APICS Exam 01 -- Production and Inventory Management Flashcards

Terms Definitions
ABC classification
Classification of a group of items in decreasing order of annual dollar volume or other criteria
What are the typical groupings and percentages of ABC classification
The typical groupings of ____ are:A: 10 - 20% #, 50 - 70% $B: 20% #, 20% $C: 60 - 70% #, 10 - 30% $
Accessibility (Transportation)
Facility with which a carrier provides service from one point to another
Accessibility (Warehousing)
The ability to get to and within the point of storage easily
Actual costs
The labor (L), material (M), and associated overhead (OH) costs that are charged against a job as it moves through the production process
Advance ship notice (ASN)
An electronic date interchange (EDI) notification of shipment of product
Aesthetics
A dimension of product quality that intends to appeal to the senses
Aggregate forecast
An estimate of sales, often time-phased, fr a grouping of products or product families produced by a facility or firm.
What is the purpose of the Aggregate forecast
The ____, stated in terms of units, dollars, or both, is used for sales and production planning (or for sales and operations, S&OP, planning) purposes
Andon
1) An electronic board that provides visibility of floor status and supplies information to help coordinate the efforts to linked work centers;2) A visual signaling system
What are the different signals and meanings of an Andon
In a ____, signal lights are green (running), red (stop), and yellow (needs attention)
Anticipation inventories
Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations
Assemble-to-order
A production environment where a good or service can be assembled after receipt of a customer's order.
What are some of the major concepts of Assemble-to-order
In ____:1) the key components (bulk, semi-finished, intermediate, etc) used in the assemble or finishing process are planned and usually stocked in anticipation of customer order2) Receipt of an order initiates assembly of the customized product3) Useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components
Assembly line
An assembly process in which equipment and work centers are laid out to follow the sequence in which raw material and parts are assembled
Assets
An accounting/financial term representing the resources owned by a company, whether tangible or intangible
What are examples of tangible Assets? Intangible Assets?
Examples of ____ are cash and inventoriesExamples of ____ are patents and goodwill
What are the two ranges of Assets
____ may be:1) Short-term horizon (such as cash, A/R, and inventory)2) Long-term value (equipment, land, buildings)
Assignable cause
A source of variation in a process that can be isolated, especially when its significantly larger magnitude or different origin readily distinguishes it from random causes of variation
Automated storage/retrieval system (AS/RS)
A high-density, rack inventory storage system with vehicles automatically loading and unloading the racks
Available inventory
The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called "beginning available balance"
Available-to-promise (ATP)
The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. The ___ quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled.
What is included in the first period of ATP
In the first period, ____ includes on-hand inventory less customer orders that are due and overdue
What are the three main methods of calculating ATP
The three main methods of calculating ___ are:1) Discrete ____2) Cumulative ____, with look-ahead3) Cumulative ____, without look-ahead
Average cost per unit
The estimated total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced
Average inventory
One-half the average lot size plus the safety stock, when demand and lot sizes are expected to be relatively uniform over time.
What are the two ways to calculate Average inventory?
The two ways to calculate ____ are:1)When demand and lot size are uniform: average of several observations taken over several historical time periods2) When demand and lot size are not uniform: stock level versus time is graphed to determine average
Backflush
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 BOM and allocation records.
What is a major disadvantage of Backflush inventory method?
A major disadvantage of the ____ inventory method is the built-in differential between the book record and what is physically in stock
Backhauling
The process of a transportation vehicle returning from the original destination point to the point of origin
What did the 1980 Motor Carrier Act due in relation to Backhauling
The ____ Act deregulated interstate commercial trucking and thereby allowed carriers to contract for the return trip
What are the three types of Backhauling?
The three types of ____ are full, partial, and empty (deadhead)
Deadhead
The return of an empty transportation container to its point of origin
Backlog
All of the customer orders received but not yet shipped. Sometimes referred to as open orders or the order board
Back scheduling
A technique for calculating operation start and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation
Backorder
An unfulfilled customer order or commitment. A ____ is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand
Balance sheet
A financial statement showing the resources owned, the debts owed, and the owner's share of a company at a given point in time
Balancing the line
In repetitive Just-in-Time production, matching actual output cycle times of all operations to the demand or use for parts as required by final assembly and, eventually as quired by the market
Bar code
A series of alternating bars and spaces printed or stamped on parts, containers, labels, or other media, representing encoded information that can be read by electronic readers
What is a use of a Bar code?
____ are used to facilitate timely and accurate input of data to a computer system
Batch (Basic definition)
A quantity scheduled to be produced or in production
Batch (for discrete products)
For ____ products, the ____ is planned to be the standard batch quantity, but during production, the standard batch quantity may be broken into smaller lots
Batch (for non-discrete products)
For ____ products, the ____ is a quantity that is planned to be produced in a given time period based on a formula or recipe that often is developed to produce a given number of end items
Batch (manufacturing process)
____ is a type of manufacturing process used to produce items with similar designs and that may cover a wide range of order volumes. Typically, items ordered are of a repeat nature, and production may be for a specific customer order or for stock replenishment
Batch picking
A method of picking orders in which order requirements are aggregated by produce across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are consructed
Bias
A consistent deviation from the mean in one direction (high or low). A normal property of a good forecast is that it is not biased
Billing and collection costs
In transportation, the costs related to issuing invoices or bills. These amounts can be reduced by combining shipments in an order to limit transportation frequency
Bill of lading (BOL)
A carrier's contract and receipt for goods the carrier agrees to transport from one place to another and to deliver to a designated person. In case of loss, damage, or delay, the ____ is the basis for filing freight claims
Bill of materials (BOM)
1) A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly2) A list of all the materials needed to make one production run of a product, by a contract manufacturer, of piece parts/components for its customersAKA: formula, recipe, ingredients list
What is a use of the Bill of Materials (BOM)
The ____ is used in conjunction with the master production schedule (MPS) to determine the items for which purchase requisitions and production orders must be released
What are some display formats for Bills of materials (BOMs)?
Some display formats for ____ are:1) Single-level ____2) Indented ____3) Modular (planning) ____4) Transient ____5) Matrix ____6) Costed ____
Blanket purchase order
A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often ____ cover only one item with predetermined dates
Bonded warehouse
Builders or parts of builders designated by the U.S. Secretary of Treasury for storing imported merchandise, operated under U.S. Customs supervision
Bottleneck
A facility, function, department, or resource whose capacity is less than the demand placed upon it. For example, a ____ machine or work center exists where jobs are processed at a slower rate than they are demanded
Break-bulk
Dividing truckloads of homogeneous items into smaller, more appropriate quantities for use
Buffer (basic definition)
A quantity of materials awaiting further processing. Can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center
Buffer (theory of constraints)
In the Theory of constraints, ____ can be time or material and support throughput and/or due date performance. ____ can be maintained at the constraint, convergent points (with a constraint part), divergent points, and shipping points
Buffer management
A process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers)
What are some benefits of Buffer management in Theory of constraints (TOC)
By expediting material into buffers, ____ system helps avoid idleness at the constraint and missed customer due dates. In addition, the causes of items missing from the buffer are identified, and the frequency of occurrence is used to prioritize improvement activities
Bullwhip effect
An exterme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain
How can the Bullwhip effect be eliminated?
The ____ can be eliminated by synchronizing the supply chain
Business plan
A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow statements.
How is a Business plan created and structured?
1) A ____ is usually stated in terms of dollars and grouped by product family2) It is then translated into synchronized tactical functional plans through the production planning process3) Though frequently stated in different terms (dollars vs. units), these tactical plans should agree with each other and the ____
Business plan (entrepreneurship)
A document consisting of the business details (organization, strategy, and financial tactics) prepared by an entrepreneur to plan for a new business
Capacity available
The capacity of a system or resource to produce a quantity of output of a particular time period
Capacity control
The process of measuring production output and comparing it with the capacity plan, determining if the variance exceeds pre-established limits, and taking corrective action to get back on plan if the limits are exceeded
Capacity management
The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules
What are the four levels at which Capacity management is executed?
The four levels at which ____ is executed are:1) Resource requirements planning2) Rough-cut capacity planning (RCCP)3) Capacity requirements planning (CRP)4) Input/output control
Capacity required
The capacity of a system or resource needed to produce a desired output in a particular time period
Capacity Requirements Planning (CRP)
The function of establishing, measuring, and adjusting limits or levels of capacity. The term ____ in this context refers tot he process of determining in detail the amount of labor and machine resources required to accomplish the tasks of production
How is Capacity requirements planning (CRP) determined?
Open shop orders and planned orders in the MRP system are input to ____, which through the use of parts routing and time standards translates these orders into hours of work by work center by time period
How may Rough-cut capacity planning (RCCP) and Capacity requirements planning (CRP) differ
Even though ____ may indicate that sufficient capacity exists to execute the MPS, ____ may show that capacity is insufficient during specific time periods
Carrying cost
The cost of holding inventory, usually defined as a percentage of the dollar value of inventory per unit of time (generally one year). ____ is ultimately a policy variable reflecting the opportunity cost of alternative uses for funds invested in inventory
What are the determinates of Carrying cost?
The determinates of ____ are:1) Cost of capital invested (biggest factor)2) Taxes3) Insurance4) Obsolescence5) Spoilage6) Space occupied
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.AKA: cash proceeds, cash generated
Cause-and-effect diagram
A tool for analyzing process dispersion. Illustrates the main causes and subcauses leading to an effect (symptom)AKA: Ishikawa diagram, fishbone diagram
Cellular manufacturing
A manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell
Center
In statistics, values near the middle of results from a process
Centralized inventory control
Inventory decision making for all stockkeeping units exercised from one office or department for an entire company
Central storage
Using a central location for storing all inventory items in order to obtain more control of inventory and to improve inventory record accuracy
Certified supplier
A status awarded to a supplier who consistently meets predetermined quality, cost, delivery, financial, and count objectives. Incoming inspection may not be required
Chance variation
Variation in a process results occurring because of numerous small factors such as workers, equipment, raw material, work methods, and environmental differences
Chase production method
A production planning method that maintains a stable inventory level while varying production to meet demand
Closed-loop MRP
A system built around material requirements planning (MRP) that includes the additional planning processes of production planning (S&OP), master production scheduling (MPS), and capacity requirements planning (CRP). The term ____ implies not only that each of these processes is included in the overall system, but also that feedback is provided by the execution processes so that the planning can be kept valid at all times
Common carrier
Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. A ____ must obtain a certificate of public convenience and necessity from the FTC for interstate traffic
Common causes
Causes of variation that are inherent in a process over time. They affect every outcome of the process and everyone working in the process
Competitive advantage
The advantage a company has over its rivals in attracting customers and defending against competitors. Sources of the advantage include characteristics that a competitor cannot duplicate without substantial cost and risk, such as manufacturing technique, brand name, or human skill set
Component
The raw material, part, or subassembly that goes into a higher level assembly, compound, or other item. May also include packaging materials for finished items
Consignment
1) A shipment that is handled by a common carrier2) The process of a supplier placing goods at a customer location without receiving payment until after goods are used or sold
Constraint (process engineering)
Any element or factor that prevents a system from achieving a higher level of performance with respect to its goal. Can be physical, such as a machine center or lack of material, or managerial, such as a policy or procedure
Constraint (optimization)
One of a set of equations that cannot be violated in an optimization procedure
Consumer
A person who purchases a good or service for his or her own use (not for resale)
Continuous production
A production system in which the productive equipment is organized and sequenced according to the steps involved to produce the product. This term denotes that material flow is continuous during the production process. The routing of jobs is fixed and setups are seldom changed
Continuous replenishment
A process by which a supplier is notified daily of actual sales or warehouse shipments or commits to replenish these sales without stockouts, and without receiving replenishment orders
What is a result of Continuous replenishment?
A result of ____ is a lowering of associated costs and an improvement in inventory turnover
Contract carrier
A carrier that does not service the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract
Control chart
A graphic comparison of process performance data with predetermined computed control limits. The process performance data usually consist of groups of measurements selected in regular sequence of production that preserve the order. One of the seven tools of quality
What is the primary use control charts?
The primary use of ____ is to detect assignable causes of variation in the process as opposed to random variations
Convergent point
An operation in a production process where multiple materials/parts/components are combined into a single component.EX: An assembly operation
Cost equalization point (CEP)
A point or quantity at which the cost curves of two manufacturing methods have an equal value
Cost of goods sold (COGS)
An accounting classification useful for determining the amount of direct materials (DM), direct labor (DL), and allocated overhead (OH) associated with the products sold over a given period of time
Cost of poor quality
The costs associated with providing poor quality products or services
What are the four categories of Costs of poor quality?
The four categories of costs of ____ are:1) Internal failure costs2) External failure costs3) Appraisal costs4) Prevention costs
Internal failure costs (Cost of poor quality)
Costs associated with defects found before the customer receives the product or service
External failure costs (Cost of poor quality)
Costs associated with defects found after the customer receives the product or service
Appraisal costs (Cost of poor quality)
Costs incurred to determine the degree of conformance to quality requirements
Prevention costs (Cost of poor quality)
Costs incurred to keep failure and appraisal costs to a minimum
Cost trade-off
Considering the advantages and disadvantages of one method to another, such as different avenues of distribution or providing customer service
Count frequency
The number of times an item in inventory is counted during a period of time. Generally, high-value inventories are counted more frequently than low-value items, although properties other than value can influence the frequency
Critical chain method
In the Theory of constraints (TOC), a network planning technique for the analysis of a project's completion time, used for planning and controlling project activities. The critical chain, which determines project duration, is based on technological and resource constraints. Strategic buffering of paths and resources is used to increase project completion success
Critical path method (CPM)
A network planning technique for the analysis of a project's completion time used for planning and controlling the activities of a project. By showing each of these activities and their associated times, the critical path, which identifies those elements that actually constrain the total time for the project, can be determined
Cross-docking
The concept of packing products on the incoming shipment so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination. The items are carried from the incoming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse. ____ requires inventory investment and storage space requirements
Cumulative lead time
The longest planned length of time to accomplish the activity in question
How do you determine the Cumulative lead time?
The ____ is found by reviewing the lead time for each BOM path below the item; whichever path adds up to the greatest number defines the ____
Customer (basic definition)
A person or organization receiving a good, service, or information
Customer (in project management)
Every project has a ____ who may be internal or external to the organization and who is responsible for the final project acceptance
Customer relationship management (CRM)
A marketing philosophy based on putting the customer first. The collection and analysis of information designed for sales and marketing decision support (as contrasted to enterprise resources planning information) to understand and support existing and potential customer needs. It includes account management, catalog and order entry, payment processing, credits and adjustment, and other functions
Customer service (ability)
The ability of a company to address the needs, inquiries, and requests from customers
Customer service (measurement)
A measure of the delivery of a product to the customer at the time the customer specified
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. Most effective ____ systems require the counting of a certain number of items every workday with each item counted at a prescribed frequency
What is the key purpose of Cycle counting?
The key purpose of ____ is to identify items in error, thus triggering research, identification, and elimination of the cause of the errors
Cycle stock
One of the two main conceptual components of any item inventory, the ____ is the most active component; the ____ depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received. The other conceptual component of item inventory is safety stock
What are the two main conceptual components of any item inventory?
The two main conceptual components of any ____ are:1) Cycle stock2) Safety stock
Cycle time (industrial engineering)
The time between completion of two discrete units of productionEX: The ____ of 120 units/hr would be 30 secs
Cycle time (materials management)
Refers to the length of time from when material enters a production facility until it exits
Decentralized inventory control
Inventory decision making exercised at each stocking location for SKUs at that location
Decoupling inventory
An amount of inventory kept between entities in a manufacturing or distribution network to create independence between processes or entities
What is the objective of decoupling inventory?
The objective of ____ is to disconnect the rate of use from the rate of supply of the item
Delivery lead time
The time from the receipt of a customer order to the delivery of the product
Demand
A need for a particular product or component. The ____ could come from any number of sources.
At the finished goods level, what is the difference between demand data and sales data?
At the finished goods level, ____ data is usually different from ____ because ____ does not necessarily result in ____.EX: If there is no stock, there will be no sale
What are the four components of Demand?
The four components of ____ are:1) Cyclical component2) Random component3) Seasonal component4) Trend component
Demand lead time
The amount of time potential customers are willing to wait for the delivery of a good or a service
Demand (basic definition)
The function of recognizing all demand for gods and services to support the marketplace. It involves prioritizing demand when supply is lacking.
What does proper Demand management facilitate?
Proper ____ facilitates the planning and use of resources for profitable business results
Demand management (marketing)
The process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services to bring about transactions that meet organizational and individual needs
Demand pull
The triggering of material movement to a work center only when that work center is ready to begin the next job. In effect, it shortens or eliminates the queue from in front of a work center, but it can cause a queue at the end of the previous work center. Demand pull can also occur within a supply chain, in which case it often is called a demand chain
Demonstrated capacity
Proven capacity calculated from actual performance data, usually expressed as the average number of items produced multiplied by the standard hours per item
Demurrage
The carrier charges and fees applied when rail freight cards and ships are retained beyond a specified loading or unloading time
Density
A measure of the weight of an item compared to its volume. Because ____ can influence the number of units that can be carried by a particular truck, this is a factor in defining transportation charges
Dependent demand
Demand that is directly related to or derived from the bill of material (BOM) structure for other items or end products. Such demands are therefor calculated and need not and should not be forecast. A given inventory item may have both dependent and independent demand at any given time
Describe how a given inventory item may have both Dependent and Independent demand
A part may simultaneously be the component of an assembly (____ demand) and sold as a service part (____ demand)
Deshi
A Japanese word meaning student
Detention
Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time
Direct labor (DL)
Labor that is specifically applied to the good being manufactured or used in the performance of the service
Direct material (DM)
Material that becomes a part of the final product in measurable quantities
Discrete manufacturing
The production of distinct items such as automobiles, appliances, or computers
Discrete order picking
A method of picking orders in which the items on one order are picked before the next order is picked
Dispatching
The selection and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers
Distribution
The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. It includes all activities related to physical ____, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses
Distribution (secondary definition)
The systematic division of a whole into discrete parts having distinctive characteristics
What are some of the functions that are encompassed by Distribution activities?
The activities of ____ encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management
Distribution center (DC)
A warehouse with finished goods and/or service items. ____ is synonymous with the term "branch warehouse", although the former has become more commonly used recently. When a warehouse serves a group of satellite warehouses, it is usually called a regional ____
Distribution channel
The distribution route, from raw materials through consumption, along which products travel
Distribution cost
Those items of cost related to the activities associated with the movement and storage of finished products
What are some examples of Distribution costs?
Some examples of ____ include inventory costs, transportation costs, and order processing costs
Distribution inventory
Inventory, usually spare parts and finished goods, located in the distribution system (in warehouses, in-transit between warehouses and the customers)
Distribution requirements planning (DRP)
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 system (MPS). Demand on the supplying sources is recognized as dependent, and standard MRP logic applies
Distribution requirements planning (DRP) (more general definition)
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
Distribution warehouse
A facility that receives items in large lots, stores them temporarily, and breaks them into smaller lots destined for a variety of locations
Distributor
A business that does not manufacture its own products, but purchases and resells these products. Such a business usually maintains a finished goods inventory
Dock-to-stock
A program by which specific quality and packaging requirements are met before the product is released. Prequalified product is shipped directly into the customer's inventory. ____ eliminates the costly handling of components, specifically in receiving and inspection and enables products to move directly into production
Dojo
A Japanese word meaning "hall"
Drop shop
To take the title of the product but not actually handle, stock, or deliver itEX: to have one supplier ship directly to another or to have a supplier ship directly to the buyer's customer
Drum-buffer-rope (DBR)
The theory of constraints (TOC) method for scheduling and managing operations that have an internal constraint or capacity-constrained resource
Drum schedule
The detailed production schedule for a resource that sets the pace for the entire system. The ____ must reconcile the customer requirements with the systems' constraint(s)
Due date
The date when purchased material or production material is due to be available for use
Duty-free zone
An area where merchandise is brought into the country for further work to be done. Duty is paid only on the items brought in, normally at a lower rate than finished goods, and paid only at the time of sale
Economic order quantity (EOQ)
A type of fixed order quantity model that determines the total amount of an item to be purchased or manufactured at one time
What is the intent of Economic order quantity (EOQ)?
The intent of ____ is to minimize the combined costs of acquiring and carrying inventory
What is the basic formula of Economic order quantity (EOQ)?
The basic formula of ____ is:quantity = √((2AS)/iC)A: annual usage in unitsS: ordering costs in dollarsi: annual inventory carry cost rateC: unit cost
Efficiency
A measurement of the actual output to the standard output expected. Efficiency measures how well something is performing relative to existing standards; in contrast, productivity measures output relative to a specific input
What are three examples of of the ratio of Efficiency?
Three examples of the ratio of ____ are:1) Actual units produced to the standard rate of production expected in a time period2) Standard hours produced to actual hours worked (taking longer means less ____)3) Actual dollar volume of output to a standard dollar volume in a time period
80-20
A term relating to the Pareto principle. The principle suggests that most effects come from relatively few causes; that is, ____ percent of the effects come from ____ percent of the possible causes
Electronic data interchange (EDI)
The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices (ASNs), and invoices, using standardized document formats
Employee empowerment
The practice of giving non-managerial employees the responsibility and the power to make decisions regarding their jobs or tasks. It is associated with the practice of transfer of managerial responsibilities to the employee. ____ allows the employee to take on responsibility for tasks normally associated with staff specialists
Employee involvement (EI)
The concept of using the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and including them and their ideas in decision-making processes appropriate to their areas of improvement
On what does Employee involvement (EI) focus?
____ focuses on quality and productivity improvements
Engineer-to-order
Products whose customer specifications require unique engineering design, significant customization, or new purchased materials. Each customer order results in a unique set of part numbers, bills of material (BOM), and routings
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
Excess capacity
Capacity that is not used to either produce or protect the creation of throughput
Excess inventory
Any inventory in the system that exceeds the minimum amount necessary to achieve the desired throughput rate at the constraint or that exceeds the minimum amount necessary to achieve the desired due date performance
What is the Total inventory equation?
____ = Productive inventory + protective inventory + excess inventory
Expedite
To rush or chase production or purchase orders that are needed in less than the normal lead time; to take extraordinary action because of an increase in relative priority
Explode
To perform a bill-of-materials (BOM) explosion
External setup time
The time associated with elements of a setup procedure performed while the process or machine is running
Extrinsic forecasting method
A forecasting method on a correlated leading indicator, such as estimating furniture sales based on housing starts. ____ tend to be useful for large aggregations, such as total company sales, than for individual product sales
Field service
The functions of installing and maintaining a product for a customer after the sale or during the lease. ____ may also include training and implementation assistance
Final assembly schedule (FAS)
A schedule of end items to finish the product for specific customers' orders in a make-to-order (MTO) or assemble-to-order (ATO) environment. It is also referred to as the finishing schedule because it may involve operations other than the final assembly (EX: final mixing, cutting, packaging). The ___ is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked to the end-item level
Finished goods inventory
Those items on which all manufacturing operations, including final test, have been completed. These products are available for shipment to the customer as either end items or repair parts
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 the work center can be expected to execute in a given time period. The specific term usually refers to a computer technique that involves calculating shop priority revisions in order to level load operation by operation
Firm planned order (FPO)
A planned order that can be frozen in quantity and time. the computer is not allowed to change it automatically; this is the responsibility of the planner in charge of the item that is being planned. This technique can aid planners working with MRP systems to respond to material and capacity problems by firming up selected planned orders. In addition, ____ are the normal method of stating the master production schedule (MPS)
Fishbone analysis
A technique to organize the elements of a problem or situation to aid in the determination of the causes of the problem or situation. The analysis relates the effect of the environment to the several possible sources of the problem
Five focusing steps
In the Theory of constraints (TOC), a process to continuously improve organizational profit by evaluating the production system and market mix to determine how to make the most profit using the system constraint
What are the Five focusing steps?
The ____ are:1) Identifying the constraint to the system2) Deciding how to exploit the constraint to the system3) Subordinating all non constraints to the constraint4) Elevating the constraint to the system5) Returning to Step 1 if the constraint is broken in any previous step, while not allowing inertia to set in
Five Ss
Five terms beginning with "S" used to create a workplace suitable for lean production.
What are the 5 S's (English)
The ____ are:1) Sort2) Simplify3) Scrub4) Standardize5) Sustain
What are the 5 S's (Japanese)
The ____ are:1) Seiri2) Seiton3) Seiso4) Seiketsu5) Shitsuke
Sort (5 S's)
To separate needed items from unneeded ones and remove the latter
Simplify (5 S's)
To neatly arrange items for use
Scrub (5 S's)
Clean up the work area
Standardize (5 S's)
To sort, simplify, and scrub daily
Sustain (5 S's)
To always follow the first 4 S's
Five whys
The common practice in Total quality management is to ask "why" five times when confronted with a problem. By the time the answer to the fifth "why" is found, the ultimate cause of the problem is identified
Fixed-location storage
A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location system, ____ become familiar, and therefore a locator file may not be needed
Fixed order quantity
A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof, if net requirements for the period exceed the ____
Fixed overhead
Traditionally, all manufacturing costs--other than Direct labor (DL) and Direct materials (DM)--that continue even if products are not produced. Although ____ is necessary to produce the product, it cannot be directly traced to the final product
Fixed-position manufacturing
Similar to project manufacturing, this type of manufacturing is mostly used for large, complex projects, where the product remains in one location for its full assembly period or may move from location to location after considerable work and time are spent on it.EX: Shipbuilding, aircraft assembly
Flowchart
The output of a flowcharting process, a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. One of the seven tools of quality
Why are Flowcharts used?
____ are drawn to better understand processes
Flow processing
A system in which work flows over a stationary path, usually with little variance in the rate of flow. This is known as repetitive manufacturing if discrete units are produced, and otherwise is referred to as continuous manufacturing
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 ____ is often referred to as a mass production shop or is said to have a continuous manufacturing layout. The plant layout is designed to facilitate a product "flow". Some process industries are extreme examples of ____. Each product, through 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
Fluctuation inventory
Inventory that is carried as a cushion to protect against forecast error
Fluctuation inventory
Inventory that is carried as a cushion to protect against forecast error
Forecast
An estimate of future demand. Various techniques attempt to predict one or more of the four components of demand
What are the three ways a Forecast can be constructed?
A ____ can be constructed using:1) Quantitative methods2) Qualitative methods3) Combination
What are the four components of Demand?
The four components of ____ are:1) Cyclical2) Random3) Seasonal4) Trend
Forecast error
The difference between actual demand and forecast demand, stated as an absolute value or as a percentage
Forward buying
The practice of buying materials in a quantity exceeding current requirements but not beyond the point that the long-term need exists
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
Four P's
A set of marketing tools to direct the business offering to the customer
What are the 4 P's?
The ____ are:1) Product2) Price3) Place4) Promotion
14 Points
W. Edward Deming's 14 management practices to help companies increase their quality and productivity
What are the 14 Points?
The ____ are:01) Create constancy of purpose for improving products and services02) Adopt the new philosophy03) Cease dependence on inspection to achieve quality04) End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier05) Improve constantly and forever every process for planning, production, and service06) Institute training on the job07) Adopt and institute leadership08) Drive out fear09) Break down barriers between staff areas10) Eliminate slogans, exhortations, and targets for the workforce11) Eliminate numerical quotas for the workforce and numerical goals for management12) Remove barriers that rob people of pride in workmanship and eliminate the annual rating or merit system13) Institute a vigorous program of education and self-improvement for everyone14) Put everybody to work to accomplish the transformation
Free on board (FOB)
The terms of sale that identify where title passes to the buyer
Freight consolidation
The grouping of shipments to obtain reduced costs or improved utilization of the transportation function
What are the three ways Freight consolidation can occur?
The three ways ____ can occur are:1) Market area grouping2) Grouping according to scheduled deliveries3) Using third-party pooling services such as public warehouses and freight forwarders
Functional layout
A facility configuration in which operations of a similar nature or function are grouped together; an organization structure based on departmental specialty (EX: saw, lathe, mill, press)
GAAP (Generally accepted accounting practices)
Accounting practices that conform to conventions, rules, and procedures that have general acceptability by the accounting profession
G&A (General and administrative expenses)
The category of expenses on an income statement that includes the costs of general managers, computer systems, research and development, and more
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 it's originator, Henry L. Gantt
What are the two reasons for which a Gantt chart is used?
The two reason why a ____ is used are:1) Machine loading: one horizontal line is used to represent capacity and another is used to represent load against that capacity2) Monitoring job progress: one horizontal line represents the production schedule and another parallel line represents the actual progress of the job against the schedule in time
Gemba
A Japanese word meaning "shop floor"
Genchi genbutsu
A Japanese phrase meaning "visit the shop floor to observe what is occurring"
General-purpose machinery
Manufacturing resources that can perform several kinds of operations
Green reverse logistics
The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals
Gross margin
The difference between total revenue and the Costs of goods sold (COGS)
Gross requirement
The total of independent and dependent demand for a component before the netting of on-hand inventory and scheduled receipts
GTS
Grasps the situation
Hansei
A Japanese word meaning "reflection"
Hedge inventory
A form of inventory buildup to buffer against some event that may not happen. ____ planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company's strategic initiatives. Risk and consequence are unusually high, and top management approval is often required
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
A graph of contiguous vertical bars representing a frequency distribution in which the groups or classes of items are marked on the x-axis and the number of items in each class is indicated on the y-axis. The pictorial nature lets people see patterns that are difficult to see in a simple table of numbers
Hoshin
A Japanese word meaning "statement of objectives"
Hoshin kanri/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
Idle capacity
The available capacity that exists on nonconstraint resources beyond the capacity required to support the constraint
What are the two components of Idle capacity?
The two components of ____ are:1) Protected capacity2) Excess capacity
Idle inventory
The inventory generally not needed in a system of linked resources
From a Theory of Constraints (TOC) perspective, what are two things of which idle inventory consists?
From a Theory of constraints (TOC) perspective, what are two components of ____:1) Protective inventory2) Excess inventory
Income statement
A financial statement showing the net income for a business over a given period of time
Independent demand
The demand for an item that is unrelated to the demand for other items
What are some examples of Independent demand?
Some examples of ____ are:1) Finished goods2) Parts required for destructive testing3) Service parts requirements
Industrial trucks
Material handling devices used in warehouses. Unlike conveyors, ____ are not confined to a fixed route
Infinite loading
Calculation of the capacity required at work centers int eh time period regardless of the capacity required to perform the work
Input/output control (I/O)
A technique for capacity control where planned and actual inputs and planned and actual outputs of a work center are monitored
Inspection
Measuring, examining, testing, or gauging one or more characteristics of a product and comparing the results with specified requirements to determine whether conformity is achieved for each characteristic
Intermittent production
A form of manufacturing in which the jobs pass through the functional departments in lots, and each lot may have a different routing
Intermodal transport
1) Shipments moved by different types of equipment combining the best features of each mode2) The use of two or more different carrier modes in the through movement of a shipment
Internal setup time
The time associated with elements of a setup procedure performed white the process or machine is not running
Interplant demand
One plant's need for a part or product that is produced by another plant or division within the same organization. Although it is not a customer order, it is usually handled by the master production scheduling system in a similar manner
Interplant demand
One plant's need for a part or product that is produced by another plant or division within the same organization. Although it is not a customer order, it is usually handled by the master production scheduling system in a similar manner
In-transit inventory
Material moving between two or more locations, usually separated geographically
Intrinsic forecast method
A forecast based on internal factors, such as an average of past sales
Inventory
Those stocks or items used to support production (raw materials and WIP), supporting activities (MRO), and customer service (finished goods and spare parts).
Inventory (Theory of constraints)
All the money currently tied up in the system. ____ refers to the equipment, fixtures, buildings, and so forth that the system owns-as well as in the form of raw materials, WIP, and finished goods
Inventory accounting
The branch of accounting dealing with valuing inventory. Inventory may be recorded or valued using a perpetual or periodic system
Describe the differences between a Perpetual and Periodic inventory record
A ____ record is updated frequently or in real time, while a ____ record is counted or measured at fixed time intervals
Inventory adjustment
A change made to an inventory record to correct the balance, to bring it in line with actual physical inventory balances.
What does an Inventory adjustment do?
A ____ either increases or decreases the item record on-hand balance
Inventory buffer
Inventory used to protect the throughput of an operation or the schedule against the negative effects caused by delays in delivery, quality problems, delivery of incorrect quantity, etc
Income control
The activities and techniques of maintaining the desired level of items, whether raw materials, WIP, or finished goods
Inventory issue
1) Items released from an inventory location for use or sale2)The inventory record transaction reducing the inventory balance by the amount released
Inventory management
The branch of business management concerned with planning and controlling inventories
Inventory ordering system
Inventory models for the replenishment of inventory. Independent demand inventory ordering models include
What are the 6 steps in the House of Quality?
The 6 steps in the ____ are:1) Identify customer requirements2) Identify supporting technical design requirements3) Compare customer requirements to the technical design requirements and assign relationship ratings4) Assign importance to the customer requirements 5) Evaluate competitors6) Identify technical features to be deployed in the final design of the product
Inventory returns
Items returned to the manufacturer as defective, obsolete, overages, and so forth. An inventory item record transaction records the return or receipt into physical stores of materials from which the item may be scrapped
Inventory turnover
The number of times that an inventory cycles, or "turns over" during the year
ISO 9000:2000
A certification process requiring a third-party audit that defines, in broad terms, what must be done to manage company quality and to document these quality processes.
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
An organization in which similar equipment is organized by function. each job follows a distinct routing through the shop
Job shop scheduling
The production planning and control techniques used to sequence and prioritize production quantities across operations in a job shop
Just-in-Time (JIT)
A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity
What are the primary elements of Just-in-Time?
The primary elements of ____ are:1) To only have the required inventory when needed2) To improve quality to zero defects3) To reduce lead times by reducing set up times, queue lengths, and lot sizes4) To incrementally revise the operations themselves5) To accomplish all of these activities at minimum cost
Kaizen
The Japanese term for improvement; continuing improvement involving everyone-managers and workers
Kaizen (manufacturing)
Finding and eliminating waste in machinery, labor, or production methods
Kanban
A method of JIT production taht uses standard containers or lot sizes with a single card attached to each. It is a pull system in which 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, either tactical or strategic, that is linked to specific strategic goals or objectives
Landed cost
This cost includes the product cost plus the cost of logistics, such as warehousing, transportation, and handling fees
Leading indicator
A specific business activity index that indicates future trends
Lead time
A span of time required to perform a process (or series of operations)
Lead time (logistics)
The time between recognition of the need for an order and the receipt of the goods
What are some of the individual components of Lead time?
Some of the individual components of ____ are:1) Preparation time2) Queue time3) Processing time4) Move or transportation time5) Receiving and inspection time
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
A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise
Level of service
A measure of satisfying demand through inventory or by the current production schedule in time to satisfy the customers' requested delivery dates and quantities
How is Level of service calculated in a Make-to-stock environment?
In a ____ environment, Level of service is calculated as:1) The percentage of orders picked complete from stock upon receipt of the customer order2) The percentage of line items picked complete3) The percentage of total dollar demand picked complete
How is Level of service calculated in Make-to-order and Engineer-to-order environments?
In ____ environments, Level of service is the percentage of times the customer-requested or acknowledged date was met by shipping complete product quantities
Level schedule (traditional management)
A production schedule or MPS that generates material and labor requirements that are as evenly spread over time as possible. Finished goods inventories buffer the production system against season demand
Level schedule (JIT)
Each day's customer demand is scheduled to be built on the day it will be shipped. A ____ is the output of the load-leveling process
Liabilities
An accounting/financial term representing debts or obligations owed by a company to creditors
Limited access
Securing inventory, usually in a locked environment, to protect it from theft and to help improve inventory count accuracy
Line-haul costs
Within physical distribution, cost elements that vary by distance traveled and not by weight carried
Load
The amount of planned work scheduled for actual work released to a facility, work center, or operation for a specific span of time. Usually expressed in terms of standard hours of work or, when items consume similar resources at the same rate, units of production
Load leveling
Spreading orders out in time or rescheduling operations sot hat the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable
Logistics
The art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities
Lot
A quantity produced together and sharing the same production costs and specifications
Lot control
A set of procedures used to maintain lot integrity from raw materials, from the supplier through manufacturing to consumers
Lot-for-lot
A lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period
Lot size
The amount of a particular item that is ordered from the plant or a supplier or issued as a standard quantity to the production process
Lot-size inventory
Inventory that results whenever quantity price discounts, shipping costs, setup costs, or similar considerations make it more economical to purchase or produce in larger lots than are needed for immediate purposes
Machine flexibility
In work-cell design, choosing between general-purpose machinery versus special-purpose machinery, so that the lowest cost and most adaptability is achieved
Maintenance, repair, and operating supplies (MRO)
Items used in support of general operations and maintenance such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations
Make-or-buy decision
The act of deciding whether to produce an item internally or buy it from an outside supplier
What are some factors to consider in the Make-or-buy decision?
Some factors to consider in the ____ decision are:1) Costs2) Capacity availability3) Proprietary and/or specialized knowledge4) Quality considerations5) Skill requirements6) Volume7) Timing
Make-to-order
A production environment where a good or service can be made after receipt of a customer's order
Make-to-stock
A production environment where products can be and usually are finished before receipt of a customer order
Manufacturing calendar
A calendar used in inventory and production planning functions that consecutively numbers only the working days so that the component and work order scheduling may be done based on the actual number of workdays available
Manufacturing lead time
The total time required to manufacture an item, exclusive of lower level purchasing lead time
Manufacturing order
A document, group of documents, or schedule conveying authority for the manufacture of specified parts or products in specified quantities
Manufacturing philosophy
The set of guiding principles, driving forces, and ingrained attitudes that helps communicate goals, plans, and policies to all employees and that is reinforced through conscious and subconscious behavior within the manufacturing organization
Manufacturing process
The series of operations performed upon material to convert it from the raw material or a semi-finished state to a state of further completion
What are the 4 ways that a Manufacturing process can be laid out?
The 4 ways that a ____ can be laid out are:1) Process layout2) Product layout3) Cellular layout4) Fixed-position layout
Manufacturing resource planning (MRP II)
A method for the effective planning of all resources of a manufacturing company
Market driven
Responding to customers' needs
Marketing research
The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services
What are the 3 types of Market research, and about what is each concerned?
The 3 types of ____ are:1) Market analysis: the study of the size, location, nature, and characteristics of markets2) Sales analysis: systematic study and comparison of sales data3) Consumer research: the discovery and analysis of consumer attitudes, reactions, and preferences
Marketing strategy
The basic plan marketing expects to use to achieve its business and marketing objectives in a particular market
What are the parts of the Marketing plan?
The parts of the ____ are:1) Marketing expenditures2) Marketing mix3) Marketing allocation
Market share
The actual portion of current market demand that a company or product achieves
Mass customization
The creation of a high-volume product with large variety so that a customer may specify an exact model out of a large volume of possible end items while manufacturing cost is low due to large volume
Master planning
A group of business processes that includes the following activities:1) Demand management2) Production and resource planning3) Master scheduling
Master production schedule (MPS)
A line on the master schedule grid that reflects the anticipated build schedule for those items assigned to the master scheduler. It represents what the company plans to produce expressed in specific configurations, quantities, and dates
Master schedule
A format that includes time periods, the forecast, customer orders, projected available balance (PAB), ATP, and the MPS
What are some of things that the Master schedule takes into account?
Some of the things that the ____ takes into account are:1) The forecast2) The production plan3) Backlog4) Availability of resources5) Availability of capacity6) Management policies and goals
Materials requirements planning (MRP)
A set of techniques that uses bill of materials (BOM) data, inventory data, and the MPS to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase
Beginning with the items listed on the MPS, what does time-phased MRP determine?
Beginning with the items listed on the MPS, the ____ determines:1) The quantity of all components and materials required to fabricate those items2) The date that the components and material are required
How is time-phased MRP accomplished?
____ is accomplished by:1) Exploding the BOM2) Adjusting for inventory quantities on hand or on order3) Offsetting the net requirements by the appropriate lead times
Materials handling
The movement of items from one point to another inside a facility or between facilities
Materials management
The grouping of management functions supporting the complete cycle of material flow, from the purchase and internal control of production materials to the planning and control of WIP to the warehousing, shipping, and distribution of the finished product
Mean absolute deviation (MAD)
The average of th absolute values of the deviations of observed values from some expected value
Mental mode
A paradigm of how the world works formed by a person's experiences and assumptions
Milk run
A regular route for pickup of mixed loads from several suppliers
Min-max system
A type of order point replenishment system where the min is the order point, and the max is the "order up to" inventory level
Mixed-model production
Making several different parts or products in varying lot sizes sot hat a factory produces close tot eh same mix of products that will be sold that day
What is the goal of Mixed-model production?
The goal of ____ is to build every model every day, according to daily demand
Modularization
Using the same set of components in a variety of finished goods
Move time
The time that a job spends in transit from one operation to another in the plant
Muda
Waste; in lean manufacturing, costs are reduced by reducing waste within a system
What are the 7 categories of Muda (waste)?
The 7 categories of ____ are:1) Overproduction (excess or too early)2) Waiting3) Transportation (unneeded movements)4) Processing5) Motion (activities that do not add value)6) Inventory7) Defective units
Multilevel bill of material (BOM)
A display of all of the components directly or indirectly used in a parent, together with the quantity required of each component
Multisourcing
Procurement of a good or service from more than one independent supplier
Mura
A Japanese word meaning unevenness or variability
Muri
A Japanese word meaning strain or overburden
Nemawashi
A Japanese word meaning getting a group to agree on a strategy before beginning to implement it
Nesting
The act of combining several small processes to form one larger process
Net requirements
In MRP, the ____ for a pat or an assembly are derived as a result of applying gross requirements and allocations against inventory on hand, scheduled receipts, and safety stock
One-card kanban system
A kanban system where only a move card is employed. Typically, the work centers are adjacent, therefore no production card is required
100% inspection
The act of inspecting or testing every item as an incoming or outgoing lot
On-hand balance
The quantity shown in the inventory records as physically being in stock
On-time schedule performance
A measure (percentage) of meeting the customer's originally negotiated delivery request date
Open order
A released manufacturing order or purchase order; an unfulfilled customer order
Operating expense
All the money an organization spends in generating "goal units"
Operations management
The planning, scheduling, and control of the activities that transform inputs into finished goods and services
Operations process charts
A chart that represents the sequence of work or the nature of events in process. It serves as a basis for examining and possibly improving the way the work is carried out
Operator flexibility
Machine operators having the flexibility to solve problems and to do other tasks beyond their immediate responsibilities
Order entry
The process of accepting and translating what a customer wants into terms used by the manufacturer or distributer. The commitment should be based on the ATP line in the master schedule.
Ordering cost
Used in calculating order quantities, the costs that increase the number of orders placed increases
What are some of the costs related to Ordering costs?
Some of the costs related to ____ are:1) Preparing orders2) Releasing orders3) Monitoring orders4) Receiving orders5) Physical handling of goods6) Inspections7) Set up costs
Order picking
Selecting or "picking" the required quantity of specific products for movement to a packaging area and documenting that the material was moved from one location to shipping
Order point
A set inventory level where, if the total stock on hand plus on order falls to or below that point, action is taken to replenish the stock
Order processing and communication
All activities needed to fill customer orders
Order promising
The process of making a delivery commitment (IE: Answering "when can you ship?")
Order qualifiers
Those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace
Order winners
Those competitive characteristics that cause a firm's customers to chose that firm's goods and services over those of its competitors. ____ can be considered a competitive advantage for the firm
What are some strategic initiatives on which an Order winner can focus?
Some strategic initiatives on which ____ can focus are:1) Price/cost2) Quality3) Delivery speed4) Delivery reliability5) Product design6) Flexibility7) After-market service8) Image
Outsourcing
The process of having suppliers provide goods or services that were previously provided internally
Overhead
The costs incurred in the operation of a business that cannot be directly related to the individual goods or services produced
Owner's equity
An accounting/financial term representing the residual claim by the company's owners or shareholders, or both, to the company's assets less its liabilities
Pacemaker
In lean the philosophy is to produce at the market rate of consumption. Because lines cannot be perfectly balanced, the ____ is the resource requiring the longest time to produce among the set of activities in a line or cell. This operation determines the flow through the line or cell
What is the formula for Order point?
OP = DDLT + SS
Planning bill of material
An artificial grouping of items or events in the BOM format used to facilitate master scheduling and master planning. It does not represent a buildable product, but is used to simplify forecasting, master production scheduling, and MRP
What is the book example for Planning BOM?
The book example for ____ is a bicycle, with:Color30% Blue30% Red40% WhiteSize25% Small50% Medium25% Large
House of quality
A structured process that related customer-defined attributes to the product's technical features needed to support and generate those attributes
Package to order
A production environment in which a good or service can be packaged after receipt of a customer order. The item is common across many different customers; packaging determines the end product
Packaging
Materials surrounding an item to protect it from damage during transportation. The type of ____ influences the danger of such damage
Pallet positions
A calculation of the space needed to store a certain number of pallets
Parent item
The item produced from one or more components
Pareto diagram/chart
A graphical tool for ranking causes from most significant to least significant. One of the seven tools of quality
Partnering
The act of one organization committing to a long-term relationship with another organization based on trust and a shared concept of how to satisfy the customer
Pegging
In MRP and MPS, the capability to identify for a given item the sources of its gross requirements and/or allocations. ____ can be thought of as active where-used information
Periodic replenishment
A method of aggregating requirements to place deliveries of varying quantities at evenly spaced time intervals, rather than variably spaced deliveries of equal quantities
Period order quantity
A lot-sizing technique under which the lot size is equal to the net requirements for a given number of periods
Perishability
The fact that an item has a limited shelf life and may be fragile or require special handling
Perpetual inventory record
A computer record or manual document on which each inventory transaction is posted so that a current record of the inventory is maintained
Physical inventory
Determination of inventory quantity by actual count
Physical inventory
Determination of inventory quantity by actual count
What are the 3 types of Physical inventories
The 3 types of ____ are:1) Continuous2) Periodic3) Annual
Physical supply
The transportation of goods from supplier to buyer
Picking list
A document that lists the material to be picked for manufacturing or shipping orders
Pickup and delivery costs
Transportation costs based on the number of pick ups and the weight of the cargo
Pipeline stock
Inventory in the transportation network and the distribution system, including the flow through intermediate stocking points
What are some examples of flow time factors that influence the amount of Pipeline stock?
Some flow time factors that influence the amount of ____ are:1) Order transmission2) Order processing3) Scheduling4) Shipping5) Transportation6) Receiving7) Stocking
Plan-do-check-action (PDCA)
A four-step process for quality improvements.AKA: Shewhart cycle, Deming circle
Planned order
A suggested order quantity, release date, and due date created by the planning system's logic when it encounters net requirements in processing MRP
What are the 2 inputs to Capacity requirements planning, and what do they show?
The 2 inputs to ____ are:1) Planned orders2) Released ordersThese both show the total capacity requirements by work center in future time periods
Planned order receipt
The quantity planned to be received at a future date as a result of a planned order release. ____ differ from scheduled receipts in that they have not been released
Planned order release
A row on an MRP table that is derived from planned order receipts by taking the planned receipt quantity and offsetting to the left by the appropriate lead time
Planning horizon
The amount of time a plan extends into the future
For a Master schedule, how long is the Planning horizon usually set?
For a Master schedule, the ____ is usually 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 of key suppliers
For a longer term plans, how long is the Planning horizon usually set?
For longer term plans, the ____ must be long enough to permit any needed additions to capacity
Point of sale (POS)
The relief of inventory and computation of sales data at the time and place of sale, generally through the use of bar coding or magnetic media and equipment
Post deduct
In a JIT system, WIP materials used to build finished goods are relieved from inventory by multiplying the number of units completed by the number of parts in the BOM
Postponement
A product design strategy that shifts product differentiation closer to the consumer by postponing identity changes, such as assembly or packaging, to the last possible supply chain location
Prevention costs
The costs caused by improvement activities that focus on the reduction of failure and appraisal costs
What are some examples of Prevention costs?
Some examples of ____ are:1) Education2) Quality training3) Supplier certification
Preventive maintenance
The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdown
What is the purpose of Preventive maintenance?
The purpose of ____ is to ensure that production quality is maintained and that delivery schedules are met. In addition, a machine that is well cared for will last longer and cause fewer problems
Price
One of the four P's that constitute the set of tools used to direct the business offerings to the customer. ____ is the amount charged for the product offering
What must the Price that is set take into account?
The ____ set must take into account:1) Competition2) Substitute products3) Internal business costs to return a desirable product margin
Priority control
The process of communicating start and completion dates to manufacturing departments in order to execute a plan
What is the tool normally used to provide start and completion dates and priorities, for Priority control, and upon what is it based?
The Dispatch list is the tool normally used to provide start and completion dates and priorities for ____, and it is based on the current plan and status of all open orders
Priority planning
The function of determining what material is needed and when. MPS and MRP are the elements used for the planning and replanning process to maintain proper due dates on required materials
Private carrier
A group that provides transportation exclusively within an organization
Process
A planned series of actions or operations that advances a material or procedure from one stage of completion to another
Process batch
The quantity or volume of output that is to be completed at a workstation before switching to a different type of work or changing an equipment setup
Process flexibility
The speed and ease with which the manufacturing transformation tasks can respond to internal or external changes
Process flow diagram
A graphic, symbolic representation of the work performed, or to be performed, on a product as it passed through some or all of the stages of a process
What information is typically included on a Flow process chart?
The information typically included on a ____ is:1) Quantity2) Distance moved3) Type of work done (by symbol)4) Equipment used5) Work times (sometimes)
Procurement
The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations
Procurement lead time
The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials
When does Procurement lead time begin and when does it end?
____ begins when a decision has been made to accept an order to produce a new product, and ends when production commences
Product
Any good or service produced for sale, barter, or internal use
Product (marketing, 4 P's)
One of the 4 P's that constitute the set of tools for directing the business offering to the customer. The ____ can be promoted as a distinctive item
Product cost
Cost allocated by some method to the products being produced. Initially recorded in asset (inventory) accounts, product costs become an expense (cost of sales) when the product is sold
Product differentiation
A strategy of making a product distinct from the competition on a nonprice basis such as availability, durability, quality, or reliability
Product family
A group of products with similar characteristics, often used in production planning (or S&OP)
Production activity control (PAC)
The function of routing and dispatching the work to be accomplished through the production facility and of performing supplier control
What does Production activity control (PAC) encompass, and for what is it needed?
____ encompasses the principles, approaches, and techniques needed to schedule, control, measure, and evaluate the effectiveness of production operations
Production line
A series of pieces of equipment dedicated to the manufacture of a specific number of products or families
Production plan
The agreed-upon plan that comes from the production planning (S&OP) process, specifically the overall level of manufacturing output planned to be produced, usually stated as a monthly rate for each product family
Production planning
A process to develop tactical plans based on setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned level of sales (sales planes or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc as expressed in the overall business plan
Production planning methods
The approach taken in setting the overall manufacturing output to meet customer demand by setting production levels, inventory levels, and backlog
What are the 3 Production planning methods
The 3 ____ are:1) Chase2) Level3) Hybrid
Productive capacity
In the Theory of constraints (TOC), the inventory required to meet production requirements without allowances for unplanned delays
Productivity
An overall measure of the ability to produce a good or a service. It is the actual output of production compared to the actual input of resources. ____ is a relative measure across time or against common entities (labor, capital, etc)
Product layout
Layout of resources arranged sequentially based on the product's routing
Product life cycle
The stages a new product goes through from beginning to end
What are the 5 stages in the Product life cycle?
The 5 stages in the ____ are:1) Introduction2) Growth3) Maturity4) Decline5) Phase-out
Introduction (Product life cycle)
In the ____ stage of the Product life cycle, products are designed and introduced with sales promotion and advertising. Costs can be high at this stage
Growth (Product life cycle)
In the ____ stage of the Product life cycle, the product becomes accepted, production increases, and unit cost drops. Consumption may arise in this stage
Maturity (Product life cycle)
In the ____ stage of the Product life cycle, the product is well-established in the marketplace. Competing products exist. Some products are in perpetual ____, such as steel and milk
Decline (Product life cycle)
In the ____ stage of the Product life cycle, sales volumes decline and profits are reduced. Organizations may introduce new products or improve production methods to reduce costs
Phase-out (Product life cycle)
In the ____ stage of the Product life cycle, the product is taken off the market. Advertising and promotions are discontinued, production ends, and sales and support may be outsourced
In the Introduction stage of the Product life cycle, which Production Environments are found?
In the ____ stage of the Product life cycle, the following Production environments are found:1) ETO2) MTO
In the Growth stage of the Product life cycle, which Production Environments are found?
In the ____ stage of the Product life cycle, the following Production environments are found:1) MTO2) ATO3) MTS4) MC
In the Maturity stage of the Product life cycle, which Production Environments are found?
In the ____ stage of the Product life cycle, the following Production environments are found:1) MTO2) ATO3) MTS4) MC
In the Decline stage of the Product life cycle, which Production Environments are found?
In the ____ stage of the Product life cycle, the following Production environments are found:1) MTO2) ATO
In the Phase-out stage of the Product life cycle, which Production Environments are found?
In the ____ stage of the Product life cycle, the following Production environments are found:1) MTO
Product mix
The proportion of individual products that make up the total production or sales volume. Changes in the ____ can mean drastic changes in the manufacturing requirements for certain types of labor and material
What are the 3 types of Profit?
The 3 types of ____ are:1) Gross2) Operating3) Net
Gross profit
Earnings from an ongoing business after direct costs of goods sold (COGS) have been deducted from sales revenue for a given period
Operating profit
Earnings or income after all expenses (selling, administrative, depreciation) have been deducted from gross profit
Net profit
Earnings or incoming after adjusting for miscellaneous income and expenses (parent royalties, interest, capital gains) and tax from profit
Profit margin
The difference between the sales and Cost of goods sold (COGS) for an organization, sometimes expressed as a percentage of sales
Project
An endeavor with a specific objective to be met within predetermined time and dollar limitations and that has been assigned for definition or execution
Projected available balance (PAB)
An inventory balance projected into the future. The running sum of on-hand inventory minus requirement plus scheduled receipts and planned orders
Protective capacity
The resource capacity needed to protect system throughput-ensuring that some capacity above the capacity required to exploit the constraint is available to catch up when disruptions inevitably occur
Protective inventory
In the Theory of constraints (TOC) the amount of inventory required relative to the protective capacity in the system to achieve a specific throughput rate at the constraint
Protective packaging
Protecting items by surrounding them with impact absorbing material. The protected package must be small enough to be transported and stored
Public warehouse
The warehouse space that is rented or leased by an independent business providing a variety of services for a fee or on a contract basis
Pull system (production)
The production of items only as demanded for use or to replace those taken for use
Pull system (material control)
The withdrawal of inventory as demanded by the using operations. Material is not issued until a signal comes from the user
Pull system (distribution)
A system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant
Purchase order
The purchaser's authorization used to formalize a purchase transaction with a supplier
When given to a supplier, what should a Purchase order contain?
When given to a supplier, a ____ should contain statements of:1) The name2) Part number3) Quantity4) Description5) Price of goods or services ordered6) Terms as to payment7) Discounts8) Dates of performance9) Transportation
Purchase requisition
An authorization to the purchasing department to purchase specified materials in specific quantities within a specified time
Purchasing
The term used in industry and management to denote the function of and the responsibility for procuring materials, supplies, and services
Purchasing lead time
The total lead time required to obtain a purchased item
What is included in Purchasing lead time?
Included in ____ are:1) Order preparation and release time2) Supplier lead time3) Transportation time4) Receiving, inspection, and put-away time
Push system (production)
The production of items at times required by a given schedule planned in advance
Push system (material control)
The issuing of material according to a given schedule or issuing material to a job order at its start time
Push system (distribution)
A system for replenishing field warehouse inventories where replenishment decision making is centralized, usually at the manufacturing site or central supply facility
Quality
Conformance to requirements or fitness for use
What are the 5 principle approaches to Quality
The 5 principle approaches to ____ are:1) Transcendent quality is an ideal, a condition of excellence2) Product-based quality is based on a product attribute3) User-based quality is fitness for use4) Manufacturing-based quality is conformance to requirements5) Value-based quality is the degree of excellence at an acceptable price
What are the 2 components of Quality?
The 2 components of ____ are:1) ____ of conformance: defined by the absence of defects2) ____ of design: measured by the degree of customer satisfaction with a product's characteristics and features
Quality at the source
A producer's responsibility to provide 100% acceptable quality material to the consumer of the material
What is the objective of Quality at the source?
The objective of ____ is to reduce or eliminate shipping or receiving inspections and line stoppages as a result of supplier defects
Quality control
The process of measuring quality conformance by comparing the actual with a standard for the characteristic and acting on the difference
Quality costs
The overall costs associated with prevention activities and the improvement of quality throughout a firm before, during, and after production of a product
What are the 4 costs of Quality?
The 4 ____ are:1) Internal failure2) External failure3) Appraisal4) Preventative
Internal failure costs
Costs relating to problems before the product reaches the customerEX: Rework, scrap, downgrades, reinspection
External failure costs
Costs relating to problems found after the product reaches the customerEX: Warranties, returns
Appraisal costs
Costs associated with the formal evaluation and audit of quality in the firmEX: Inspection, quality audits, testing, calibration, checking time
Prevention costs
Costs that are caused by improvement activities that focus on reducing failure and appraisal costsEX: Education, quality training, supplier certification
Quantity discounts
A price reduction allowance determined by the quantity or value of a purchase
Queue
A waiting line. In manufacturing, the jobs at a given work center waiting to be processed. As ____ increase, so do average queue time and WIP inventory
Quick changeover
Having a small setup time in order to have small production batches and small WIP inventory
Radio frequency identification (RFID) tag
A system of using electronic tags to store data about items. Accessing these data is accomplished through a specific radio frequency and does not require close proximity or line-of-site access for data retrieval
Random-location storage
A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom
What is the drawback and benefit of Random-location storage
Although ____ method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method
Random variation
A fluctuation in data that is caused by uncertain or random occurrences
Rated capacity
The expected output capability of a resource or system. Capacity is traditionally calculated from data such as planned hours, efficiency, and utilization
Raw material
Purchased items or extracted materials that are converted via the manufacturing process into components and parts
Receiving
The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the PO (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports
Record accuracy
A measure of the conformity of recorded values in a bookkeeping system tot he actual values
Relevant costs
Those costs incurred because of a decision. The costs would not have resulted unless the decision was made and implemented
Remanufacturing
An industrial process in which worn-out products are restored to like-new condition. In contrast, a repaired product normally retains its identity and only those parts that have failed or badly worn are replaced ore serviced
Reorder quantity (fixed-reorder quantity system of inventory control)
The fixed quantity that should be ordered each time the available stock (on-hand plus on-order) falls to or below the reorder point
Reorder quantity (variable reorder quantity system of inventory control)
The amount ordered from time period to time period will vary
Repetitive manufacturing
The repeated production of the same discrete products or family of products
Replenishment lead time
The total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf, available for use
Request for quote (RFQ)
A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors
Requirements explosion
The process of calculating the demand for the components of a parent item by multiplying the parent item requirements by the component usage quantity specified in the BOM
Reserve stock
Safety stock
Resource planning
Capacity planning conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity
Retailer
A business that takes title to products and resells them to final consumers
Reverse auction
An internet auction in which suppliers attempt to underbid their competitors. Company identities are known only by the buyer
Reverse logistics
A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycle
Root cause analysis
Analytical methods to determine the core problem(s) of an organization, process, product, market, etc
Rough-cut capacity planning (RCCP)
The process of converting the MPS into requirements for key resources, including labor, machinery, warehouse space, suppliers' capacity, and money
What are the 3 approaches to performing RCCP?
The 3 approaches to performing ____ are:1) Bill of labor approach2) Capacity planning using overall factors approach3) Resource profile approach
Routing
Information detailing the method of manufacturing of a particular item
What does Routing include?
____ includes1) Operations to be performed2) The sequence of these operations3) The various work centers involved4) Standards for setup and run
Run time
The time required to process a piece or lot at a specific operation. ____ does not include setup time
Safety stock (general)
A quantity of stock planned to be in inventory to protect against fluctuations in demand or supply
Safety stock (Master production schedule)
The additional inventory and capacity planned as protection against forecast errors and short-term changes in the backlog. Overplanning can be used to create ____
Sales and operations planning (S&OP)
A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain
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
Sawtooth diagram
A quantity-versus-time graphic representation of the order point/order quantity inventory system showing inventory being received and then used up and reordered
Scatter chart
A graphical technique to analyze the relationship between two variables. Two sets of data are plotted on a graph, with the y-axis used for the variable to be predicted, and the x-axis used for the variable to make the prediction
Scatter plots
Scatter chart
Scheduled receipt
An open order that has an assigned due date
Scheduling
The act of creating a schedule, such as a shipping schedule, master production schedule, maintenance schedule, or supplier schedule
Scrap
Material outside of specifications and possessing characteristics that make rework impractical
Seasonal inventory
Inventory built up to smooth production in anticipation of a peak seasonal demand
Seasonality
A repetitive pattern of demand from year to year with some periods considerably higher than others
Sensei
A Japanese word meaning teacher or one with experience
Service
Sometimes used to describe those activities that support the production or distribution functions in any organizationEX: Customer service, field service
Service industry
An organization that provides an intangible product; all organizations except farming, mining, and manufacturing
Service parts
Those modules, components, and elements that are planned to be used without modification to replace an original part
Setup
The work required to change a specific machine, resource, work center, or line from making the last good piece of item A to making the first good piece of item B
Setup time
The time required for a specific machine, resource, work center, process, or line to convert from the production of the last good piece of item A to the first good piece of item B
Shape
An element of variability results that measures the output of a process. If a process results in product dimensions falling within a bell-shaped curve, then the process is running normally
Shingo's seven wastes
Shigeo Shingo, a pioneer of the Japanese JIT philosophy, identified seven barriers to improving manufacturing
What are Shingo's seven wastes?
____ are:1) Overproduction2) Motion3) Transportation4) Stocks5) Motion6) Making defects7) Processing itself
Shipping manifest
A document that lists the pieces in a shipment. A ____ usually covers an entire load regardless of whether the load is to be delivered to a single destination or many destination
What do Shipping manifests usually list?
____ usually list (for each destination in the load):1) Items2) Piece count3) Total weight4) Destination name and address
Simulation (MRP II)
Using the operational data to perform what-if evaluations of alternative plans
What two questions do Simulations answer?
___ answer the questions:1) "Can we do it?", if yes...2) "Do we really want to?" (does it make financial sense)
Single-level BOM
A display of components that are directly used in a parent item. It shows only the relationships one level down
Single-source supplier
A company that is selected to have 100% of the business for a part although alternative suppliers are available
Six sigma quality
A set of concepts and practices that key on reducing variability in processes and reducing deficiencies in the product
SMART
Simple, measurable, achievable, reasonable, and trackable
Sourcing
The process of identifying a company that provides a needed good or service
Specialization
Producing a limited product line in order to focus on a product or process. ____ is often intended to improve productivity or and reduce costs
Split lot
A manufacturing order quantity that has been divided into two or more smaller quantities, usually after the order has been released
What is the purpose of Split lot?
The purpose of ____ is to reduce the lead time of the order
Spread
Variability of an action. Often measured by the range of standard deviation of a particular dimension
Standard costs
The target costs of an operation, process, or product including direct materials, direct labor, and overhead charges
Standard time
The length of time that should be required to:1) Set up a given machine or operation and2) Run one batch or more of parts, assemblies, or end products through that operation
Start date
In project management, the time an activity begins; this may be defined as an actual ____ or a planned ____
Statistical process control (SPC)
The application of statistical techniques to monitor and adjust an operationAKA: Statistical quality control (SQC)
Stockkeeping unit (SKU)
An inventory item
Stockkeeping unit (SKU) (distribution system)
An item at a particular geographical location
Stockout costs
The costs associated with a stockout
What are examples of Stockout costs?
Examples of ____ are:1) Lost sales2) Backorder costs3) Expediting4) Additional manufacturing and purchasing costs
Stockout percentage
A measure of the effectiveness with which a company responds to actual demand or requirements
Store
A storage point located upstream of a work station intended to make it easier to see customer requirements
Strategic deployment
Hoshin planning
Strategic plan
The plan for how to marshal and determine actions to support the missions, goals, and objectives of an organization
Subcontracting
Sending production work outside to another manufacturer
Supermarket
A way of managing inventory and improving picking by making all parts easy to take off of a shelf; inventory is restocked in such a way that employees always have easy access
Supplier
Provider of goods or services; the seller with whom the buyer does business
Supplier certification
Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures procedures that relate tot he customers' requirements
Supplier lead time
The amount of time that normally elapses between the time an order is received by a supplier and the time the order is shipped
Supplier partnership
The establishment of a working relationship with a supplier organization whereby two organizations act as one
Supplier relationship management (SRM)
A comprehensive approach to managing an enterprise's interactions with the organizations that supply the goods and services the enterprises uses
What is the goal of SRM?
The goal of ____ is to streamline and make more effective the processes between an enterprise and its suppliers
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
Supply chain management
The design, planning, execution, control, and monitoring of supply chain activities
What are the objectives of Supply chain management?
The objectives of ____ are:1) Creating net value2) Building a competitive infrastructure3) Leveraging worldwide logistics4) Synchronizing supply with demand5) Measuring performance globally
Tactical plan
The set of functional plans synchronizing activities across functions that specify production levels, capacity levels, staffing levels, funding levels, and so on, for achieving the intermediate goals and objectives to support the organization's strategic plan
Takt time
Sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system
Tariff
An official schedule of taxes and fees imposed by a country on imports or exports
Terminal-handling costs
Charges based on the number of times a package is loaded or unloaded. These costs may be reduced by combining shipments
Terminals
A place where vehicles are loaded and unloaded. Several functions such as weighing cargo and rerouting cargo are performed at terminals
Terms and conditions
All the provisions and agreements of a contract
The New Seven
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Theory of constraints (TOC)
A holistic management philosophy developed by Dr. Eliyahu M. Goldratt that is based on the principle that complex systems exhibit inherent simplicity
Theory of constraints (TOC) accounting
A cost and managerial accounting system that accumulates costs and revenues into 3 areas:1) Throughput2) Inventory3) Operating expense
Theory of constraints performance measures
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Third-party logistics (3PL)
A buyer and supplier team with a third party that provided product delivery services
Third-party registration system
Using an outside party (rather than the buyer) to determine the adequacy of a seller's product quality
Throughput
The rate at which the system generates "goal units"
Time bucket
A number of days of data summarized into a columnar or row-wise display. A weekly time bucket would contain all of the relevant data for an entire week
What is considered to be the largest time bucket to permit effective MRP?
Weekly time buckets are considered to be the largest possible to permit effective ____
Time buffer
Protection against uncertainty that takes the form of time
Time fence
A policy or guidelines established to note where various restrictions or changes in operating procedures take place
Time-phased order point (TPOP)
MRP-like time planning logic for independent demand items, where gross requirements come from a forecast, not via explosion
Tolerances
Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle
Total cost curve (cost-volume profit)
In breakeven analysis, the ____ 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 interesect
Total cost curve (inventory theory)
The sum of the costs of acquiring and carrying the item
Total cost of ownership (TCO)
The sum of all costs associated with every activity of the supply chain. The acquisition cost is often a very small portion of the total cost of ownership
Total costs
All the costs of operating a firm; total variable costs plus total fixed costs
Total line-haul cost
The essential costs to move a freight cargo including driver's wages, and depreciation of the vehicle; these costs vary with the distance shipped
Total productive maintenance (TPM)
Preventative maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. It is operator-oriented maintenance with the involvement of all qualified employees in all maintenance activities
Total quality management (TQM)
Japanese-style management approach to quality improvement; a management approach to long-term success through customer satisfaction
Traceability
The registration and tracking of parts, processes, and materials used in production, by lot or serial number
Tracking signal
The ratio of the cumulative algebraic sum of the deviations between the forecasts and the actual values to the mean absolute deviation. Used to signal when the validity of the forecasting model might be in doubt
Traffic
A department or function charged with the responsibility for arranging the most economic classification and method of shipment for both incoming and outgoing materials and products
Transaction channel
A distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting
Transit inventory
Inventory in transit between manufacturing and stocking locations
Transit time
A standard allowance that is assumed on any given order for the movement of items from one operation to the next
Transportation
The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization
Transportation inventory
Inventory that is in transit between locations
Trend
General upward or downward movement of a variable over time
Trend forecasting models
Methods for forecasting sales data when a definite upward or downward pattern exists
What are some Trend forecasting models?
Some examples of ____ models are:1) Double exponential smoothing2) Regression3) Triple smoothing
Truckload carriers
Carriers that deliver/charge only for full truckload shipments
Two-bin inventory system
A type of fixed-order system in which inventory is carried in two bins. A replenishment quantity is is ordered when the first bin is empty
Two-card kanban system
A kanban system where a move card and production card are employed. The move authorizes the movement of a specific number of parts from a source to a point of use. The production card authorizes the production of a given number of parts for use or replenishment
U-lines
Production lines shaped like the letter "U". The shape allows workers to easily perform several non-sequential tasks without much walk time
Uniform plant loading
In lean, the distribution of work between work stations sot hat the time required for each station to complete all tasks is as close to equal as possible
Unit cost
Total labor, material, and overhead cost for one unit of production
Unitization (warehousing)
The consolidation of several units into larger units for fewer handlings
Unit loads
A unit to be transported that consists of several items arranged so the package can be moved as a single unit
Unit of measure
The unit in which the quantity of an item is managed
Upstream
Used as a relative reference within a firm or supply chain to indicate moving in the direction of the raw material supplier
Utilization
A measure of how intensively a resource is being used to produce a good or service. ____ compares actual time used to available time
Valid schedule
A detailed, feasible calendar of specific items flowing into and through a factory
Value added (manufacturing)
The actual increase of utility from the viewpoint of the customer as it is transformed from raw material to finished inventory
Value chain analysis
An examination of all links a company uses to produce and deliver its products and services, starting from the origination point and continuing through delivery to the final customer
Value stream
The process of creating, producing, and delivering a good or service to the market. The value stream may be controlled by a single business or a network of several businesses
Value stream (good)
Encompasses the raw material supplier, the manufacture and assembly of the good, and the distribution network
Value stream (service)
Consists of suppliers, support personnel and technology, the service "producer" and the distribution channel
Value stream map
A graph displaying the sequence of operations needed to produce and deliver a product or service
Value stream mapping
Drawing the current production process/flow and then attempting to draw the most effective production process/flow
Variable cost
An operating cost that varies directly with a change of one unit in the production volume
Variance
The difference between the expected (budgeted or planned) value and the actual
VAT analysis
In the Theory of constraints, a procedure for determining the general flow of parts and products from raw materials to finished products
V (VAT analysis)
Starts with one or a few raw materials, and the product expands into a number of different products as it flows through divergent points in its routings
A (VAT analysis)
A structure dominated by convergent points. Many raw materials are fabricated and assembled into a few finished products
T (VAT analysis)
A structure consisting of numerous similar finished products assembled from common assemblies, subassemblies, and parts
Vehicles
Carrying and power unit to move goods over ways. Includes all forms of transportation means except pipeline. The carrier generally owns or leases the ____, but a shipper may also own or lease
Velocity
The relative speed of all transactions, collectively, within a supply chain community
Why is a maximum Velocity desirable?
A maximum ____ is desirable because it indicates higher asset turnover for stockholders and faster order-to-delivery response for customers
Why is a maximum Velocity desirable?
A maximum ____ is desirable because it indicates higher asset turnover for stockholders and faster order-to-delivery response for customers
Vendor
Any seller of an item in the marketplace
Vendor-managed inventory (VMI)
A means of optimizing supply chain performance in which the supplier has access to the customer's inventory data and is responsible for maintaining the inventory level required by the customer
Visual review system
A simple inventory control system where the inventory reordering is based on actually looking at the amount of inventory on hand. Usually used for low-value items, such as nuts and bolts
Voice of the customer
Actual customer descriptions in words for the functions and features customers desire for goods and services
Wait time
The time a job remains at a work center after an operation is complete until it is moved to the next operation
Wall-to-wall inventory
An inventory management technique in which material enters a plant and is processed through the plant into finished goods without ever having entered a formal stock area
Warehousing
The activities related to receiving, storing, and shipping materials to and from production or distribution locations
Waste
Any activity that does not add value to the good or service in the eyes of the consumer
Wave picking
A method of selecting and sequencing picking lists to minimize the waiting time of the delivered material. Shipping orders may be picked in waves combined by common carrier or destination, and manufacturing orders in waves related to work centers
Waybill
A document containing a list of goods with shipping instructions related to a shipment
Ways
Paths over which a transportation company moves cargo, including right-of-way, roadbed, and railroad tracks. ____ may be publicly or privately owned
What-if analysis
The process of evaluating alternate strategies by answering the consequences of changes to forecasts, manufacturing plans, inventory levels, and so forth
Where-used list
A listing of every parent item that calls for a given component, and the respective quantity required, from a BOM file
Work cell
Dissimilar machines grouped together into a production unit to produce a family of parts having similar routings
Work center
A specific production area, consisting of one or more people and/or machines with similar capabilities, that can be considered as one unit for purposes of capacity requirements planning and detailed scheduling
Working stock
Stock located in a facility which is used to fulfill demand
Work in process (WIP)
A good or goods in various stages of completion throughout the plant, including all material from raw material that has been released for initial processing up to completely processed material awaiting final inspection and acceptance as finished goods inventory
Work order
An authorization to start work on an activity or product
Yield
The amount of good or acceptable material available after the completion of a process
Yokoten
A Japanese term meaning sharing information
Zone
A warehouse location methodology that includes some of the characteristics of fixed and random location methods
Zone picking
A method of subdividing a picking list by areas within a storeroom for more efficient and rapid order picking
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