Vocab 2 Flashcards
economic order quantity (EOQ)
Type of fixed order quantity model that determines the amount of an item to be purchased or manufactured at one time. Minimize combined costs of acquiring and carrying inventory
enterprise resources planning (ERP)
Framework for organizing, defining and standardizing the business processes.
Necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage.
Provides extensive databanks of information on historical and current transactional data.
external failure costs
Costs associated with defects found after the customer receives the product or service
external setup time
The time associated with elements of a setup procedure performed while the process or machine is running
extrinsic forecasting method
Forecast method using a correlated leading indicator.
For example furniture sales based on housing starts. More accurate for large aggregates than for individual products
finite forward scheduling
An equipment scheduling technique that builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits.
A Gantt chart may be used with this technique
finite loading
Assigning no more work to a work center than what the work center can be expected to execute in a given time period
five focusing steps
In Theory of Constraints.
Process to continuously improve organizational profit.
Evaluating production system and market mix to determine how to make the most profit using the system constraint.
1) Identify the constraint
2) Decide how to exploit the constraint
3) Subordinate all nonconstraints to the constraint
4) Elevate constraint to the system
5) Return to step 1 if constraint is broken without allowing inertia to set in
five Ss
Used to create a workplace suitable for lean production– sort, simplicity, scrub, standardize, sustain
fixed overhead
All manufacturing costs that stay constant regardless of the quantity of a product produced.
fixed-position manufacturing
Product remains in one location for its full assembly period
Might move before finished but only after considerable work/time is spent on it
Mostly used for large, complex projects
flow manufacturing
Work flows through each work station’s dedicated equipment at a nearly constant rate.
2 types = repetitive (line) & continuous.
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.
fluctuation inventory
Inventory that is carried as a cushion to protect against forecast error
forward scheduling
Scheduling technique starting with known start date and computes completion date for an order (usually from first operation to the last)
four Ps of marketing
Marketing tools to direct the business offering to the customer – product, price, place, promotion
Gantt chart
The earliest type of planning and control chart.
Designed to show graphically the relationship between planned performance and actual performance over time.
Named after it’s originator, Henry L. Gantt
gemba
A Japanese word meaning “shop floor”
genchi genbutsu
Japanese phrase meaning to visit the shop floor to observe what is occurring
general and administrative expenses (G&A)
Category of expenses on an income statment including costs of general managers, computer systems, research/development, etc
green reverse logisitics
The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals
gross margin
Difference between total revenue and cost of goods sold
gross requirement
The total demand for a component before factoring in the on-hand inventory and scheduled receipts.
hansei
Japanese word meaning reflection
heijunka
In Just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales
histogram
one of seven Tools of Quality.
Graph of contiguous vertical bars representing frequency distribution for groups or classes.
Groups/classes on x-axis, frequency on the y-axis
hoshin planning
Breakthrough planning.
A Japanese strategic planning process in which a company develops up to four vision statements that indicate where the company should be in the next five years.
Company goals and work plans are developed based on the vision statements. Periodic audits are then conducted to monitor progress
hosin
Japenese word meaning statement of objectives
idle capacity
The available capacity that exists on nonconstraint resources beyond the capacity required to support the constraint
income statement
Financial statment showing the net income for a business over a given period of time
indented bill of material
Form of multilevel BOM. Highest-level parents in left margins, all components go indented towards the right.
infinite loading
Calculation of capacity requires at work centers for given time periods regardless of capacity available to perform the work
input/output control (I/O)
Capacity control technique.
Planned inputs and actual inputs are closely monitored to determine when work center output might vary due to not enough input work available.
Also compare planned output vs actual output to identify work center problems
intermittent production
A form of manufacturing in which jobs pass through the functional departments in lots. Each lot may have a different routing.
internal failure costs
Costs relating to problems before the product reaches the customer
EX: Rework, scrap, downgrades, re-inspection
internal setup time
Time associated with elements fo a setup procedure preformed while the process or machine is not running
intrinsic forecast method
Forecast based on internal factors such as average past sales
inventory accuracy
When on-hand quantity is within an allowed tolerance of the recorded balance.
Usually measured as percent of items with inventory levels that fall within tolerance
inventory ordering system
Inventory models for the replenishment of inventory.
For example– fixed reorder cycle, fixed order quantity, optional replenishment, material requirement planning, kanban, drum-buffer-rope
inventory turnover
Number of time that an inventory cycles or “turns over” during the year.
Divide annual cost of sales by the average inventory level
jidoka
The Japanese term for the practice of stopping the production line when a defect occurs
jishuken
A Japanese word meaning voluntary study groups
job costing
A cost accounting system in which costs are assigned to specific jobs.
The system can be used with either actual or standard costs in the manufacturing of distinguishable units or lots of products
job shop
1) Organization where similar equipment is grouped by function.
2) Type of manufacturing process used to produce items to each customer’s specs. Production operations designed to handle wide range of product designs using general-purpose equipment
kanban
Method of just-in-time using standard container or lot sizes with a single card attached to each.
Work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers
key performance indicator (KPI)
A financial or nonfinancial measure that is used to define and assess progress toward specific organizational goals. Strategic, Tactical, Operative
landed cost
Cost of the product + cost of logistics (warehousing, transportation, handling fees)
lead-time offset
A technique used in MRP where a planned order receipt in one time period will require the release of that order in an earlier time period based on the lead time for the item
lean production
Philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. Focuses on continuous improvement and employee involvement.
lean six sigma
Combines the seven wastes of lean and the DMAIC process of six sigma. Awards recognition of competence through judo-style belts
