APICS Deck 2 OO Flashcards
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Term
Definition
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research and development (R&D)
A function that performs basic and applied research and develops potential new products.R
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file
An organized collection of records.F
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aftermarket
A secondary market for parts and accessories used to repair or enhance an item.A
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hybrid layout
This layout combines two or more layout types.H
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sample standard deviation
A key measure that represents the spread or dispersion of a sample.S
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extended enterprise
The notion that supply chain partners form a larger entity. See: supply chain community.E
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output standard
The expected number of units from a process against which actual output will be measured.O
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mean squared error (MSE)
A measure of statistical variation in a forecast. Computed by squaring the forecast errors and then taking the average of the sum of the squared errors.M
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FIFO
Acronym for first in, first out.F
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modular design strategy
The strategy of planning and designing products so that components or subassemblies can be used in current and future products or assembled to produce multiple configurations of a M product. Automobiles and personal computers are examples of modular designs.M
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company stock
generally tied into the compensation/ benefits package. The intention is to give workers a feeling of participation in the management and direction of the company.E
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cold chain
A term referring to the storage, transfer, and supply chain of temperature-controlled products. Industries in the cold chain include food and agriculture, pharmaceuticals, and chemicals.C
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normal and proper usage
Operation of the equipment with a program of regular maintenance in accordance with generally accepted practices and within the rated capacity and service classification for which it was specified and designed.N
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SBQ
Abbreviation for standard batch quantity.S
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CPIM
Abbreviation for Certified in Production and Inventory Management.C
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effectivity date
Syn: effective date.E
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standard service
Service that is the same for most customers.S
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production reporting and status control
A vehicle to provide feedback to the production schedule and allow for corrective action and maintenance of valid on-hand and on-order balances. Production reporting and status control normally include manufacturing order authorization, release, acceptance, operation start, delay reporting, move reporting, scrap and rework reporting, order close-out, and payroll interface. Syn: manufacturing order reporting, shop order reporting.P
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OC curve
Abbreviation for operating characteristic curve.O
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economic value added
In managerial accounting, the net operating profit earned above the cost of capital for a profit center.E
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buffer
1) A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center. 2) In the theory of constraints, buffers can be time or material and support throughput and/or due date performance. B Buffers can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points.B
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FTP
Abbreviation for file transfer protocol.F
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conference room pilot
Simulation of all business processes from end-to-end within the new information system in a controlled environment.C
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attribute data
Go/no-go information. The control charts based on attribute data include percent chart, number of affected units chart, count chart, count-per-unit chart, quality score chart, and demerit chart. See: attribute, attribute inspection.A
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critical path lead time
Syn: cumulative lead time.C
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minimum order quantity
An order quantity modifier, applied after the lot size has been calculated, that increases the order quantity to a pre-established minimum.M
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market research
Syn: marketing research.M
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dividend
A payment to stockholders either in cash or stock.D
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JIT supplier environment
To effectively participate as a supplier under just in time (JIT), a company must supply components and subassemblies in exact quantities, delivery time, and quality. Shipments are made within narrow time windows that are rigidly enforced. Virtually every component must be delivered on time and be within specifications.J
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assignable cause
A source of variation in a process that can be isolated, especially when it’s significantly larger magnitude or different origin readily distinguishes it from random causes of variation. Syn: special cause. See: common causes, assignable variation.A
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DBR
Abbreviation for drum-buffer-rope.D
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indirect costs
Costs that are not directly incurred by a particular job or operation. Certain utility costs, such as plant heating, are often indirect. An indirect cost is typically distributed to the product through the overhead rates.I
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category management
In marketing, an organizational structure giving managers responsibility for planning and implementing marketing systems for certain product lines.C
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business service
The software aspect of electronic commerce. It performs activities, such as encryption, that are required to support business transactions.B
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labor rate variance
Labor rate variance is the sum of the actual wage rate minus the standard wage rate multiplied by the actual number of labor hours. The variance is unfavorable if the actual rate is greater than the standard rate.L
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mixed production strategy
Syn: hybrid production method. See: chase production method, level production method.M
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unit load concept
Waiting for a container or pallet to be filled before the material is moved.U
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pure services
Services that result in few or no tangible products to the customer (e.g., education).P
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return material authorization (RMA)
1) A form that must be completed that describes the product returned and why it was returned. 2) A number given to authorize the acceptance of returned items. 3) Should require signatory authorization to return the goods.R
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run size
Syn: standard batch quantity.R
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short-term planning
The function of adjusting limits or levels of capacity within relatively short periods of time, such as parts of a day, a day, or a week.S
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neural network
A software system loosely based on how the brain works. It tries to simulate the multiple layers of elements called neurons. Each neuron is tied to several neighbors with a value that signifies the strength of the connections. Learning is accomplished by changing the values to cause the network to report appropriate results. Neural networks have been used for market forecasts and other applications.N
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unit-size
To combine a number of packages into one unit by attaching them together.U
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monitoring
The process of comparing actual to planned progress.M
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item
Any unique manufactured or purchased part, material, intermediate, subassembly, or product.I
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purchasing lead time
The total lead time required to obtain a purchased item. Included here are order preparation and release time; supplier lead time; transportation time; and receiving, inspection, and put-away time. See: lead time, supplier lead time, time-to-product.P
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shipping lead time
The number of working days normally required for goods to move between a shipping and receiving point, plus acceptance time in days at the receiving point.S
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line item
One item on an order, regardless of quantity.L
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Pareto chart
A bar graph that displays the results of a Pareto analysis. It may or may not display the 80-20 varPareto P iation, but it does show a distinct variation from the few compared to the many.P
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Deming circle
The concept of a continuously rotating wheel of plan-do-check-action (PDCA) used to show the need for interaction among market research, design, production, and sales to improve quality. See: plan-docheck- action.D
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QCD
Abbreviation for quality, cost, delivery.Q
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algorithm
A prescribed set of well-defined rules or processes for solving a problem in a finite number of steps (e.g., the full statement of the arithmetic procedure for calculating the reorder point).A
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methods-time measurement (MTM)
A system of predetermined motion-time standards, a procedure that analyzes and classifies the movements of any operation into certain human motions and assigns to each motion a predetermined time standard selected by the nature of the motion and the conditions under which it will be made.M
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material-dominated 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 material-dominated scheduling logic. See: processordominated scheduling.M
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Pareto’s law
A concept developed by Vilfredo Pareto, an Italian economist, that states that a small percentage of a group accounts for the largest fraction of the impact, value, and so on. In an ABC classification, for example, 20 percent of the inventory items may constitute 80 percent of the inventory value. See: ABC classification, 80-20.P
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LIFO
Acronym for last in, first out.L
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customer/order fulfillment process
A series of customers’ interactions with an organization through the order filling process, including product/service design, production and delivery, and order status reporting.C
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customer partner
A customer organization with which a company has formed a customer-supplier partnership. See: outpartnering.C
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industrial trucks
Vehicles powered by hand, electricity, or propane for material handling activities in a warehouse. More flexible but slower and less constant than conveyors, they are not in a fixed position. Industrial trucks are the most-common form of materials handling equipment.I
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learning curve
A curve reflecting the rate of improvement in time per piece as more units of an item are made. A planning technique, the learning curve is particularly useful in project-oriented industries in which new products are frequently phased in. The basis for the learning curve calculation is that workers will be able to produce the product more quickly after they get used to making it. Syn: experience curve, manufacturing progress curve.L
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feasibility study
An analysis designed to establish the practicality and cost justification of a given project and, if it appears to be advisable to do so, to determine the direction of subsequent project efforts.F
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spread
Variability of an action. Often measured by the range or standard deviation of a particular dimension.S
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overstated master production schedule
A schedule that includes either past due quantities or quantities that are greater than the ability to produce, given current capacity and material availability. An overstated MPS should be made feasible before MRP is run.O
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flexible automation
Automation that provides short setup times and the ability to switch quickly from one product to another.F
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travel time
Syn: transit time.T
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bona fide
Latin for “in good faith.”B
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materials handling system
The system of transportation that receives, moves, and delivers materials during the production or distribution process.M
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collaborative transportation management
A method of sharing information among suppliers, buyers, and transporters to add value to the service.C
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MTTR
Abbreviation for mean time to repair.M
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export compliance
Cooperating with export rules regarding packaging and documentation.E
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offset quantity
Syn: overlap quantity.O
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functional test
Measure of a production component’s ability to work as designed to meet a level of performance.F
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traveler
A copy of the manufacturing order that actually moves with the work through the shop. Syn: shop traveler.T
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variable overhead
All manufacturing costs, other than direct labor and direct materials, that vary directly with production volume. Variable overhead is necessary to produce the product, but cannot be directly assigned to a specific product.V
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finish-to-order
Syn: assemble-to-order.F
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hazardous waste
Waste, such as chemicals or nuclear material, that is hazardous to humans or animals and requires special handling.H
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statistical thinking
The ability to draw conclusions based on data.S
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prevention vs. detection
A term used to contrast two types of quality activities. Prevention refers to those activities designed to prevent nonconformances in goods and services. Detection refers to those activities designed to detect nonconformances already in goods and services. Syn: designing in quality vs. inspecting in quality.P
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backup/restore
The procedure of making backup copies of computer files or disks and, in case of loss of or damage to the original, using the backups to restore the files or disks. In such a case, the only work lost is that done since the backup was made.B
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trading company
A company that introduces foreign buyers and sellers and arranges all product export/import details, documentation, and transportation.T
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empathy
A dimension of service quality referring to caring, individualized attention from a service firm.E
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exchange rate
The rate at which one currency converts to another.E
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inventory velocity
The speed with which inventory passes through an organization or supply chain at a given point in time as measured by inventory turnover. See: inventory turnover.I
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process oriented
A characteristic in which the focus is on the interrelated processes in a business environment. It includes the activities to transform inputs into outputs that have value.P
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remanufactured parts
Components or assemblies that are refurbished or rebuilt to perform the original function. Syn: refurbished goods, refurbished parts.R
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provisioning
The process of identifying and purchasing the support items and determining the quantity of each support item necessary to operate and maintain a system.P
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container on a flatcar (COFC)
A specialized form of containerization in which rail, motor, and sea transport coordinate.C
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decision variables
The variables that will be changed to find the optimal solution in an optimization problem.D
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CNC
Abbreviation for computer numerical control.C
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cost performance index (CPI)
A measure of project efficiency. Earned value over actual costs.C
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disassembly bill of material
In remanufacturing, a bill of material used as a guide for the inspection in the teardown and inspection process. On the basis of inspection, this bill is modified to a bill of repair defining the actual repair materials and work required. Syn: teardown bill of material. See: repair bill of material.D
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double smoothing
Syn: second-order smoothing.D
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BPM
Abbreviation for business process management.B
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implosion
The process of determining the where-used relationship for a given component. Implosion can be single-level (showing only the parents on the next higher level) or multilevel (showing the ultimate top-level parent). See: where-used list. Ant: explosion.I
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obeya
A Japanese word meaning “big room,” a command center.O
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managerial accounting
A branch of accounting that uses techniques such as break-even analysis, costvolume- profit analysis, make-buy analysis, and others to provide information used in day-to-day decision making.M
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regen
Slang abbreviation for regeneration MRP. Pronounced “ree-jen.”R
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trust
A fiduciary relationship in which the trustee holds ownership for the benefit of another party (benefactor).T
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PERT
Acronym for program evaluation and review technique.P
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offshore factory
A plant that imports or acquires locally all components and then exports the finished product.O
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chase-demand strategy
Syn: chase production method.C
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setup costs
Costs such as scrap costs, calibration costs, downtime costs, and lost sales associated with preparing the resource for the next product. Syn: changeover costs, turnaround costs.S
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resiliency
Resiliency in the supply chain is the ability to return to a position of equilibrium after experiencing an event that causes operational results to deviate from expectations. Resiliency is increased by strategically increasing the number of response options and/or decreasing the time to execute those options. Resiliency is improved by risk monitoring and control.R
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load projection
Syn: load profile.L
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time-based competition (TBC)
A corporate strategy that emphasizes time as the vehicle for achieving and maintaining a sustainable competitive edge. Its characteristics are (1) it deals only with those lead times that are important to the customers; (2) the leadtime reductions must involve decreases in both the mean and the variance; and (3) the lead-time reductions must be achieved through system/process analysis (the processes must be changed to reduce lead times). TBC is a broad-based strategy. Reductions in lead times are achieved by changing the processes and the decision structures used to design, produce, and deliver products to the customers. TBC involves design, manufacturing, and logistical processes.T
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local rate
A rate pertaining to two points served by a single carrier.L
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standard industrial classification (SIC)
Classification codes that are used to categorize companies into industry groupings.S
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hypertext transfer protocol (HTTP)
A protocol that tells computers how to communicate with each other. Most internet addresses begin with http://.H
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business process reengineering (BPR)
A procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service, and speed. Any BPR activity is distinguished by its emphasis on (1) process rather than functions and products and (2) the customers for the process.B
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throughput time
Syn: cycle time (second definition).T
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primary operation
A manufacturing step normally performed as part of a manufacturing part’s routing. Ant: alternate operation.P
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top management commitment (quality)
In the total quality management philosophy, participation of the highest-level official in the organization’s quality improvement efforts. Participation includes establishing and serving on a quality committee, establishing quality policies and goals, deploying those goals to lower levels of the organization, providing the resources and training that the lower levels need to achieve the goals, participating in quality improvement teams, reviewing organization-wide progress, recognizing those who have performed well, and revising the current reward system to reflect the importance of achieving the quality goals.T
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supplier partnership
The establishment of a working relationship with a supplier organization whereby two organizations act as one. Syn: collaborative supply relationship.S
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scope change
In project management, a change to a project’s scope, usually requiring an adjustment to the project’s budget and schedule.S S
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net present value
The present (discounted) value of future earnings (operating expenses have been deducted from net operating revenues) for a given number of time periods.N
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drawback
A refund of customs duties paid on material imported and later exported.D
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industry analysis
A major study of an industry; its major competitors, customers, and suppliers; and the focus and driving forces within that industry.I
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MSDS
Abbreviation for material safety data sheet.M
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composite manufacturing lead time
Syn: cumulative manufacturing lead time.C
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PLM
Abbreviation for product life cycle management.P
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three-point estimate
A project management technique that uses three cost or duration estimates to stand for the optimistic (O), most likely (M), and pessimistic (P) situation. The mean value (MV) is often found using MV=(O+4M+P)/6. This technique can improve the accuracy of cost or duration estimates when underlying assumptions are uncertain.T
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launch phase
In this last phase of product development, either the product is fed into the supply chain or the service is made available to consumers.L
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secure server
In e-commerce, a web server that protects users’ messages from interception while being transmitted over the internet.S
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earliness
If a job is finished before its due date, the difference between its completion date and the due date. See: lateness, tardiness.E
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Pareto analysis
Use of the Pareto principle in prioritizing or ranking a range of items to separate the vital few from the trivial many.P
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grievance
A complaint by an employee concerning alleged contract violations handled formally through contractually fixed procedures. If unsettled, a grievance may lead to arbitration.G
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mean
The arithmetic average of a group of values. Syn: arithmetic mean.M
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sample
A portion of a universe of data chosen to estimate some characteristics about the whole universe. The universe of data could consist of sizes of customer orders, number of units of inventory, number of lines on a purchase order, and so forth.S
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control phase
One of the six sigma phases of quality. Process performance is observed, often with control charts, for steady results.C
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experience curve
Syn: learning curve.E
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scheduled downtime
Planned shutdown of equipment or plant to perform maintenance or to adjust to softening demand.S
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channel conflict
Two or more agencies of one business competing for the same customer. For example, retail, catalog, or web sales.C
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sales plan
A time-phased statement of expected customer orders anticipated to be received (incoming sales, not outgoing shipments) for each major product family or item. It represents sales and marketing management’s commitment to take all reasonable steps necessary to achieve this level of actual customer orders. The sales plan is a necessary input to the production planning process (or sales and operations planning process). It is expressed in units identical to those used for the production plan (as well as in sales dollars). See: aggregate planning, production plan, production planning, sales and operations planning.S
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contributory negligence
A rule under which a defendant may escape liability if it can be shown that the plaintiff was negligent to some extent.C
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private key
In information systems, an encryption key that is known only by the sender and receiver of the message. See: public key.P P
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late order
Syn: past due order.L
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demand shaping
The practice of using the four Ps (product, pricing, placement, and promotion) and other market variables to influence the demand of a product or service so that the demand better matches the available supply. See: four Ps.D
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SPI
Abbreviation for schedule performance index.S
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marketing mix
The concept that marketing strategy selects product, price, promotion, and channel targets in selected markets.M
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project manufacturing
A type of manufacturing process used for large, often unique, items or structures that require a custom design capability (engineer-to-order). This type of process is highly flexible and can cope with a broad range of product designs and design changes. Product manufacturing usually uses a fixed-position type layout. See: batch (fourth definition), continuous production, job shop (second definition), process manufacturing, project, repetitive manufacturing.P
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reconciling inventory
Comparing the physical inventory figures with the perpetual inventory record and making any necessary corrections.R
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econometric model
A set of equations intended to be used simultaneously to capture the way in which dependent and independent variables are interrelated.E
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quantity discount model
A variation of the economic order quantity model in which the assumption of a single price is relaxed and there is a schedule of prices based on specific volumes. Syn: price-break model.Q
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order policy code
Syn: lot-size code.O
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accept
The receipt of an item as being complete and sound.A
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return merchandise authorization
Syn: return material authorization.R
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online processing
A method of computer processing in which data are processed immediately on entry into the computer.O
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treasury stock
Common stock that has been repurchased by the issuing company.T
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supplies
Materials used in manufacturing that are not normally charged to finished production, such as cutting and lubricating oils, machine repair parts, glue, or tape. Syn: general stores, indirect materials.S
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end product
Syn: end item.E
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international standards
Standards established by international standards-setting organizations to promote interoperability among operating environments.I
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discrete variable
A variable, such as number of defects, that can take on only certain values (such as integers). See: continuous variable.D
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inventory planner
Syn: material planner (first definition).I
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software as a service
Computer services are provided by a third party that keeps all of the software and hardware in its place of business and the company using the services accesses them via the internet. A very common technique used to outsource technological state-of-theart costs that can be avoided.S
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broadcast system
A sequence of specific units to be assembled and completed at a given rate. This sequence is communicated to supply and assembly activities to perform operations and position material so that it merges with the correct assembled unit.B
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3D printing
The process of layering materials to make products and components using computer data. Syn: additive manufacturing. See: rapid prototyping.3
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isolation
The determination of the location of a failure through the use of accessory support and diagnostic equipment.I
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executive information system
A software application used by top managers, without assistance, to access information on the current organizational status.E E
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post deduct
In a JIT system, work in process materials used to build finished goods are relieved from inventory by multiplying the number of units completed by the number of parts in the bill of material. Effective only if the bill of material is accurate and manufacturing lead times are short. See: backflushing.P
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machine hours
The amount of time, in hours, that a machine is actually running. Machine hours, rather than labor hours, may be used for planning capacity for scheduling, and for allocating costs.M
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production level
Syn: production rate.P
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form utility
The value created by changing a good’s form through a production process.F
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motion study
A type of methods study focused on therbligs, basic hand and body movements. See: therblig.M
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internal rate of return
The rate of compound interest at which the company’s outstanding investment is repaid by proceeds from the project.I
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actual demand
Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or “consumes” the forecast, depending upon the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence) but will net against the forecast outside this horizon based on the chosen forecast consumption rule.A
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value index
A measure that uses the performance and importance scores for various dimensions of performance for an item or service to calculate a score that indicates the overall value of an item or service to a customer.V
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central limit theorem
A theorem that states that a distribution consisting of sample means can be assumed to be normally distributed, even if the population from C which the samples are drawn is not normally distributed.C
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spoiled work order
Syn: rework order.S
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engineering order
Syn: experimental order.E
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electronic commerce (e-commerce)
The use of computer and telecommunication technologies to conduct business via electronic transfer of data and documents.E
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expert system
A type of artificial intelligence computer system that mimics human experts by using rules and heuristics rather than deterministic algorithms.E
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quick changeover
The ability to shorten machine setups between different machine operation requirements to increase process flexibility. Most concentration is on reducing external setup time first, then on internal setup issues. This reduces economic order quantity, queue and manufacturing lead times, and work in process inventory; it improves quality, process, and material flows.Q
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root cause analysis
Analytical methods to determine the core problem(s) of an organization, process, product, market, and so forth. See: current reality tree, five whys, stratification analysis.R
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cycle stock
One of the two main conceptual components of any item inventory, the cycle stock is the most active component; the cycle stock depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received. The other conceptual component of the item inventory is the safety stock, which is a cushion of protection against uncertainty in the demand or in the replenishment lead time. Syn: cycle inventory.C
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appellant
One who appeals a court decision to higher authority.A
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double-declining-balance depreciation
A type of accelerated depreciation. See: depreciation.D
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design review
A technique for evaluating a proposed design to ensure that the design (1) is supported by adequate materials and materials that are available on a timely basis, (2) will perform successfully during use, (3) can be manufactured at low cost, and (4) is suitable for prompt field maintenance.D
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customer acquisition
In marketing, the rate at which new customers are switching to an organization’s brand.C
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shrinkage
Reductions of actual quantities of items in stock, in process, or in transit. The loss may be caused by scrap, theft, deterioration, evaporation, and so forth.S
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(EDIFACT)
A set of United Nations rules for electronic data interchange. These are international guidelines and standards for the electronic exchange of data regarding trade.E
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economic lot size
Syn: economic order quantity.E
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Toyota Production System (TPS)
A manufacturing methodology developed at Toyota that has evolved into the concepts of just in time and lean manufacturing.T
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long-term planning
Business planning that addresses the strategic needs of the organization. See: business plan, resource planning.L
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order promising
The process of making a delivery commitment (i.e., answering the question “When can you ship?”). For make-to-order products, this usually involves a check of uncommitted material and availability of capacity, often as represented by the master schedule available-to-promise. Syn: customer order promising, order dating. See: available-to-promise, order service.O
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standard error
A measurement of the variability of statistics such as the sample mean. See: estimate of error.S
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consumer
A person who purchases a good or service for his or her own use (not for resale). See: customer.C
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forward flow scheduling
A procedure for building process train schedules that starts with the first stage and proceeds sequentially through the process structure until the last stage is scheduled.F
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amortization
The process of recovering (via expensing) a capital investment over a period of time. See: capital recovery.A
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transfer pricing
The pricing of goods or services transferred from one segment of a business to another. See: interplant transfer.T
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assembly bin
Syn: accumulation bin.A
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process capability analysis
A procedure to estimate the parameters defining a process. The mean and standard deviation of the process are estimated and compared to the specifications, if known. This comparison is the basis for calculating capability indexes. In addition, the form of the relative frequency distribution of the characteristic of interest may be estimated. Syn: capability study. See: process capability.P
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distribution cost
Those items of cost related to the activities associated with the movement and storage of finished products. Distribution costs can include invendistribution D tory costs, transportation costs, and order processing costs.D
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anticipation order
An order placed before an item has been made available for delivery.A
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forward integration
Process of buying or owning elements of the production cycle and the channel of distribution forward toward the final customer. See: vertical integration.F
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forecasting
The business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance.F
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planning horizon
The amount of time a plan extends into the future. For a master schedule, this is normally set to cover a minimum of cumulative lead time plus time for lot sizing low-level components and for capacity changes of primary work centers or of key suppliers. For longer term plans the planning horizon must be long enough to permit any needed additions to capacity. See: cumulative lead time, planning time fence.P
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gross margin
The difference between total revenue and the cost of goods sold. Syn: gross profit margin.G
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churn reduction
Not losing as many customers to the competition.C