APICS Deck 10 OO Flashcards
Learning - APICS Terms
1
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APICS Deck 10
retail method
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A method of inventory valuation in which the value is determined by applying a predetermined percentage based on retail markup to the retail price, to determine its inventory value based on cost.R
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parent
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Syn: parent item.P
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APICS Deck 10
allocated material
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Syn: reserved material.A
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evaporating cloud
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In the theory of constraints, a logicbased tool for surfacing assumptions related to a conflict or problem. Once the assumptions are surfaced, actions to break an assumption and hence solve (evaporate) the problem can be determined.E
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APICS Deck 10
backflush
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A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component’s upper-level parent item based on what should have been used as specified on the bill of material and allocation records. This approach has the disadvantage of a built-in differential between the book record and what is physically in stock. Syn: explode-to-deduct, post-deduct inventory transaction processing. See: pre-deduct inventory transaction processing.B
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TRP
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Abbreviation for transportation requirements planning.T
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commercial invoice
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An official document indicating the names of the seller and buyer, the product being shipped, and its value. The document is provided by the seller.C
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resource-limited scheduling
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The scheduling of activities so that predetermined resource availability pools are not exceeded. Activities are started as soon as resources are available (with respect to logical constraints), as required by the activity. When not enough of a resource exists to do all tasks on a given day, a priority decision is made. Project finish may be delayed, if necessary, to alter schedules constrained by resource usage.R
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APICS Deck 10
constrained optimization
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Achieving the best possible solution to a problem in terms of a specified objective function and a given set of constraints.C
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APICS Deck 10
optimization
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Achieving the best possible solution to a problem in terms of a specified objective function.O
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APICS Deck 10
and transportation
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that is aligned with the overall business strategy. See: strategic plan.L
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operating leverage
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Comparing an organization’s annual sales to its annual costs.O
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letter of credit
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An assurance by a bank that payment will be made as long as the sales terms agreed to by the buyer and seller are met. This method of payment for sales contracts provides a high degree of protection for the seller.L
14
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APICS Deck 10
strategic variables
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The most important variables that effect the business environment and business strategy. These are typically the economic situation, population demographics, changes in technology, and government policies.S
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time series forecasting
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A forecasting method that projects historical data patterns into the future. It involves the assumption that the near-term future will be like the recent past.T
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advanced planning system (APS)
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Syn: advanced planning and scheduling.A
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freight carriers
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Companies that move cargo via truck, rail, air, or sea.F
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APICS Deck 10
encryption
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Changing readable words into another form, called a cipher, which hides the text’s meaning.E
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functional requirements
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Syn: critical characteristics.F
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residual income
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The net operating income that an investment center earns above the minimum required return on its operating assets.R
21
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global marketing
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The use of one marketing strategy in all countries in which a company operates, selling a single product worldwide.G
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reverse auction
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An internet auction in which suppliers attempt to underbid their competitors. Company identities are known only by the buyer.R
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common parts bill
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Syn: common parts bill of material.C
24
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sales order number
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A unique control number assigned to each new customer order, usually during order entry. It is often used by order promising, master scheduling, cost accounting, invoicing, and so forth. For some S make-to-order products, it can also take the place of an end item part number by becoming the control number that is scheduled through the finishing operations.S
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slack time
In project management, the amount of time that an activity may be delayed from its early start without delaying the project finish date. Syn: slack.S
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segment customers
Grouping customers by common characteristics to facilitate sales.S
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seasonal component
A component of demand, usually describing the impact of variations that occur because of the time of year (quarter, month, week) on demand. See: decomposition, time series analysis.S
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vertically integrated firm
An organization with functions that were previously performed by suppliers but are now done internally. See: horizontally integrated firm.V
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random numbers
A sequence of integers or group of numbers (often in the form of a table) that show absolutely no relationship to each other anywhere in the sequence. At any point, all values have an equal chance of occurring, and they occur in an unpredictable fashion.R
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probability distribution
A table of numbers or a mathematical expression that indicates the frequency with which each of all possible results of an experiment should occur.P
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mixed-model assembly line
An assembly line with more than one type of model passing through it.M
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hypothesis testing
Use of statistical models to test conclusions about a population or universe based on sample information.H I
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is secured are changed
as opposed to value analysis, in which the item itself is actually changed to produce a lower cost.C
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Management (CFPIM)
The APICS designation that is a recognition of superior knowledge and performance in contributing to the profession.C
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campaign
A series of batches of the same product run together (back to back).C
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production report
A statement of the output of a production facility for a specified period. The information normally includes the type and quantity of output; workers’ efficiencies; departmental efficiencies; costs of direct labor, direct material, and the like; overtime worked; and machine downtime.P P
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multidomestic strategy
Syn: multicountry strategy.M
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material flexibility
The ability of the transformation process to handle unexpected variations in material inputs.M
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incentive
A reward, financial or otherwise, that compensates a worker for high or continued performance above standard. An incentive is also a motivating influence to induce effort above normal.I
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acceptable sampling plan
A specific plan that indicates the sampling sizes and the associated acceptance or nonacceptance criteria to be used.A
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net change MRP
An approach in which the material requirements plan is continually retained in the computer. Whenever a change is needed in requirements, open order inventory status, or bill of material, a partial explosion and netting is made for only those parts affected by the change. Ant: regeneration MRP.N
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DOE
Abbreviation for design of experiments.D
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GAAP
Acronym for generally accepted accounting principles.G
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gateway work center
A work center that performs the first operation of a particular routing sequence.G
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production part approval process (PPAP)
A Big Three automotive process outlining requirements for approval of production parts. Its purpose is to measure whether a supplier can, with regularity, fulfill these requirements.P
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contract date
The date when a contract is accepted by all parties.C
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design for service
Simplification of parts and processes to improve the after-sale service of a product. Syn: design for maintainability.D
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external environment
All the factors that exist outside the boundary of the organization that have the possibility of affecting any part of the organization. See: internal environment, organizational environment.E
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assembly chart
Overview of a product containing assembly and subassembly operations, materials, and components.A A
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significant part number
A part number that is intended to convey certain information, such as the source of the part, the material in the part, or the shape of the part. Using numbers to represent this information usually makes these part numbers longer than corresponding nonsignificant part numbers. Ant: nonsignificant part number.S
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booked orders
Demand that has been confirmed. See: customer order, demand, order penetration point.B
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supply chain resilience
The ability of a supply chain to anticipate, create plans to avoid or mitigate, and/or to recover from disruptions to supply chain functionality.S
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project risk management
In project management, a systematic process of controlling project risk. It includes maximizing the likelihood and effect of positive events and minimizing the likelihood and effect of negative events.P
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fixed-position manufacturing
Similar to project manufacturing, this type of manufacturing is mostly used for large, complex projects, where the product remains in one locations for its full assembly period or may move from location to location after considerable work and time are spent on it. Examples of fixed position manufacturing include shipbuilding or aircraft assembly, where the costs of frequent movement of the product are very high.F
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AS/RS
Abbreviation for automated storage/retrieval system.A
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NLRB
Abbreviation for National Labor Relations Board.N
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operating expense
All the money an organization spends in generating “goal units.”O
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pipeline inventory
Syn: pipeline stock.P
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normal time
In time study, adjusting the actual time observed by a factor called pace rating. See: pace rating.N
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leveling
Syn: resource leveling.L
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push technology
The automatic updates in selected services, such as news or weather, that occur periodically as information is sent via the internet. The source of the information “pushes” it upon the customer. Syn: webcasting.P
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external setup time
The time associated with elements of a setup procedure performed while the process or machine is running. Ant: internal setup time.E
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MRO
1) Abbreviation for maintenance, repair, and operating. 2) Abbreviation for maintenance, repair, and overhaul.M
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eBPP
Abbreviation for electronic bill presentment and payment.E
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secondary highways
Highways that are predominantly rural in nature.S
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continuous process
Syn: continuous production.C
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comptroller
Syn: controller.C
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breakdown maintenance
Remedial maintenance that occurs when equipment fails and must be repaired on an emergency or priority basis. Syn: irregular maintenance, reactive maintenance.B
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item demand
Demand disaggregated into specific configurations of goods or services. See: item.I
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extrinsic forecasting method
A forecast method on a correlated leading indicator, such as estimating furniture sales based on housing starts. Extrinsic forecasts tend to be more useful for large aggregations, such as total company sales, than for individual product sales. Ant: intrinsic forecast method. See: quantitative forecasting technique.E F F
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contribution margin
An amount equal to the difference between sales revenue and variable costs.C
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contract reporting
Reporting of and the accumulation of finished production against commitments to a customer.C contracts for the international sale of goods (CISG) Govern the sale of goods in the international environment. They enable exporters to avoid choice-of-law issues.C
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build cycle
The time period between a major setup and a cleanup. It recognizes cyclical scheduling of similar products with minor changes from one product/model to another.B
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green reverse logistics
The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals.G
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distribution inventory
Inventory, usually spare parts and finished goods, located in the distribution system (e.g., in warehouses, in-transit between warehouses and the consumer).D
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field
A specified area of a record used for a particular category of data.F
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Project Management Body of Knowledge (PMBOK®)
All the knowledge within the project management profession; this includes all published and unpublished material, knowledge that rests with practitioners and academics, and practices that range from traditional to innovative.P
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shipping tolerance
An allowable deviation that the supplier can ship over or under the contract quantity.S
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supplier audit
Auditing supplier processes as part of a supplier development system.S
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job costing
A cost accounting system in which costs are assigned to specific jobs. This system can be used with either actual or standard costs in the manufacturing of distinguishable units or lots of products. Syn: job order costing.J
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actual cost system
A cost system that collects costs historically as they are applied to production and allocates indirect costs to products based on the specific costs and achieved volume of the products.A
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total cost curve
1) In cost-volume-profit (breakeven) analysis, the total cost curve is composed of total fixed and variable costs per unit multiplied by the number of units provided. Breakeven quantity occurs where the total cost curve and total sales revenue curve intersect. See: break-even chart, break-even point. 2) In inventory theory, the total cost curve for an inventory item is the sum of the costs of acquiring and carrying the item. See: economic order quantity.T
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inventory visibility
The extent to which inventory information is shared within a firm and with supply chain partners.I
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quality trilogy
A three-pronged approach to managing quality proposed by Joseph Juran. The three legs are quality planning (developing the products and processes required to meet customer needs), quality control (meeting product and process goals), and quality improvement (achieving unprecedented levels of performance). Syn: Juran trilogy.Q
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load leveling
Spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable. Although both material and labor are ideally level loaded, specific businesses and industries may load to one or the other exclusively (e.g., service industries). Syn: capacity smoothing, level loading. See: level schedule.L
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replenishment
Relocating material from a bulk storage area to an order pick storage area, and documenting this relocation.R
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fee
The charge for the use of the contractor’s organization for the period and to the extent specified in the contract.F
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transportation inventory
Inventory that is in transit between locations. See: pipeline stock, transit inventory.T
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planned issue receipt
A transaction that updates the on-hand balance and the related allocation or open order.P
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rolling forecast
Moving the forecast horizon forward to new periods by adding recent data (and perhaps dropping the oldest data).R
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location tag
A bar-coded sign situated at a warehouse location. The location number can be read or scanned.L
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debenture
A bond that is backed by the general credit of the issuing firm.D
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protect system throughput
ensuring that some capacity above the capacity required to exploit the constraint is available to catch up when disruptions inevitably occur. Nonconstraint resources need protective capacity to rebuild the bank in front of the constraint or capacityconstrained resource (CCR) and/or on the shipping dock before throughput is lost and to empty the space buffer when it fills.P
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general-purpose machinery
Manufacturing resources that can perform several kinds of operations.G
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batch bill of materials
A recipe or formula in which the statement of quantity per is based on the standard batch quantity of the parent. Syn: batch formula.B
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prime costs
Direct costs of material and labor. Prime costs do not include general, sales, and administrative costs.P
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demurrage
The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. See: detention, express.D
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material constraint
Usually a misnomer. Material shortages are rarely the constraint, rather temporary material shortages hinder effective constraint management by inhibiting the ability to fully exploit and/or subordinate to the constraint.M
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failsafe work methods
Methods of performing operations so that actions that are incorrect cannot be completed. For example, a part without holes in the proper place cannot be removed from a jig, or a computer system will reject invalid numbers or require double entry of transaction quantities outside the normal range. Called poka-yoke by the Japanese. Syn: failsafe techniques, mistake-proofing, poka-yoke.F
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cycle counting
An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year. A cycle inventory count is usually taken on a regular, defined basis (often more frequently for high-value or fast-moving items and less frequently for low-value or slow-moving items). Most effective cycle counting systems require the counting of a certain number of items every workday with each item counted at a prescribed frequency. The key purpose of cycle counting is to identify items in error, thus triggering research, identification, and elimination of the cause of the errors.C
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automatic identification and data capture (AIDC)
A set of technologies that collect data about objects and then send these data to a computer without human intervention. Examples include radio frequency wireless devices and terminals, bar code scanners, and smart cards.A
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total cost concept
In logistics, the idea that all logistical decisions that provide equal service levels should favor the option that minimizes the total of all logistical costs and not be used on cost reductions in one area alone, such as lower transportation charges.T
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bundling
Combining two or more products or services into a single transaction.B
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cultural environment
The sociocultural factors of the organization’s external environment. It includes values, work ethics, education, religion, and consumer and ecological factors.C
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dummy activity
In activity-on-arrow diagramming, an activity with zero duration used to express a precedence relationship that can’t otherwise be diagrammed. It is shown graphically with a dashed arrow.D
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independent demand
The demand for an item that is unrelated to the demand for other items. Demand for finished goods, parts required for destructive testing, and service parts requirements are examples of independent demand. See: dependent demand.I independent demand item management models Models for the management of items whose demand is not strongly influenced by other items managed by the same company. These models can be characterized as follows: (1) stochastic or deterministic, depending on the variability of demand and other factors; (2) fixed quantity, fixed cycle, or hybrid (optional replenishment). See: fixed reorder cycle inventory model, fixed reorder quantity inventory model, optional replenishment model.I
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on-time delivery
A metric measuring the percent of receipts that were received on time by customers. See: on-time in full.O
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parts list
A list of parts, materials, and components required to make an item. See: single level bill of material.P
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quarantine
The setting aside of items from availability for use or sale until all required quality tests have been performed and conformance certified.Q
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union contract
A formal contract, usually covering twoto- six years, between a union representing employees and their company that covers all aspects of pay, working conditions, and strike options.U
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commodity
An item that is traded in commerce. The term usually implies an undifferentiated product competing primarily on price and availability.C
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system layout planning (SLP)
A facility layout methodology that develops the layout of a facility by considering the importance of proximity of each department to the other departments.S
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EDT
An abbreviation for electronic data transfer.E
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terms and conditions
All the provisions and agreements of a contract.T
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roll-on/roll-off container ship
A ship that allows trailers to be driven on and off without the use of cranes.R
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cost of sales
The total cost attached (allocated) to units of finished product delivered to customers during the period. See: cost of goods sold.C
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enterprise resources portal
A means for a company to share, exchange, or transact information with an external business partner using internet-based technologies. An enterprise resources portal is often associated with an enterprise resources planning system, which can be configured to share or present such information via an internet portal or hyperlink. An enterprise resources portal can also be one means of implementing a private trading exchange.E
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schedule activity
During a project, a specific piece of work performed that has estimated costs, duration, and resource requirements.S
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scarcity
A concept central to economics that means less of a good is freely available than consumers would like.S
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annual physical inventory
Syn: physical inventory.A
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first-tier supplier
One that supplies goods or services directly to a business.F
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put-to-light
A process that uses lights to ensure materials are placed in the correct locations. Also, it is used to ensure that picked items are placed correctly.P
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activity analysis
In project management, the identification and description of activities within an organization for the purpose of activity-based costing.A
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sales quota
The level of sales that an individual or group is expected to meet.S
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star
A slang term used to refer to a high-growth, highprofit- margin product. See: growth-share matrix.S
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MTFF
Abbreviation for mean time for failures.M
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APP
Abbreviation for aggregate production plan.A
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forward scheduling
A scheduling technique where the scheduler proceeds from a known start date and computes the completion date for an order, usually proceeding from the first operation to the last. Dates generated by this technique are generally the earliest start dates for operations. See: forward pass. Ant: back scheduling.F
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producer
One who creates a good or service.P
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value analysis
The systematic use of techniques that identify a required function, establish a value for that function, and finally provide that function at the lowest overall cost. This approach focuses on the functions of an item rather than the methods of producing the present product design.V
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product benchmarking
This benchmarking is used for new product design or for a product upgrade. This often includes reverse engineering (dismantling) competing products to determine their strengths and weaknesses. See: benchmarking.P
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differentiated oligopoly
A market in which a few companies produce partially differentiated products or services that are marketed within a given geographical area. Differentiation may be based on quality, features, styling, or services offered along with the product. See: industry structure types.D
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appreciation of a currency
An increase in the buying power of a country’s currency in terms of other countries’ goods and services.A
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information system
Interrelated computer hardware and software along with people and processes designed for the collection, processing, and dissemination of information for planning, decision making, and control.I
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active data gathering
Data gathered when a company initiates conversation with the customer.A
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smoothing inventories
Inventories used when upstream production levels are less than downstream demand.S S
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global positioning system (GPS)
A system that uses satellites to locate an object’s position.G
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job design
The function of describing a job with respect to its content and the methods to be used. Criteria, such as the degree of job specialization, job enrichment, and job enlargement are useful in designing work content.J
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system
A regularly interacting or interdependent group of items forming a unified whole toward the achievement of a goal.S
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line functions
Areas involved in daily operations. Logistics line functions include inventory control, order processing, warehousing and packaging.L
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purchasing
The term used in industry and management to denote the function of and the responsibility for procuring materials, supplies, and services.P
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assortment warehousing
A warehousing technique that stores the goods close to the customer to ensure short customer lead times.A
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outside shop
Suppliers. This term is used to convey the idea that suppliers are an extension of the inside shop or the firm’s production facilities.O
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gross inventory
The standard cost value of inventory before allowance for excess or obsolete items.G
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customer convergence
An internet-based marketing concept in which organizations must provide descriptions of the goods and services they offer so that potential customers locate or converge on the appropriate websites.C
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book value
The accounting value of an asset.B
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holding company
In financial management, a firm that controls the voting stock of other firms.H
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import merchant
Purchasing agent who buys and takes the title for goods and then resells them.I
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line haul costs
Basic costs of carrier operation to move a container of freight, including driver's wages and usage depreciation. These vary with the cost per mile, the distance shipped, and the weight moved.L
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client/server system
A distributed computing system in which work is assigned to the computer best able to perform it from among a network of computers.C
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horizontally integrated firm
An organization that seeks to produce or sell a type of product in numerous markets. The horizontal integration exists when an organization produces or sells similar products in various geographical locations. Horizontal integration in marketing occurs more frequently than horizontal integration in production. See: vertically integrated firm.H
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statistical order point
Syn: order point.S
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CRP
Abbreviation for capacity requirements planning.C
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produce-to-stock
Syn: make-to-stock.P
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reliability
The probability that a product will perform its specified function under prescribed conditions without failure for a specified period of time. It is a design parameter that can be made part of a requirements statement. See: mean time between failures, mean time for failures.R
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improvement involving everyone
managers and workers. In manufacturing, kaizen relates to finding and eliminating waste in machinery, labor, or production methods. See: continuous process improvement.K
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MBWA
Abbreviation for management by walking around.M
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equivalent days
The standard hour requirements of a job converted to days for scheduling purposes.E
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assembly order
A manufacturing order to an assembly department authorizing it to put components together into an assembly. See: blend order.A
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usage variance
Deviation of the actual consumption of materials as compared to the standard.U
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activity-based management (ABM)
The use of activitybased costing information about cost pools and drivers, activity analysis, and business processes to identify business strategies; improve product design, manufacturing, and distribution; and remove waste from operations. See: activity-based cost accounting.A
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will call
A service process that allows customers to walk up to the seller’s facility and pick up the parts they have previously ordered.W
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fixed assets
Assets acquired for use within a company having an estimated useful life of one year or more.F
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mass production
High-quantity production characterized by specialization of equipment and labor. See: continuous production.M
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move
The physical transportation of inventory from one location to another within a facility. Movements are usually made under the direction and control of the inventory system.M
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planned issue
A disbursement of an item predicted by MRP through the creation of a gross requirement or allocation. Syn: controlled issue.P
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MAD
Acronym for mean absolute deviation.M
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configuration control
The function of ensuring that the product being built and shipped corresponds to the product that was designed and ordered. This means that the correct features, customer options, and engineering changes have been incorporated and documented.C
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total annual material receipts
The amount (in dollars) of all direct materials that were received in a calendar year. This number should fall very close to the direct material dollars that were used in a calendar year in a lean environment.T
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automation
The substitution of machine work for human physical and mental work, or the use of machines for work not otherwise able to be accomplished, entailing a less continuous interaction with humans than previous equipment used for similar tasks.A
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distribution planner
A person who plans inventories and schedules replenishment shipments for the distribution centers.D
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electronic document
The electronic representation of a document that can be printed.E
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price prevailing at date of shipment
An agreement between a purchaser and a supplier that the price of the goods ordered is subject to change at the supplier’s discretion between the date the order is placed and the date the supplier makes shipment and that the thenestablished price is the contract price.P
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scatterplot
Syn: scatter chart.S
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strategic alliance
A relationship formed by two or more organizations that share information (proprietary), participate in joint investments, and develop linked and common processes to increase the performance of both companies. Many organizations form strategic alliances to increase the performance of their common supply chain.S
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informal culture
Organizational characteristics and relationships that are not part of the formal structure but that influence how the organization accomplishes its goals.I
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computer-aided engineering (CAE)
The process of generating and testing engineering specifications on a computer workstation.C
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gap phasing
Syn: gapped schedule.G
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limiting operation
The operation with the least capacity in a series of operations with no alternative routings. The capacity of the total system can be no greater than the limiting operation, and as long as this limiting condition exists, the total system can be effectively scheduled by scheduling the limiting operation and providing this operation with proper buffers. See: protective capacity, protective inventory.L
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accumulation bin
A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor. Syn: assembly bin.A
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demand chain management
A supply chain inventory management approach that concentrates on demand pull rather than supplier push inventory models.D D
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economy of scale
A phenomenon whereby larger volumes of production reduce unit cost by distributing fixed costs over a larger quantity. See: economy of scope.E
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multiactivity chart
Shows how workers interact with each other, or with machines, for different activities.M
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rate variance
The difference between the actual output rate of product and the planned or standard output rate.R
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stochastic models
Models where uncertainty is explicitly considered in the analysis.S
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distribution system
A group of interrelated facilities manufacturing and one or more levels of warehousing linking the production, storage, and consumption activities for spare parts and finished goods inventory. See: pipeline stock.D
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charge
The initial loading of ingredients or raw materials into a processor, such as a reactor, to begin the manufacturing process.C
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collaborative planning
Syn: collaborative planning, forecasting, and replenishment.C C collaborative planning, forecasting, and replenishment
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patent
A legal document giving exclusive rights to the production, use, sale, or other action regarding a product or process.P
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flow shop
A form of manufacturing organization in which machines and operators handle a standard, usually uninterrupted, material flow. The operators generally perform the same operations for each production run. A flow shop is often referred to as a mass production shop or is said to have a continuous manufacturing layout. The plant layout (arrangement of machines, benches, assembly lines, etc.) is designed to facilitate a product “flow.” Some process industries (chemicals, oil, paint, etc.) are extreme examples of flow shops. Each product, though variable in material specifications, uses the same flow pattern through the shop. Production is set at a given rate, and the products are generally manufactured in bulk. Syn: flow line, flow manufacturing, flow plant.F
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fast-tracking
A project schedule compression technique that overlaps (or performs in parallel) activities that would ordinarily be performed sequentially.F
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direct labor cost
The compensation of workers who are involved in converting material into a finished product.D
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participative management
A system that encompasses various activities of high involvement in which subordinates share a significant degree of decision-making power with their immediate superiors. Participative management draws on the rationale that everyone in an organization is capable of and willing to help guide and direct the organization toward agreed-on goals and objectives.P
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process map
A diagram of the flow of a production process or service process through the production system. Standardized symbols are used to designate processing, flow directions, branching decisions, input/output, and other aspects of the process.P
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tended to be limited
they only had to meet the demands of human users entering and retrieving data. With the emergence of e-commerce and internet search engines, database technology is evolving to manage humans and computers. Today, with the amount of data growing by 50 percent each year, it is information technology that is capable of managing, processing, and finding value.B
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distribution requirements planning (DRP)
1) The function of determining the need to replenish inventory at branch warehouses. A time-phased order point approach is used where the planned orders at the branch warehouse level are “exploded” via MRP logic to become gross requirements on the supplying source. In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (master warehouse, factory warehouse, etc.) and become input to the master production schedule. Demand on the supplying sources is recognized as dependent, and standard MRP logic applies. 2) More generally, replenishment inventory calculations, which may be based on other planning approaches such as period order quantities or “replace exactly what was used,” rather than being limited to the time-phased order point approach.D
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supplier-managed inventory
A relationship where the buyer maintains inventory usually at its facility and provides the supplier information about the amount of stock on hand. It is the responsibility of the supplier to monitor this information and send replacement items when the inventory reaches a particular level.S
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destructive testing
Inspection that renders the inspected part inoperable.D
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demographics
The characteristics of a specific population, such as a set of potential customers.D
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process yield
See: yield.P
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long-term production plan
Syn: aggregate production plan.L
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supply chain
The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.S
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wait time
The time a job remains at a work center after an operation is completed until it is moved to the next operation. It is often expressed as a part of move time.W
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shipping lane
A specific route that ocean liners take between ports to help traffic flow and to avoid the most dangerous areas of the ocean.S
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entrepreneur
One who organizes resources productively and bears the risk of the venture.E
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Gantt chart
The earliest and best-known type of planning and control chart, especially designed to show graphically the relationship between planned performance and actual performance over time. Named after its originator, Henry L. Gantt, the chart is used for (1) machine loading, in which one horizontal line is used to represent capacity and another to represent load against that capacity; or (2) monitoring job progress, in which one horizontal line represents the production schedule and another parallel line represents the actual progress of the job against the schedule in time. Syn: job progress chart, milestone chart.G
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date effectivity
A technique used to identify the effective date of a configuration change. A component change is controlled by effective date within the bill of material for the unchanged parent part number.D
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PMBOK®
Abbreviation for project management body of knowledge. A registered trademark of the Project Management Institute, Inc.P
209
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production kanban
A signal, usually a card, used to trigger the production of a part.P
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conformance perspective
A measure of how closely a product or service performs to its intended quality.C
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controlled access
Fenced or walled areas within a warehouse or yard usually monitored by security cameras. These areas are used to store high-value items.C
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TCP/IP
Abbreviation for transmission control protocol/ internet protocol.T
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brand recognition
The degree to which customers recognize a particular brand identity and associate it with a particular product line relative to other available brands.B
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trend adjusted exponential smoothing forecasting
A form of exponential smoothing forecasting that includes T a factor for increasing or decreasing tendencies in the data due to things such as population growth or income changes.T
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event-on-node network
Syn: activity-on-node network.E
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cost of lost sales
Profit that is foregone because of a stock-out situation.C
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chain of customers
The sequence of customers who in turn consume the output of each other, forming a chain. For example, individuals are customers of a department store, which in turn is the customer of a producer, who is the customer of a material supplier.C
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business intelligence
Information collected by an organization on customers, competitors, products or services, and processes. Business intelligence provides organizational data in such a way that the organizational knowledge filters can easily associate with this data and turn it into information for the organization. Persons involved in business intelligence processes may use application software and other technologies to gather, store, analyze, and provide access to data, and present that data in a simple, useful manner. The software aids in business performance management and aims to help consumers make better business decisions by offering them accurate, current, and relevant information. Some businesses use data warehouses because they are a logical collection of information gathered from various operational databases for the purpose of creating business intelligence.B
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wide area network (WAN)
A public or private data communication system for linking computers distributed over a large geographic area.W
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IFB
Abbreviation for invitation for bid.I
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quick ratio
Syn: quick asset ratio.Q
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scheduling (MDS)
A technique that schedules materials before processors (equipment or capacity). This technique facilitates the efficient use of materials. MDS can be used to schedule each stage in a process flow scheduling system. MRP systems use materialdominated scheduling logic. See: processor-dominated scheduling.M
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machine center
A production area consisting of one or more machines (and, if appropriate for capacity planning, the necessary support personnel) that can be considered as one unit for capacity requirements planning and detailed scheduling.M
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master scheduling
The process where the master schedule is generated and reviewed and adjustments made to the master production schedule to ensure consistency with the production plan. The master production schedule (the line on the grid) is the primary input to the material requirements plan. The sum of the master production schedules for the items within the product family must equal the production plan for that family.M
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velocity
1) The rate of change of an item with respect to time. See: inventory turnover, lead time. 2) In supply chain management, a term used to indicate the relative speed of all transactions, collectively, within a supply chain community. A maximum velocity is most desirable because it indicates higher asset turnover for stockholders and faster order-to-delivery response for customers.V
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cash flow
The net flow of dollars into or out of the proposed project. The algebraic sum, in any time period, of all cash receipts, expenses, and investments. Also called cash proceeds or cash generated.C
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can-order point
An ordering system used when multiple items are ordered from one vendor. The can-order point is a point higher than the original order point. When any one of the items triggers an order by reaching the mustorder point, all items below their can-order point are also ordered. The can-order point is set by considering the additional holding cost that would be incurred should the item be ordered early.C
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accounts receivable
The value of goods shipped or services rendered to a customer on which payment has not yet been received. Usually includes an allowance for bad debts.A
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control system
A system that has as its primary function the collection and analysis of feedback from a given set of functions for the purpose of controlling the functions. Control may be implemented by monitoring or systematically modifying parameters or policies used in those functions, or by preparing control reports that inconvergent C itiate useful action with respect to significant deviations and exceptions.C
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WAN
Acronym for wide area network.W
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customer service management process
A process that enables a business to offer post-purchase service and information to the customer.C
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customer order
An order from a customer for a particular product or a number of products. It is often referred to as an actual demand to distinguish it from a forecasted demand. See: booked orders.C
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Monopolistic competition
Many competitors offer partially differentiated products or services. Most competitors focus on market segments where they can meet customers’ needs somewhat better than their competitors;
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cost-ratio plan
A variation of the weighted-point plan of supplier evaluation and selection. The cost ratio is obtained by dividing the bid price by the weighted scores determined by the weighted-point plan. This procedure determines the true costs by taking into account compensating factors. Suppliers are selected and/or evaluated based on the lowest cost ratio.C
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gross national product (GNP)
The market value of all goods and services produced in a nation in a given year.G
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baseband coax
A coaxial cable offering a single channel for text, voice, or video transmission.B
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returns management process
A process of handling returns that includes environmentally sound disposal or recycling, composing repair instructions, warranty repairs, and collecting return data.R
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space buffer
Physical space immediately after the constraint that can accommodate output from the constraint when there is a stoppage downstream that would otherwise force the constraint to stop too.S
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exception report
A report that lists or flags only those items that deviate from the plan.E
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order fulfillment lead times
The average amount of time between the customer’s order until the customer receives delivery; this includes every manufacturing or processing step in between.O
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decentralized authority
The process of dispersing decision-making governance to staff people below the executive level of an organization.D
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hansei
A Japanese word meaning reflection.H
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supplier performance evaluation
Monitoring and evaluating key suppliers on cost, quality, engineering, purchasing, and so on, based on an agreed set of measurements.S
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pilot plant
A small-scale production facility used to develop production processes and to manufacture small quantities of new products for field testing and so forth. Syn: semiworks.P
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subcontractor and supplier networks
Creating longterm contracts between a manufacturer and several suppliers of parts and components.S
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production line
A series of pieces of equipment dedicated to the manufacture of a specific number of products or families.P
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order reporting
Recording and reporting the start and completion of the manufacturing order (shop order) in its entirety.O
