Vocab 2

Question 1

economic order quantity (EOQ)

Answer 1

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

Question 2

enterprise resources planning (ERP)

Answer 2

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.

Question 3

external failure costs

Answer 3

Costs associated with defects found after the customer receives the product or service

Question 4

external setup time

Answer 4

The time associated with elements of a setup procedure performed while the process or machine is running

Question 5

extrinsic forecasting method

Answer 5

Forecast method using a correlated leading indicator.

For example furniture sales based on housing starts. More accurate for large aggregates than for individual products

Question 6

finite forward scheduling

Answer 6

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

Question 7

finite loading

Answer 7

Assigning no more work to a work center than what the work center can be expected to execute in a given time period

Question 8

five focusing steps

Answer 8

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

Question 9

five Ss

Answer 9

Used to create a workplace suitable for lean production– sort, simplicity, scrub, standardize, sustain

Question 10

fixed overhead

Answer 10

All manufacturing costs that stay constant regardless of the quantity of a product produced.

Question 11

fixed-position manufacturing

Answer 11

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

Question 12

flow manufacturing

Answer 12

Work flows through each work station’s dedicated equipment at a nearly constant rate.

2 types = repetitive (line) & continuous.

Question 13

flow shop

Answer 13

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.

Question 14

fluctuation inventory

Answer 14

Inventory that is carried as a cushion to protect against forecast error

Question 15

forward scheduling

Answer 15

Scheduling technique starting with known start date and computes completion date for an order (usually from first operation to the last)

Question 16

four Ps of marketing

Answer 16

Marketing tools to direct the business offering to the customer – product, price, place, promotion

Question 17

Gantt chart

Answer 17

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

Question 18

gemba

Answer 18

A Japanese word meaning “shop floor”

Question 19

genchi genbutsu

Answer 19

Japanese phrase meaning to visit the shop floor to observe what is occurring

Question 20

general and administrative expenses (G&A)

Answer 20

Category of expenses on an income statment including costs of general managers, computer systems, research/development, etc

Question 21

green reverse logisitics

Answer 21

The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals

Question 22

gross margin

Answer 22

Difference between total revenue and cost of goods sold

Question 23

gross requirement

Answer 23

The total demand for a component before factoring in the on-hand inventory and scheduled receipts.

Question 24

hansei

Answer 24

Japanese word meaning reflection

Question 25

heijunka

Answer 25

In Just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales

Question 26

histogram

Answer 26

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

Question 27

hoshin planning

Answer 27

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

Question 28

hosin

Answer 28

Japenese word meaning statement of objectives

Question 29

idle capacity

Answer 29

The available capacity that exists on nonconstraint resources beyond the capacity required to support the constraint

Question 30

income statement

Answer 30

Financial statment showing the net income for a business over a given period of time

Question 31

indented bill of material

Answer 31

Form of multilevel BOM. Highest-level parents in left margins, all components go indented towards the right.

Question 32

infinite loading

Answer 32

Calculation of capacity requires at work centers for given time periods regardless of capacity available to perform the work

Question 33

input/output control (I/O)

Answer 33

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

Question 34

intermittent production

Answer 34

A form of manufacturing in which jobs pass through the functional departments in lots. Each lot may have a different routing.

Question 35

internal failure costs

Answer 35

Costs relating to problems before the product reaches the customer

EX: Rework, scrap, downgrades, re-inspection

Question 36

internal setup time

Answer 36

Time associated with elements fo a setup procedure preformed while the process or machine is not running

Question 37

intrinsic forecast method

Answer 37

Forecast based on internal factors such as average past sales

Question 38

inventory accuracy

Answer 38

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

Question 39

inventory ordering system

Answer 39

Inventory models for the replenishment of inventory.

For example– fixed reorder cycle, fixed order quantity, optional replenishment, material requirement planning, kanban, drum-buffer-rope

Question 40

inventory turnover

Answer 40

Number of time that an inventory cycles or “turns over” during the year.

Divide annual cost of sales by the average inventory level

Question 41

jidoka

Answer 41

The Japanese term for the practice of stopping the production line when a defect occurs

Question 42

jishuken

Answer 42

A Japanese word meaning voluntary study groups

Question 43

job costing

Answer 43

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

Question 44

job shop

Answer 44

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

Question 45

kanban

Answer 45

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

Question 46

key performance indicator (KPI)

Answer 46

A financial or nonfinancial measure that is used to define and assess progress toward specific organizational goals. Strategic, Tactical, Operative

Question 47

landed cost

Answer 47

Cost of the product + cost of logistics (warehousing, transportation, handling fees)

Question 48

lead-time offset

Answer 48

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

Question 49

lean production

Answer 49

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.

Question 50

lean six sigma

Answer 50

Combines the seven wastes of lean and the DMAIC process of six sigma. Awards recognition of competence through judo-style belts