Glossary--投资管理名词释义.doc

Glossary from the book Inventory Management Explained Also see the Glossary of Terms related to Inventory Management and Warehouse Operations at InventoryO80/20 rulea more specific version of the Pareto principle. 80/20 implies that 80% of effects are the result of 20% of causes. See also Pareto principle. ABC stratificationthe activity of applying a ranking system (A-B-C-D. . . ) to a characteristic. For example, ABC by times sold is frequently used to rank items based on how frequently they are sold. Action messagein MRP, DRP, and related planning systems, action messages are notifications to planners that an action needs to be taken. For example, a notification to release or reschedule an order. Adaptive smoothinga variation on exponential smoothing that uses a calculation based on forecast error to automatically change the smoothing factor.Advanced planning and schedulingAPS is a step beyond MRPII and is somewhat more difficult to define, but generally includes capabilities for finite capacity scheduling and reacting to rapidly changing demand.Advanced shipment notificationa document used to notify a customer of a shipment. ASNs will often include PO numbers, SKU numbers, lot numbers, quantities, and pallet, carton, or container numbers. ASNs may be paper based, however electronic notification is preferred. Advanced shipment notification systems are usually combined with bar coded compliance labeling that allows the customer to receive the shipment into inventory through the use of bar code scanners and automated data collection systems.Allocationsactual demand created by sales orders or production orders against a specific item. Anticipation inventoryanticipation inventory can be thought of as “capacity inventory” because it is usually the result of a buildup of inventory in order to meet demand during a period of time when demand exceeds capacity.APICSThe Association for Operations Management (previously known as American Production and Inventory Control Society). ASNSee advanced shipment notification.Availablerefers to the status of inventory as it relates to its ability to be sold or consumed. Availability calculations are used to determine this status. Availability calculations vary from system to system but basically subtract any current allocations or holds on inventory from the current on-hand balance. See also Allocations.Average forecast biasthe average of a series of forecast errors. See also Forecast error.Backflushmethod for issuing (reducing on-hand quantities) materials to a production order. With backflushing, the material is issued automatically when production is posted against an operation. The backflushing program will use the quantity completed to calculate through the bill of materials the quantities of the components used, and reduce on-hand balances by these quantities. Backordera quantity on an order that was not filled on the required date due to inadequate inventory levels.Best of breedthe term best of breed became widely used as people started realizing that certain modules within their software suite were inadequate to meet their needs, and started looking at separate software products to replace these modules. Software vendors, trade magazines, and consultants started using the term best of breed to categorize these highly functional, independent software modules (or sets of modules). The idea is that a single software suite cannot possibly have the best modules for every functional area of your business, therefore, rather than settling for the mediocre functionality in some modules just because you liked the functionality in other modules, you could build your system from the best modules from two or more software vendors.BiasSee Forecast bias.Bill of distributionSee DRP relationship.Bill of materialslists materials (components) required to produce an item. Multilevel BOMs also show subassemblies and their components. Other information such as scrap factors may also be included in the BOM for use in materials planning and costing. Commonly known as a BOM or just a Bill.Black-box forecastingan automated forecasting system that makes forecasting decisions without any human input.BOMSee Bill of materials.Bullwhip effecta phenomenon where demand variation becomes amplified as it progresses up through the supply chain. Its based on the assumption that an increase in demand at a low level in the supply chain will trigger a series of overreactions at each subsequent level in the supply chain. Bullwhip is often used as a teaching tool in demonstrating the “potential” problems of a disconnected supply chain.Capacitythe capabilities of a process, machine, location, or facility.Capacity requirements planningCRP is a capacity planning tool used to verify the ability of resources to meet scheduled production. CRP uses the routings to calculate loads on work centers, and then compares these loads to the capacity of these work centers. CRP is more detailed than either rough-cut capacity planning or resources requirements planning. Carrying coststhe costs associated with having specific quantities of inventory. Carrying costs primarily include the cost of the inventory investment and the costs associated with storing the inventory. Carrying costs are used in cost-based lot sizing calculations such as EOQ.CheatsI use this term to describe mathematical calculations designed to provide a particular wanted result, but the means of getting that result may not be mathematically correct or even logical. In some cases these cheats are used because a mathematically correct means of getting the result is impractical due to significant data requirements, processing limitations, or a lack of mathematical knowledge by those setting up the system. In other cases, there simply is no mathematically correct means of getting the result. Cheats (as I describe them) are not necessarily bad things. In fact, they can be very useful and even necessary in inventory management. My point in referring to them as cheats, is to make it very clear that there likely is a lack of preciseness associated with them and they may even be completely wrong (or wrong for your application). COGSSee Cost of goods sold.Collaborative planningdescribes a planning strategy where trading partners (customers and suppliers) share their inventory planning data. Commodity classificationSee Inventory classificationComponentany item used to produce another item. Composite forecasta forecast that is created by combining (through averaging or weighted averaging) the results of multiple forecasting methods.Configuration processingsoftware functionality that allows a product to be defined by selecting various pre-defined options rather than having every possible combination of options pre-defined as specific SKUs. Placing an order for a computer and specifying hard drive, processor, memory, graphics card, sound card, etc. would be an example of configuration processing.Configure-to-ordermanufacturing strategy that exists somewhere between make-to-stock and make-to-order. In this strategy, all or most components are stocked in anticipation of customer orders. Partial processingsuch as production of subassembliesis often done in advance of customer orders. All that remains are the final assembly or final processing activities. Consignment inventoryinventory that is in the possession of the customer, but is still owned by the supplier. The supplier places some of his inventory in his customers possession (in their store, warehouse, or plant) and allows them to sell or consume directly from his stock. The customer purchases the inventory only after he has resold or consumed it. Cost of capitalcosts associated with having money tied up in inventory. Generally this would be the interest rate paid on business debt, but could optionally be the return on investment a company could expect if it had access to money to invest.Cost of goods soldaccounting term used to describe the total value (cost) of products sold during a specific period of time. Since inventory is an asset, it is not expensed when it is purchased or produced, it instead goes into an asset account (the inventory account). When product is sold, the value of the product (the cost, not the sell price) is moved from the asset account to an expense account called “cost of goods sold” or COGS. COGS appears on the profit and loss statement and is also used in some inventory measurements (such as inventory turns).CRPSee Capacity requirements planningCumulative forecast biasthe sum of a series of forecast errors. See also Forecast error.Cumulative lead timethe longest sum of consecutive lead times. Calculated by tracking all lead time paths through the bill-of-materials structure, and using the longest one. Current-demand inventoryinventory carried to meet immediate expected demand. For example, the inventory that will be shipping in todays orders. The definition of “current demand” is somewhat subject to interpretation since you must apply a period of time to determine what is considered “current demand” as opposed to “future demand”.Cycle countany process that verifies the correctness of inventory quantity data by counting portions of the inventory on an ongoing basis. In other words, any process that uses regularly scheduled counts but does not count the entire facilitys inventory in a single event.Demandthe need for a specific item in a specific quantity.Demand overrideany adjustment that is used to supersede your demand history (usually for the purposes of forecasting or calculating safety stock). A demand override can be a fixed quantity that will be used to replace the actual demand, or it can be a factor that can be used to adjust the demand.Demand planning softwaresoftware that includes forecasting capabilities and calculations for determining order quantities and safety stock. Demand variabilitychanges in demand from period to period. Demand variability is the result of trend, seasonality, events, and noise.Dependent demanddemand that is created as a direct result of another items demand or demand from another facility. Demand for a component is an example of dependent demand since the demand for the component is a direct result of demand for the item(s) that are produced from that component.De-seasonalizeto remove the seasonality effect on demand. See also Normalize.De-trendto remove the trend effect on demand. See also Normalize.Direct shippinga procurement strategy that allows a company to sell product without ever stocking or even handling the product. When a customer places an order with a seller, the order is passed on to the sellers supplier who will then ship the product directly to the customer. Distribution inventorydistribution inventory is the result of a distribution network and the increases in inventory required to operate out of multiple distribution points. When you decide to have two or three or more strategically located distribution centers rather than a single centrally located distribution center, you will generally increase your overall inventory levels. The reason for this is you are now breaking up your demand among three locations. When demand is broken up (disaggregated) you will usually find greater variability in the demand at each location. This increase in variability results in increases in safety stock in order to meet desired service levels. This increase in safety stock is essentially your distribution inventory. Some practitioners consider all inventory in the distribution network to be distribution inventory. I disagree with that definition, since much of that inventory would exist regardless of the distribution network. Distribution requirements planningprocess for determining inventory requirements in a multiple facility environment. DRP may be used for both distribution and manufacturing. In manufacturing, DRP will work directly with MRP. DRP uses DRP relationships to allow demand to flow from one facility to another.Dock-to-stock cycle measurementmeasuring the amount of time it takes between the time something arrives at your dock, and the time it is in stock and available for sale or use. Double exponential smoothingforecasting method that uses exponential smoothing to smooth both the demand and the trend.DRPSee Distribution requirements planning.DRP relationshipsometimes called a bill of distribution, a DRP relationship specifies an item-based or facility-based supply relationship between facilities and a lead time, and is used by DRP to flow demand from one facility to another. Eachesterm used to describe a unit of measure where each individual piece is tracked as a quantity of one in the computer system.Economic order quantitya calculation (or the result of a calculation) that determines the most cost effective quantity to order (purchased items) or produce (manufactured items) by finding the point at which the combination of order cost and carrying cost is the least. There is a specific calculation that has historically been known as EOQ, but any calculation (or variation of this calculation) that uses similar logic would also be considered EOQ.Effective datesdates on the detail lines of bills of materials and routings that let the system know when these lines should be included in planning and execution activities. Effective lead timea lead time that has been adjusted to take into account additional factors. For example, in a fixed-schedule ordering system (periodic review) you may adjust your lead time to include the time between ordering opportunities.Engineer-to-ordera variation of a make-to-order manufacturing strategy. An engineer-to-order strategy is used when the end product is truly custom. In this strategy, design or engineering tasks must be completed as part of the order process. This strategy has the longest lead time to the customer, but is necessary since the detailed specifications of the product are not known in advance. EOQSee Economic order quantity.ERPenterprise resource planning. Software systems designed to manage most or all aspects of a manufacturing or distribution enterprise (an expanded version of MRP systems). ERP systems are usually broken down into modules such as financials, sales, purchasing, inventory management, manufacturing, MRP, DRP. The modules are designed to work seamlessly with the rest of the system and should provide a consistent user interface between them. Event indexconsists of a number (factor) for each specific forecast period that describes the relationship of each periods demand (excluding trend and seasonality) over the length of time demand is affected by an event (such as a promotion). Excess inventoryinventory greater than the “right amount” of inventory. Exponential smoothingforecasting method that is essentially a variation of a weighted moving average. The data inputs to the exponential smoothing include the previous periods demand, the previous periods forecast, and a smoothing factor. The smoothing factor is a number between zero and one (0.01, 0.02, . . . 0.99) that is used to weight the most recent periods demand against the forecast for that period to produce the next periods forecast. The calculation is Next period forecast=(Previous periods demand*Smoothing factor)+(Previous periods forecast*(1-Smoothing factor).Exponentially smoothed absolute deviation (ESAD)a variation of Mean Absolute Deviation (MAD) where instead of averaging the absolute values, you apply the exponential smoothing calculation to them. See also Mean absolute deviation and Exponential smoothing. Exponentially smoothed forecast biasapplication of exponential smoothing to a series of forecast errors. See also Forecast error.Fair share distributiona method of dividing a receipt or existing inventory at a supplying facility among the facilities being supplied, based on demand at those facilities. Fill ratea success rate in filling orders. Stated as line fill, order fill, unit fill, or dollar fill. Finished goodsinventory that is in a salable or shippable form based upon its location within the supply chain. An item considered a finished good in a supplying plant might be considered a component or raw material in a receiving plant.Finite capacity schedulinga manufacturing planning system that schedules within the capacity constraints of work centers.Firm planned ordera special status applied to a planned order that prevents MRP from replanning it. Fixed reorder pointalso called fixed order point, fixed reorder point is a preset (fixed) quantity that triggers the need for a new order being placed. See also Reorder point.Fixed-schedule ordering systema replenishment system where orders can only be placed based on a predetermined schedule. For example, you may have a supplier where you have a set “order day” and “delivery day”, such as placing orders every Tuesday for a Friday delivery. See also Periodic review inventory system.Flatteningwhen referring to “flattening your bills of materials”, flattening implies you are removing levels from your bill-of-materials structure. It means that rather than making one item that is then later used to make another item, you make the first item as part of the manufacturing process for the second item (under the same production order in the same production run).Forecastan estimation of future demand. Forecast basisthe data and information that is used to produce the forecast. In most cases, this is the historical demand for the product. Forecast biasthe tendency of a forecast to be high or low.Forecast consumptionthe process of depleting the forecast as actual orders are received. Forecast errormeasurement that represents forecast error/accurac