direct the business offering to the customer. The four Ps are product, price, place, and promotion.F

412

publicly traded corporation

A corporation whose stock is available on a national exchange.P

413

product/service hierarchy

In sales and operations planning, a general approach to dividing products or services into families, brands, and subfamilies for various planning levels. This ensures that a correct topdown or bottom-up approach is taken to grouping (or aggregating) demand at each subsequent level. Forecasts are more accurate the higher up the product hierarchy they are developed; consequently, forecasts should usually be driven down from the top.P

414

outsourced cost of goods sold

Costs of goods sold that are not created within the producing company’s manufacturing process. Instead, they are outsourced to another company and include the costs of purchasing the service from another company.O

415

TRR

Abbreviation for time to reliably replenish.T

416

B2C

Abbreviation for business-to-consumer sales.B

417

public warehouse

The warehouse space that is rented or leased by an independent business providing a variety of services for a fee or on a contract basis.P

418

database management system (DBMS)

The software designed for organizing data and providing the mechanism for storing, maintaining, and retrieving that data on a physical medium (i.e., a database). A DBMS separates data from the application programs and people who use the data and permits many different views of the data.D

419

return to supplier

Material that has been rejected by the buyer’s inspection department and is awaiting shipment back to the supplier for repair or replacement.R

420

visual review system

A simple inventory control system where the inventory reordering is based on actually looking at the amount of inventory on hand. Usually used for low-value items, such as nuts and bolts. See: two-bin inventory system.V

421

mix

A breakdown of the total demand or production that identifies different products in an aggregate demand or production run.M

422

level-demand strategy

A strategy of keeping capacity level and not variable with demand.L

423

sawtooth diagram

A quantity-versus-time graphic representation of the order point/order quantity inventory system showing inventory being received and then used up and reordered.S

424

activity sequencing

The process of defining and documenting dependencies among project activities.A

425

WMS

Abbreviation for warehouse management system.W

426

transactions

Individual events reported to the system (e.g., issues, receipts, transfers, adjustments).T

427

DSD

Abbreviation for direct store delivery.D

428

robustness

The condition of a product or process design that remains relatively stable with a minimum of variation even though factors that influence operations or usage, such as environment and wear, are constantly changing.R

429

anti-dumping duty

An imposed responsibility in which a company sells imported goods at prices below what is charged in their domestic market.A

430

LAN

Acronym for local area network.L

431

functional strategy

A strategy that is built from the business strategy for the various business functions, such as finance, marketing, and production. See: strategic planning.F

432

path divergence

Having parallel network paths exiting from a single node.P

433

valid schedule

A detailed, feasible calendar of specific items flowing into and through a factory.V

434

automated clearinghouse

A U.S. nationwide system for electronic payments preferred by a myriad of banks, consumers, and corporations. This system can carry payment information in a standardized, computer accessible format.A

435

Interstate Commerce Commission (ICC)

A U.S. regulatory agency charged with enforcing regulations controlling railroads, motor carriers, pipelines, domestic water carriers, domestic surface freight forwarders, and brokers.I

436

job enrichment

An increase in the number of tasks that an employee performs and an increase in the control over those tasks. It is associated with the design of jobs and especially the production worker’s job. Job enrichment is an extension of job enlargement.J

437

stop work order

Syn: hold order.S

438

local measures

The set of measurements that relates to a resource, operation, process, or part and usually has low correlation to global organization measures. Examples are errors per printed page, departmental efficiency, and volume discounts.L

439

systems network

A group of interconnected nodes. This implies redundancy in connections and some means (e.g., machines) for implementing the connection.S

440

Malcolm Baldrige National Quality Award (MB QA)

An award established by Congress in 1987 to raise awareness of quality management and to recognize U.S. companies that have implemented successful quality management systems. Up to four awards may be given annually in each of three categories: manufacturing company, service company, and small business. The award is named after the late Secretary of Commerce, Malcolm Baldrige, a proponent of quality management. The U.S. Commerce Department’s National Institute of Standards and Technology manages the award, and the American Society for Quality (ASQ) administers it. Syn: Baldrige Award.M

441

step-function scheduling

Scheduling logic that recognizes run length to be a multiple of the number of batches to be run rather than simply a linear relationship of run time to total production quantity.S

442

assignor

One who sells contract rights to a third person.A

443

project network

A diagram showing the technological relationships among activities in a project.P

444

batch picking

A method of picking orders in which order requirements are aggregated by product across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed. See: discrete order picking, order picking, zone picking.B

445

inventory conversion period

The time period needed to produce and sell a product, measured from procurement of raw materials to the sale of the product.I

446

manufacturing process

The series of operations performed upon material to convert it from the raw material or a semifinished state to a state of further completion. Manufacturing processes can be arranged in a process layout, product layout, cellular layout, or fixed-position layout. Manufacturing processes can be planned to support make-to-stock, make-to-order, assemble-to-order, and so forth, based on the strategic use and placement of inventories. See: production process, transformation process.M

447

absentee policy

The policy that discusses allowed job absences and the penalties from too many absences.A

448

by-product

A material of value produced as a residual of or incidental to the production process. The ratio of by-product to primary product is usually predictable. Byproducts may be recycled, sold as-is, or used for other purposes. See: co-product.B

449

net requirements

In MRP, the net requirements for a part or an assembly are derived as a result of applying gross requirements and allocations against inventory on hand, scheduled receipts, and safety stock. Net requirements, lot-sized and offset for lead time, become planned orders.N

450

cross-functional integration

Thread that weaves the entire organization and manufacturing process into one fabric in which each of the different parts serves and supports the whole. See: integrated enterprise.C

451

resource management

1) The planning and validation of all organizational resources. 2) The effective identification, planning, scheduling, execution, and control of all organizational resources to produce a good or service that provides customer satisfaction and supports the organization’s competitive edge and, ultimately, organizational goals. 3) An emerging field of study emphasizing the systems perspective, encompassing both the product and process life cycles, and focusing on the integration of organizational resources toward the effective realization of organizational goals. Resources include materials; maintenance, repair, and operating supplies; production and supporting equipment; facilities; direct and indirect employees; staff; administrative R and professional employees; information; knowledge; and capital. Syn: integrated resource management.R

452

scheduling

The act of creating a schedule, such as a shipping schedule, master production schedule, maintenance schedule, or supplier schedule.S

453

detailed scheduling

Syn: operations scheduling.D D

454

marketing management

Syn: demand management.M

455

integrating mechanism

A physical, organizational, or informational entity that allows people and functions to interact freely by transcending boundaries.I

456

telecommunications

Transmission of voice and image data at a distance by electronic means.T

457

ATP

Abbreviation for available-to-promise.A

458

supply chain mastery

A firm’s ability to achieve superior results through exceptional management of revenue generation, segmented supplier and customer management, collaboration and information sharing, risk management, data analysis, and appropriate use of technology.S

459

primary process

A process that performs the main value-added activities of an organization.P

460

market dominance

When a firm has very little competition.M

461

SLA

Abbreviation for service level agreement.S

462

anticipated delay report

A report, normally issued by both manufacturing and purchasing to the material planning function, regarding jobs or purchase orders that will not be completed on time. This report explains why the jobs or purchases are delayed and when they will be completed. This report is an essential ingredient of the closed-loop MRP system. It is normally a handwritten report. Syn: delay report.A

463

market driven

Responding to customers’ needs.M

464

American National Standards Institute (ANSI)

The parent organization of the interindustry electronic interchange of the business transaction standard. This group is the clearinghouse on U.S. electronic data interchange standards.A

465

order multiples

An order quantity modifier applied after the lot size has been calculated that increases the order quantity to a predetermined multiple.O

466

acceptance number

1) A number used in acceptance sampling as a cutoff at which the lot will be accepted or rejected. For example, if x or more units are bad within the sample, the lot will be rejected. 2) The value of the test statistic that divides all possible values into acceptance and rejection regions.A

467

fixed order period system

A method of inventory planning that measures actual inventory levels at regular intervals of time; either an order is placed every time or a check of inventory levels is made and an order placed if needed. Often the quantity ordered varies from period to period as inventory is restored to a predetermined level. See: fixed order quantity system.F

468

organizational change management

The fostering and support of people who champion new technologies, new operating practices, and new products and services that will transform the organization, maintaining its viability and improving its competitive position in step with the change in the business environment in which it functions.O

469

prerelease

The period of product specification, design, and design review.P

470

order consolidation profile

The process of filling an entire order of one customer by bringing all parts of their order together in one place. These items may or may not come from different places or departments.O

471

production materials requisition

Syn: materials requisition.P

472

data integrity

Assurance that data accurately reflects the environment it is representing.D

473

80-20

A term referring to the Pareto principle. The principle suggests that most effects come from relatively few causes; that is, 80 percent of the effects (or sales or costs) come from 20 percent of the possible causes (or items). See: ABC classification.8

474

packing slip

A document that itemizes in detail the contents of a particular package, carton, pallet, or container for shipment to a customer. The detail includes a description of the items, the shipper’s or customer’s part number, the quantity shipped, and the stockkeeping unit (SKU) of items shipped.P

475

aesthetics

A dimension of product quality that intends to appeal to the senses.A

476

cost driver

Syn: driver (first definition).C

477

blanket order release

A message that is used to release a quantity from a blanket order.B

478

shortage gaming

When suppliers ration or apportion supplies, and buyers, in response, inflate their orders in an attempt to receive what they actually need.S

479

reserve

Contingency funds set aside to mitigate risk.R

480

new product introduction

The development and release of an item that is new to a company’s set of offerings.N

481

detailed planning and control

The planning of a project in the short term, covering the present time up until a few weeks out.D

482

floating inventory location system

Syn: random-location storage.F

483

aggregation

The concept that pooling random variables reduces the relative variance of the resulting aggregated variable. For example, the relative variance in sales of all models of automobiles sold by a firm is less than that for a single model.A

484

COFC

Abbreviation for container on a railroad flatcar.C

485

accessibility

1) In transportation, the facility with which a carrier provides service from one point to another. 2) In warehousing, the ability to get to and within the point of storage easily.A

486

per one million defect opportunities

a potential problem that is important to the customer.D

487

market demand

In marketing, the total demand that would exist within a defined customer group in a given geographical area during a particular time period given a known marketing program.M

488

IP)

The communication protocol used by the internet.T

489

agglomeration

Having a common location with a variety of other companies.A

490

Box-Jenkins model

A forecasting method based on regression and moving average models. The model is based not on regression of independent variables, but on past observations of the item to be forecast at varying time lags and on previous error values from forecasting. See: forecast.B

491

spot buy

A purchase made for standard off-the-shelf material or equipment, on a one-time basis.S

492

average inventory

One-half the average lot size plus the safety stock, when demand and lot sizes are expected to be relatively uniform over time. The average can be calculated as an average of several inventory observations taken over several historical time periods; for example, 12-month ending inventories may be averaged. When demand and lot sizes are not uniform, the stock level versus time can be graphed to determine the average.A

493

implied authority

The right of an agent, when directed by a principal to accomplish a task, to do what is reasonably necessary to accomplish it.I

494

discrete order picking

A method of picking orders in which the items on one order are picked before the next order is picked. See: batch picking, order picking, zone picking.D

495

mixed loads

A load having both regulated and exempt items in the same vehicle.M

496

profitability index

In financial management, the net present value of a projected stream of income from a project (potential investment) divided by the investment in the project. It is used to select among competing potential investments.P

497

EDI

Abbreviation for electronic data interchange.E

498

nonsignificant part number

A part number that is assigned to each part but does not convey any information about the part. Nonsignificant part numbers are identifiers, not descriptors. Ant: significant part number.N

499

part number

Syn: item number.P