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Decouple?
to reduce the direct dependency of a process step on its predecessor
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Order cost?
the fixed cost associated with ordering inventory
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Changeover cost?
the cost of changing equipment from producing one product or service to another
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Carrying cost?
costs associated with carrying inventory
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Stockout cost?
cost associated with not having inventory when a customer demands it
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Continuous replenishment?
delivery of inventory, frequently in small quantities
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Independent demand inventory?
inventory whose demand is dictated by the marketplace
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Maintenance, repair, and operating (MRO) inventory
inventory that consists of items consumed in the day-to-day activities of a business
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Stockout?
An instance when demand cannot be satisfied by existing inventory
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Finished-good inventory?
inventory consisting of products that have completed all stages of production
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Batch processing?
system in which a group of identical products or customers is processed through one step in the process and when the entire group moves to the next step.
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Level production?
an aggregate planning approach that uses inventory stored from period to period to reduce the need to change the output rate as demand changes
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Work-in-process inventory (WIP)
inventory that has begun processing, but has not yet completed it
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Transfer batch?
the quanitity produced at a workcenter before transferring the products to the next step in the process.
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Pipeline inventory?
inventory in transit
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Service level?
Percent of orders satisfied from existing inventory
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Replenishment lead time?
time required to receive inventory that has been ordered
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Fixed-quanitity reorder point (ROP) model?
An independent demand inventory management system that reorders when inventory drops to a specific level
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Safety stock?
additional inventory used to help meet demand uncertainty
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Economix order quantity model?
an apporach used to determine an order quantity that minimizes the sum of ordering and carrying costs.
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Periodic review system?
an independent demand management system that orders inventory on fixed time intervals
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Material requirements planning (MRP)
an inventory management approach used to manage dependent demand inventory that plans order releases for the future based on production schedules
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Netting?
process of computing net requirements
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Back-ward scheduling?
when a completion date or due date is known and that date must determine a start date
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Master production schedule (MPS)?
schedule of end products that must be completed in a specific time period
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Bill of material?
in material requirements planning, this is a computer file containing information about the materials required to produce a product or component
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Inventory master file?
in material requirements planning, this is a computer file containing information about an inventory item such as the quanitity on hand, the cost, and so on.
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Gross-requirements?
in material requirments planning, the total quantity needed to meet-demand.
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Beginning on-hand inventory?
quantity of inventory on hand at the beginning of a time period
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Ending on-hand inventory
quantity of inventory on hand at the end of a time period
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Net requirements?
in material requirements planning, gross requirments minus beginning on-hand inventory
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Planned order receipt?
in material requirements planning, this is the planned receipt of material that results from a planned order release.
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Planned order release?
in material requirements planning, this is the order planned to be released to satisfy a future net requirement
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Lot-for-lot ordering?
in material requirements planning, ordering exactly the amount of the net requirements
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Fixed-quantity order policy?
in material requirements planning, rather than ordering the quantity of the net requirements, orders are placed in increments of a fixed quantity.
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Two-bin system?
primitive reorder point inventory system in which two containers of invenotry are kept. An order for more is placed when one container becomes empty.
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Inventory turns?
a measure of inventory productivity computed by dividing sales by the average value of inventory
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Dollar days?
dollar value of an item in inventory multiplied by the number of days until it will be sold
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