CLTD Terms - Module 1 - 5
benchmarking - correct answer ✔Comparing products, processes, and
services to another organization thought to have superior performance. The
benchmark target may or may not be a competitor or even in the same
industry. There are 7 common forms: competitive, financial, functional,
performance, process, product, strategic.
Assembled-to-Order (ATO) - correct answer ✔A production environment
where a good or service can be assembled after receipt of a customer's order.
The key components (bulk, semi-finished, intermediate, subassembly,
fabricated, purchased, packing, and so on) used in the assembly or finishing
process are planned and usually stocked in anticipation of a customer order.
Receipt of an order initiates assembly of the customized product. This
strategy is useful where a large number of end products (based on the
selection of options and accessories) can be assembled from common
components.
Activity-Based Costing (ABC) - correct answer ✔In this type of accounting, a
model, by time period, of resource costs created because of activities related
to products or services or other items causing the activity to be carried
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Syn: Activity-based cost accounting, activity-based costing model.
agile manufacturing / agile supply chain - correct answer ✔The ability to
respond quickly to unpredictable changes in customer needs by reconfiguring
operations.
Continuous Replenishment - correct answer ✔A process by which a supplier
is notified daily of actual sales or warehouse shipments and commits to
replenishing these sales (by size, color, and so on) without stock outs and
without receiving replenishment orders. The result is a lowering of associated
,costs and an improvement in inventory turnover. See: vendor-managed
inventory
Cash-to-Cash Cycle Time - correct answer ✔An indicator of how efficiently a
company manages its assets to improve cash flow. Inventory days + accounts
receivable days - accounts payable days
80-20 - correct answer ✔A term referring to the Pareto principle. The
principle suggests that most effects come from relatively few causes; that is,
80 percent of the effects (or sales or costs) come from 20 percent of the
possible causes (or items).
ABC analysis / ABC classification - correct answer ✔The classification of a
group of items in decreasing order of annual dollar volume (price multiplied by
projected volume) or other criteria. This array is then split into three classes.
The first group usually represents 10 percent to 20 percent by number of
items and 50 percent to 70 percent by projected dollar volume. The next
grouping, usually represents about 20 percent of the items and about 20
percent of the dollar volume. The third class contains 60 percent to 70 percent
of the items and represents about 10 percent to 30 percent of the dollar
volume. This principle states that effort and money can be saved through
applying looser controls to the low-dollar-volume class items than will be
applied to high-dollar-volume class items. It is applicable to inventories,
purchasing, sales, and so on.
advance ship notice (ASN) - correct answer ✔An electronic data interchange
(EDI) notification of shipment of product.
advanced planning and scheduling (APS) - correct answer ✔Techniques that
deal with analysis and planning of logistics and manufacturing during short,
intermediate, and long-term time periods. It describes any computer program
that uses advanced mathematical algorithms or logic to perform optimization
or simulation on finite capacity scheduling, sourcing, capital planning,
,resource planning, forecasting, demand management, and others. These
techniques simultaneously consider a range of constraints and business rules
to provide real-time planning and scheduling, decision support, available- to-
promise, and capable-to-promise capabilities. It often generates and
evaluates multiple scenarios. Management then selects one scenario to use
as the "official plan." The five main system components are (1) demand
planning, (2) production planning, (3) production scheduling, (4) distribution
planning, and (5) transportation planning.
agent - correct answer ✔One who acts on behalf of another (the principal) in
dealing with a third party.
allocation - correct answer ✔1) The classification of resources or item
quantities that have been assigned to specific orders but have not yet been
released from the stockroom to production. It is an "uncashed" stockroom
requisition. 2) A process used to distribute material in short supply.
anti-bribery regulations - correct answer ✔Country regulations that penalize
organizations who engage in bribery. The OECD Anti-Bribery Convention
requires countries to develop these.
anticipation inventories - correct answer ✔Additional inventory above basic
pipeline stock to cover projected trends of increasing sales, planned sales
promotion programs, seasonal fluctuations, plant shutdowns, and vacations.
asset recovery - correct answer ✔The cost-effective classification and
recovery of usable raw materials from product returns, obsolete or excess
goods, or scrap and waste. The goals are to minimize costs and liabilities
while maximizing returns from reusable assets.
associative forecasting - correct answer ✔Uses one or more variables that
are believed to affect demand in order to forecast future demand.
, ATR certificate - correct answer ✔A certificate that is required for trade
between the EU and Turkey. It grants zero duty to "free circulating" goods in
the EU, which are goods originating in the EU or imported to the EU with all
import duties and taxes paid. Agricultural goods, minerals, and steel are
excluded and must use form EUR1.
automatic identification and data capture (AIDC) - correct answer ✔A set of
technologies that collect data about objects and then send these data to a
computer without human intervention. Examples include radio frequency
wireless devices and terminals, bar code scanners, and smart cards.
automatic identification system (AIS) - correct answer ✔A system that can
use various means, including bar code scanning and radio frequencies, to
sense and load data in a computer.
available-to-promise (ATP) - correct answer ✔(1) In operations, the
uncommitted portion of a company's inventory and planned production
maintained in the master schedule to support customer-order promising. This
quantity is the uncommitted inventory balance in the first period and is
normally calculated for each period in which an MPS receipt is scheduled. In
the first period, it includes on- hand inventory less customer orders that are
due and overdue. Three methods of calculation are used: discrete, cumulative
with look-ahead, and cumulative without look-ahead. (2) In logistics, the
quantity of a finished good that is or will be available to commit to a customer
order based on the customer's required ship date. To accommodate deliveries
on future dates, this is usually time-phased to include anticipated purchases
or production receipts.
backorder - correct answer ✔An unfilled customer order or commitment. It is
an immediate (or past due) demand against an item whose inventory is
insufficient to satisfy the demand.
