Apics Dictionary 14ed 2013 PDF

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FOURTEENTH EDITION

APICS DICTIONARY The essential supply chain reference

APICS Dictionary FOURTEENTH EDITION

Editor John H. Blackstone Jr., PhD, CFPIM, Jonah’s Jonah Department of Management Terry College of Business University of Georgia

APICS Dictionary Fourteenth edition—2013 Thirteenth edition—2010 Twelfth edition—2008 Eleventh edition—2005 Tenth edition—2002 Ninth edition—1998 Eighth edition—1995 Seventh edition—1992 Sixth edition—1987 Fifth edition—1982 Fourth edition—1980 Third edition—1970 Second edition—1966 First edition—1963

Copyright 2013 by APICS International Standard Book Number: 978-0-9882146-1-3 All rights reserved. No part of this publication covered by copyright herein may be reproduced or copied in any form or by any means—graphic, electronic, or mechanical, including photocopying, taping, or informational storage and retrieval systems— without written permission from the publisher. APICS 8430 West Bryn Mawr Avenue Suite 1000 Chicago, IL 60631-3439 1-800-444-2742 or +1-773-867-1777 apics.org

Acknowledgements Thank you to the following volunteers for their careful review of the APICS Dictionary, 14th edition. Louise Beauchamp, CFPIM; Stephen N. Chapman, PhD, CFPIM; Rick Donahoue, CPIM, CSCP; Ann K. Gatewood, CFPIM, CIRM, CSCP; Rebecca B. Hallock, CPIM; Mark C. Hardison, CFPIM, CSCP; William R. Leedale, CFPIM, CIRM, CSCP; Frank L. Montabon, PhD, CPIM, CIRM, CSCP; Murray R. Olsen, CFPIM, CIRM; Anthony L. Patti, PhD, CFPIM; Andrea M. Prud’homme, PhD, CPIM, CIRM, CSCP; and Fran Scher.

The Institute of Industrial Engineers provided permission to include several definitions reprinted from the text Industrial Engineering Terminology, revised edition, Copyright 1991, Institute of Industrial Engineers, 3577 Parkway Lane, Suite 200, Norcross, Georgia 30092. The American Society of Quality provided permission to include several terms from Karen Bemowski’s “The Quality Glossary,” published in the February 1992 issue of Quality Progress. The Theory of Constraints International Certification Organization provided permission to include several terms from the TOCICO Dictionary. The Spectrum Publishing Company provided permission to use terms from the book, Synchronous Management, by Michael Umble, CFPIM, and M.L. Srikanth. The Association for Manufacturing Excellence provided the definition for kaizen blitz, which is trademarked. The Supply Chain Council provided the definition for Supply Chain Operations Reference model (SCOR), which is trademarked. For the latest information about SCOR, visit the Supply Chain Council’s website, supply-chain.org.

abandonment ● acceptance sampling

A abandonment abandonment—Giving up a route by a carrier. For example, a railroad.A ABB ABB—Abbreviation for activity-based budgeting.A ABC ABC—Abbreviation for activity-based cost accounting.A ABC analysis analysis—Syn: ABC classification.A ABC classification—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, called A, B, and C. The A 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, B, usually represents about 20 percent of the items and about 20 percent of the dollar volume. The C class contains 60 percent to 70 percent of the items and represents about 10 percent to 30 percent of the dollar volume. The ABC principle states that effort and money can be saved through applying looser controls to the low-dollarvolume class items than will be applied to high-dollarvolume class items. The ABC principle is applicable to inventories, purchasing, sales, and so on. Syn: ABC analysis, distribution by value. See: 80-20, Pareto analysis, Pareto’s law.A ABC frequency of access—A warehouse location that is determined by both a product’s ABC classification and by the frequency with which it is removed or replaced.A ABC inventory control—An inventory control approach based on the ABC classification.A ABM ABM—Abbreviation for activity-based management.A abnormal demand demand—Demand in any period that is outside the limits established by management policy. This demand may come from a new customer or from existing customers whose own demand is increasing or decreasing. Care must be taken in evaluating the nature of the demand: is it a volume change; is it a change in product mix; or is it related to the timing of the order? See: outlier.A ABP ABP—Abbreviation for activity-based planning.A absentee p policy olicy olicy—The policy that discusses allowed job absences and the penalties from too many absences.A absentee rate rate—A ratio comparing the number of employee-days lost with the total number of available employee-days of employment during some base period, usually one month.A

APICS Dictionary, 14th edition

absorption costing costing—An approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs. Syn: allocation costing. See: activity-based costing.A accelerated deprec depreciation iation iation—A depreciation method involving high write-offs in the early years of an asset’s life and lower write-offs later. This method lowers the value of an asset faster than straight-line depreciation.A accept accept—The receipt of an item as being complete and sound.A acceptable outgoing quality level (AOQL) (AOQL)—A demarcation between the level of defects in a lot at which the lot will be accepted or rejected.A acceptable quality level (AQL)—When a continuing series of lots is considered, a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average.A acceptable sampling plan—A specific plan that indicates the sampling sizes and the associated acceptance or nonacceptance criteria to be used.A acceptance criteria criteria—Those performance requirements and conditions that must be reached before projects or products are accepted.A acceptance nu number mber mber—1) A number used in acceptance sampling as a cutoff at which the lot will be accepted or rejected. For example, if x or more units are bad within the sample, the lot will be rejected. 2) The value of the test statistic that divides all possible values into acceptance and rejection regions.A acceptance plan plan—How an organization determines which product lots to accept or reject based on samples. See: acceptance sampling.A acceptance sa sampling mpling mpling—1) The process of sampling a portion of goods for inspection rather than examining the entire lot. The entire lot may be accepted or rejected based on the sample even though the specific units in the lot are better or worse than the sample. There are two types: attributes sampling and variables sampling. In attributes sampling, the presence or absence of a characteristic is noted in each of the units inspected. In variables sampling, the numerical magnitude of a characteristic is measured and recorded for each inspected unit; this type of sampling involves reference to a continuous scale of some kind. 2) A method of measuring random samples of lots or batches of products against predetermined standards.A

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A

accessibility ● activity accessibility accessibility—1) In transportation, the facility with which a carrier provides service from one point to another. 2) In warehousing, the ability to get to and within the point of storage easily.A

A

accessorial charges charges—A bill for services, such as inside deliveries, which are made in addition to transportation charges.A accessory accessory—A choice or feature added to the good or service offered to the customer for customizing the end product. An accessory enhances the capabilities of the product but is not necessary for the basic function of the product. In many companies, an accessory means that the choice does not have to be specified before shipment but can be added at a later date. In other companies, this choice must be made before shipment. See: feature.A accidental death and disability ((AD&D) AD&D) AD&D)—Insurance that often is part of an employee benefit package, providing payment for either accidental death or disability.A accident prevention prevention—The application of basic scientific and technical principles—including education and training—for the detection, analysis, and minimization of hazards, with the objective of avoiding accidents.A acclimatization acclimatization—The physiological, emotional, and behavioral adjustment to changes in the environment. Proper performance depends on adequate acclimatization to the workplace, including significant mechanical features such as seat height and lighting. Heat, cold, humidity, and light are important physiologically.A accountability accountability—Being answerable for, but not necessarily personally charged with, doing the work. Accountability cannot be delegated, but it can be shared.A accounting accounting—The function of maintaining, analyzing, and explaining the financial records and status of an organization.A account man manager ager ager—A manager who has direct responsibility for a customer’s interest.A accounts payable payable—The value of goods and services acquired for which payment has not yet been made.A accounts rec receivable eivable eivable—The value of goods shipped or services rendered to a customer on which payment has not yet been received. Usually includes an allowance for bad debts.A accreditation accreditation—Certification by a recognized body of the facilities, capability, objectivity, competence, and integrity of an agency, service, operational group, or individual to provide the specific service or operation needed. For

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example, the Registrar Accreditation Board accredits those organizations that register companies to the ISO 9000 Series Standards.A accumulation bin bin—A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor. Syn: assembly bin.A accuracy accuracy—The degree of freedom from error or the degree of conformity to a standard. Accuracy is different from precision. For example, four-significant-digit numbers are less precise than six-significant-digit numbers; however, a properly computed four-significant-digit number might be more accurate than an improperly computed six-significant-digit number.A acid test test—Syn: quick asset ratio.A acid test ratio ratio—Syn: quick asset ratio.A acknowledgment acknowledgment—A communication by a supplier to advise a purchaser that a purchase order has been received. It usually implies acceptance of the order by the supplier.A acquis acquisition ition cost cost—The cost required to obtain one or more units of an item. It is order quantity times unit cost. See: ordering cost.A action message message—An output of a system that identifies the need for, and the type of action to be taken to correct, a current or potential problem. Examples of action messages in an MRP system include release order, reschedule in, reschedule out, and cancel. Syn: exception message, action report.A action plan plan—A process to obtain results identified by one or more objectives.A action re report port port—Syn: action message.A activation activation—Putting a resource to work.A active data ggathering athering athering—Data gathered when a company initiates conversation with the customer.A active inventory inventory—The raw materials, work in process, and finished goods that will be used or sold within a given period.A active load load—Work scheduled that may not be on hand.A active tag tag—A radio frequency identification tag that broadcasts information and contains its own power source. See: radio frequency identification (RFID).A activity activity—1) In activity-based cost accounting, a task or activity, performed by or at a resource, required in producing the organization’s output of goods and services. A resource may be a person, machine, or facility.

APICS Dictionary, 14th edition

activity analysis ● activity-on-node network (AON) Activities are grouped into pools by type of activity and allocated to products. 2) In project management, an element of work on a project. It usually has an anticipated duration, anticipated cost, and expected resource requirements. Sometimes “major activity” is used for larger bodies of work.A

requirements (for both financial and operational systems) based on future demand for products or services by specific customer needs. Demand for resources is related to resource availability; capacity overages and shortfalls are corrected. Activity-based budgeting derives from the outputs of ABP.A

activity an analysis alysis alysis—In project management, the identification and description of activities within an organization for the purpose of activity-based costing.A

activity code code—In project management, a value that allows filtering or ordering of activities in reports.A

activity a attributes ttributes ttributes—Multiple features associated with each activity to be performed. These include predecessor activities, successor activities, and resource requirements.A activity-based budgeting (AB (ABB) B) B)—In activity-based cost accounting, a budgeting process employing knowledge of activities and driver relationships to predict workload and resource requirements in developing a business plan. Budgets show the predicted consumption and cost of resources using forecast workload as a basis. The company can use performance to budget in evaluating success in setting and pursuing strategic goals; this activity is part of the activity-based planning process.A activity-based cost accoun accounting ting ting—A cost accounting system that accumulates costs based on activities performed and then uses cost drivers to allocate these costs to products or other bases, such as customers, markets, or projects. It is an attempt to allocate overhead costs on a more realistic basis than direct labor or machine hours. Syn: activity-based costing, activitybased cost accounting. See: absorption costing.A activity-based costing (ABC) (ABC)—In activity-based cost 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 out. Syn: activity-based cost accounting, activity-based costing model.A activity-based costing system system—A set of activity-based cost accounting models that collectively define data on an organization’s resources, activities, drivers, objects, and measurements.A activity-based management (ABM) (ABM)—The use of activitybased costing information about cost pools and drivers, activity analysis, and business processes to identify business strategies; improve product design, manufacturing, and distribution; and remove waste from operations. See: activity-based cost accounting.A activity-based planning (ABP) (ABP)—In activity-based cost accounting, a continuing definition of activity and resource

APICS Dictionary, 14th edition

A

activity definition definition—The specific work to be performed that defines a project deliverable.A activity dictionary dictionary—In activity-based cost accounting, a set of standard definitions of activities including descriptions, business process, function source, cost drivers, and other data important to activity-based planning.A activity driver driver—In activity-based cost accounting, a yardstick of demands placed on an activity by given cost objects. Its purpose is to assign activity costs to cost objects.A activity duration duration—The planned difference between the start and finish dates of a project activity.A activity identifier identifier—A unique alphanumeric code that differentiates one project activity from other activities.A activity level level—A description of how reactive one activity is to changes in the level of another activity or cost object.A activity list list—A record of planned activities in a project, including an activity description and an activity identifier.A activity network diagram diagram—One of the seven new tools of quality. A drawing including nodes that represent operations to be performed and arrows representing precedence relationships. This drawing represents all of the activities to be finished to complete a project. Also known as a critical path diagram or PERT chart.A activity-on-arc network network—Syn: activity-on-arrow network.A activity-on-arro activity-on-arrow w network (AOA) (AOA)—A project management network in which the passage of time, via activities, takes place on the arrows. The start of an activity is represented by the tail of the arrow, while the completion of the activity is represented by the tip of the arrow. The sequence of the arrows represents the sequence of activities. Arrows are connected by nodes, which are usually circles. Syn: activity-on-arc network, arrow diagram method, event-on-arrow network.A activity-on-node network (AON) (AON)—A project management network in which the passage of time, via activities, takes place on circles called nodes. Each node contains

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activity ratio ● advanced planning and scheduling (APS) a number representing the estimated duration of the activity it represents. Nodes are connected by arrows that give precedence relationships. Syn: event-on-node network, precedence diagram method.A

A

activity ratio ratio—A financial ratio to determine how an organization’s resources perform relative to the revenue the resources produce. Activity ratios include inventory turnover, receivables conversion period, fixed-asset turnover, and return on assets.A activity resour resource ce estimating estimating—Estimating the types and amounts of resources that will be needed for various project activities.A activity sequencing sequencing—The process of defining and documenting dependencies among project activities.A actual cost of work performed performed—The direct costs actually incurred in, and the indirect costs applied to, accomplishing work performed within a given time period. These costs should reconcile with the contractor’s incurred-cost ledgers, which are regularly audited by the client.A actual costs costs—The labor, material, and associated overhead costs that are charged against a job as it moves through the production process.A actual cost system system—A cost system that collects costs historically as they are applied to production and allocates indirect costs to products based on the specific costs and achieved volume of the products.A actual demand demand—Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or “consumes” the forecast, depending upon the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence) but will net against the forecast outside this horizon based on the chosen forecast consumption rule.A actual duration duration—The difference between the actual start date of a project activity and the current date (if the activity is still in progress) or the difference between the actual start date of a project activity and the actual completion date (if the activity is completed).A actual finish date—In project management, the date on which an activity in a project was actually completed.A actual start dat date e—In project management, the date on which an activity in a project was actually started.A actual volum volume e—Actual output expressed as a volume of capacity. It is used in the calculation of variances when

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compared with demonstrated capacity (practical capacity) or budgeted capacity.A AD&D AD&D—Abbreviation for accidental death and disability.A adaptable website—In e-co...