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23 Cards in this Set
- Front
- Back
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order costing
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The cost of preparing a purchase order for a supplier or a production order for the shop.
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setup cost
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The cost involved in changing over a machine to produce a different item.
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quantity discount
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a drop in the price per unit when an order is sufficiently large.
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cycle inventory
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The portion of total inventory that varies directly with lot size
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lot sizing
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The determination of how frequently and in what quantity to order inventory.
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safety stock inventory
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Surplus inventory that a company holds to protect against uncertainties in demand, lead time, and supply changes.
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pipeline inventory
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inventory moving from point to point in the materials flow system.
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repeatability
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The degree to which the same work can be done again.
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special
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An item made to order; if purchased, it is bought to order.
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standard
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An item that is made to stock or ordered to stock, and normally is available upon request.
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ABC analysis
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The process of dividing items into three classes, according to their dollar usage, so that managers can focus on items that have the highest dollar value.
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economic order quantity (EOQ)
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The lot size that minimizes total annual inventory holding and ordering costs.
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time between orders (TBO)
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The average elapsed time between receiving (or placing) replenishment orders of Q units for a particular lot size.
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independent demand items
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Items for which demand is influenced by market conditions and is not related to the inventory decisions for any other item held in stock.
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continuous review Q system
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A system designed to track the remaining inventory of an item each time a withdrawal is made to determine whether it is time to reorder.
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reorder point (ROP) system
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sometimes called continuous review Q system or fixed order-quantity system
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inventory position (IP)
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The measurement of an item's ability to satisfy future demand.
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scheduled receipts (SR)
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Orders that have been placed but have not yet been received.
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open orders
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sometimes called scheduled receipts; Inventory position= On-hand inventory + Scheduled receipts - Backorders; IP= OH + SR - BO
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reorder point (R)
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The predetermined minimum level that an inventory position must reach before a fixed quantity Q of the item is ordered.
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service level
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The desired probability of not running out of stock in any one ordering cycle, which begins at the time an order is placed and ends when it arrivesin stock.
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cycle-service level
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another name for cycle service
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protection interval
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The period over which safety stock must protect the user from running out of stock.
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