Fold each printed sheet in half lengthwise.

The left side of the document will list the term and the right side will list the definition. Tape or staple
the open edges of your eFlashcards. Cut out your eFlashcards on the lines indicated. Note: There are four eFlashcards on each printed page.

F Definition
Term: Anticipation inventories O Additional inventories above basic pipeline stock to cover
L projected trends of increasing sales, planned sales
D promotion programs, seasonal fluctuations, plant
shutdowns, and vacations.
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F Definition
Term: Backorder O An unfilled customer order or commitment. An immediate
L (or past due) demand against an item whose inventory is
D insufficient to satisfy the demand.

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F Definition
Term: Balanced scorecard O A list of financial and operational measurements used to
L evaluate organizational or supply chain performance. The
D dimensions of this might include customer perspective,
business process perspective, financial perspective, and
H innovation and learning perspectives. It formally connects
E overall objectives, strategies, and measurements. Each
R dimension has goals and measurements.
E

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F Definition
Term: Balance sheet O A financial statement showing the resources owned, the
L debts owed, and the owner's share of a company at a given
D point in time.

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F Definition
Term: Benchmarking O Comparing a company's costs, products, and services to that
L of a company thought to have superior performance.
D

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F Definition
Term: Blanket purchase order O A long-term commitment to a supplier for material against
L which short-term releases will be generated to satisfy
D requirements.

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F Definition
Term: Buffer O 1) A quantity of materials awaiting further processing. It
L can refer to raw materials, semifinished stores or hold
D points, or a work backlog that is purposely maintained
behind a work center. 2) In the theory of constraints, these
H can be time or material and support throughput and/or due
E date performance. They can be maintained at the constraint,
R convergent points, divergent points, and shipping points.
E

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F Definition
Term: Business plan O 1) A statement of long-range strategy and revenue, cost, and
L profit objectives usually accompanied by budgets, a
D projected balance sheet, and a cash flow statement. Usually
stated in terms of dollars and grouped by product family. It
H is then translated into synchronized tactical functional plans
E through the production planning process. 2) A document
R consisting of the business details prepared by an
E entrepreneur to plan for a new business.

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F Definition
Term: Carrying cost O The cost of holding inventory, usually defined as a
L percentage of the dollar value of inventory per unit of time.
D

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F Definition
Term: Cash flow O The net flow of dollars into or out of the proposed project.
L The algebraic sum, in any time period, of all cash receipts,
D expenses, and investments.

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F Definition
Term: Cash-to-cash cycle time O An indicator of how efficiently a company manages its
L assets to improve cash flow. (Inventory days + accounts
D receivable days - accounts payable days).

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F Definition
Term: Changeover O 1) The work required to change a specific machine,
L resource, work center, or line from making the last good
D piece of item A to making the first good piece of item B. 2)
The refitting of equipment to neutralize the effects of the
H last lot produced.
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F Definition
Term: Collaborative planning, forecasting, O 1) A collaboration process whereby supply chain trading
partners can jointly plan key supply chain activities from
and replenishment (CPFR) L
D production and delivery of raw materials to production and
delivery of final products to end customers. It encompasses
business planning, sales forecasting, and all operations required
H
to replenish raw materials and finished goods. 2) A process
E
philosophy for facilitating collaborative communications. It is
R considered a standard, endorsed by the Voluntary Interindustry
E Commerce Standards.

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F Definition
Term: Competitive analysis O An analysis of a competitor that includes its strategies,
L capabilities, prices and costs.
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F Definition
Term: Cost of goods sold O An accounting classification useful for determining the
L amount of direct materials, direct labor, and allocated
D overhead associated with the products sold during a given
period of time.
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F Definition
Term: Cost of quality O The cost associated with providing poor quality products or
L services. There are four categories of costs: (1) internal
D failure costs; (2) external failure costs; (3) appraisal costs;
and (4) prevention costs.
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F Definition
Term: Cross-selling O Occurs when customers buy additional products or services
L after the initial purchase.
D

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F Definition
Term: Customer relationship management O A marketing philosophy based on putting the customer first.
(CRM) L The collection and analysis of information designed for
D sales and marketing decision support to understand and
support existing and potential customer needs.
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F Definition
Term: Customer service O 1) The ability of a company to address the needs, inquires,
L and requests from customers. 2) A measure of the delivery
D of a product to the customer at the time the customer
specified.
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F Definition
Term: Cycle O 1) The interval of time during which a system or process,
L such as seasonal demand or a manufacturing operation,
D periodically returns to similar initial conditions. 2) The
interval of time during which an event or set of events is
H completed.
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F Definition
Term: Cycle stock O One of the two main conceptual components of any item
L inventory, it is the most active component; it depletes
D gradually as customer orders are received and is replenished
cyclically when supplier orders are received.
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F Definition
Term: Cycle time O 1) In industrial engineering, the time between completion of
L two discrete units of production. 2) In materials
D management, it refers to the length of time from when
material enters a production facility until it exits.
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F Definition
Term: Decoupling O Creating independence between supply and use of material.
L Commonly denotes providing inventory between operations
D so that fluctuations in the production rate of the supplying
operation do not constrain production or use rates of the
H next operation.
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F Definition
Term: Demand O A need for a particular product or component. This could
L come from any number of sources. At the finished goods
D level, this is usually different from sales data because it
does not necessarily result in sales. There are generally up
H to four components: cyclical component, random
E component, seasonal component, and trend component.
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F Definition
Term: Demand forecasting O Forecasting the demand for a particular good, component,
L or service.
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F Definition
Term: Demand management O 1) The function of recognizing all demands for goods and
L services to support the marketplace. It involves prioritizing
D demand when supply is lacking. It facilitates the planning
and use of resources for profitable business results. 2) In
H marketing, the process of planning, executing, controlling,
E and monitoring the design, pricing, promotion, and
R distribution of products and services to bring about
E transactions that meet organizational and individual needs.

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F Definition
Term: Demand planning O Using forecasts and experience to estimate demand for
L various items at various points in a supply chain. Several
D forecasting techniques may be used during the planning
process. Often, families of items are aggregated in doing
H this planning. Aggregation also may occur by geographical
E region or by life cycle stage. Forecast demand is compared
R to actual demand in order to measure and increase forecast
E accuracy.

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F Definition
Term: Demand shaping O The practice of using the 4 Ps (product, pricing, placement,
L promotion) and other market variables to influence the
D demand of a product or service so that the demand better
matches the available supply.
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F Definition
Term: Dependent demand O Demand that is directly related to or derived from the bill of
L material structure for other items or end products. Such
D demands are therefore calculated and need not and should
not be forecast.
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F Definition
Term: Distributor O A business that does not manufacture its own products, but
L purchases and resells these products. Such a business
D usually maintains a finished goods inventory.

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F Definition
Term: Enterprise resources planning (ERP) O Framework for organizing, defining, and standardizing the
L business processes necessary to effectively plan and control
D an organization so the organization can use its internal
knowledge to seek external advantage.
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F Definition
Term: Extrinsic forecasting method O A forecast method on a correlating leading indicator, such
L as estimating furniture sales based on housing starts. These
D forecasts tend to be more useful for large aggregations, such
as total company sales, that for individual product sales.
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F Definition
Term: Fluctuation inventory O Inventory that is carried as a cushion to protect against
L forecast error.
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F Definition
Term: Forecast error O The difference between actual demand and forecast
L demand, stated as an absolute value or as a percentage.
D

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F Definition
Term: Forecasting O The business function that attempts to predict sales and use
L of products so they can be purchased or manufactured in
D appropriate quantities in advance.

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F Definition
Term: Gross margin O The difference between total revenue and the costs of goods
L sold.
D

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F Definition
Term: Horizontal marketplace O An online marketplace used by buyers and sellers from
L multiple industries. This marketplace lowers prices by
D lowering transaction costs.

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F Definition
Term: Income statement O A financial statement showing the net income for a business
L over a given period of time.
D

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F Definition
Term: Independent demand O The demand for an item that is unrelated to the demand for
L other items. Demand for finished goods, parts required for
D destructive testing, and service parts requirements are
examples of this.
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F Definition
Term: Interplant demand O One plant's need for a part or product that is produced by
L another plant or division within the same organization.
D Although it is not a customer order, it is usually handled by
the master production scheduling system in a similar
H manner.
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F Definition
Term: In-transit inventory O Material moving between two or more locations, usually
L separated geographically; for example, finished goods being
D shipped from a plant to a distribution center.

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F Definition
Term: Intrinsic forecast method O A forecast method based on internal factors, such as an
L average of past sales.
D

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F Definition
Term: Inventory management O The branch of business management concerned with
L planning and controlling inventories.
D

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F Definition
Term: Inventory optimization software O A computer application having the capability of finding
L optimal inventory strategies and policies related to customer
D service and return on investment over several echelons of a
supply chain.
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F Definition
Term: Inventory turnover O The number of times that an inventory cycles, or "turns
L over," during the year. A frequent method to compute this is
D to divide the average inventory level into the annual cost of
sales.
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F Definition
Term: Inventory valuation O The value of the inventory at either its cost or its market
L value. Because inventory value can change with time, some
D recognition is taken of the age distribution of inventory.
Therefore, this is usually computed on a FIFO basis, LIFO
H basis, or a standard cost basis to establish the cost of goods
E sold.
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F Definition
Term: Inventory velocity O The speed with which inventory passes through an
L organization or supply chain at a given point in time as
D measured by inventory turnover.

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F Definition
Term: Inventory visibility O The extent to which inventory information is shared within
L a firm and with supply chain partners.
D

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F Definition
Term: Keiretsu O A form of cooperative relationship among companies in
L Japan where the companies largely remain legally and
D economically independent, even though they work closely
in various ways such as sole sourcing and financial backing.
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F Definition
Term: Key performance indicator (KPI) O A financial or nonfinancial measure, either tactical or
L strategic, that is linked to specific strategic goals and
D objectives.

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F Definition
Term: Landed cost O This cost includes the product cost plus the costs of
L logistics, such as warehousing, transportation, and handling
D fees.

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F Definition
Term: Logistics O 1) In an industrial context, the art and science of obtaining,
L producing, and distributing material and product in the
D proper place and in proper quantities. 2) In a military sense
(where it has greater usage), its meaning can also include
H the movement of personnel.
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F Definition
Term: Market demand O In marketing, the total demand that would exist within a
L defined customer group in a given geographical area during
D a particular time period given a known marketing program.

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F Definition
Term: Market driven O Responding to customers' needs.
L
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F Definition
Term: Market research O The systematic gathering, recording, and analyzing of data
L about problems relating to the marketing of goods and services.
D Such research may be undertaken by impartial agencies or by
business firms or their agents. It includes several types: (1)
market analysis is the study of the size, location, nature, and
H
characteristics of markets, (2) sales analysis is the systematic
E
study and comparison of sales (or consumption) data, (3)
R consumer research is concerned with the discovery and analysis
E of consumer attitudes, reactions, and preferences.

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F Definition
Term: Metrics O A system for collecting, measuring, and comparing a
L measure to a standard for a specific criterion for an
D operation, item, good, service, business, etc. A performance
measurement system consists of a criterion, a standard, and
H a measure.
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F Definition
Term: Multisourcing O Procurement of a good or service from more than one
L independent supplier.
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F Definition
Term: Obsolescence O 1) The condition of being out of date. A loss of value
L occasioned by new developments that place the older
D property at a competitive disadvantage. A factor in
depreciation. 2) A decrease in the value of an asset brought
H about by the development of new and more economical
E methods, processes, or machinery. 3) The loss of usefulness
R or worth of a product or facility as a result of the appearance
E of better or more economical products, methods, or facilities.

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F Definition
Term: Optimization O Achieving the best possible solution to a problem in terms
L of a specified objective function.
D

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F Definition
Term: Ordering cost O Used in calculating order quantities, the costs that increase
L as the number of orders placed increases. It includes costs
D related to the clerical work of preparing, releasing,
monitoring, and receiving orders, the physical handling of
H goods, inspections, and setup costs, as applicable.
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F Definition
Term: Outsourcing O The process of having suppliers provide goods and services
L that were previously provided internally. It involves
D substitution─the replacement of internal capacity and
production by that of the supplier.
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F Definition
Term: Partnership O 1) A form of business ownership that is not organized as a
L separate legal entity, but entailing ownership by two or
D more persons. 2) In a supply chain, a relationship based on
trust, shared risk, and rewards aimed toward achieving a
H competitive advantage.
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F Definition
Term: Pipeline inventory O Inventory in the transportation network and the distribution
L system, including the flow through intermediate stocking
D points.

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F Definition
Term: Planning horizon O The amount of time a plan extends into the future. For a
L master schedule, this is normally set to cover a minimum of
D cumulative lead time plus time for lot sizing low-level
components and for capacity changes of primary work
H centers or of key suppliers. For longer term plans the
E planning horizon must be long enough to permit any needed
R additions to capacity.
E

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F Definition
Term: Process chart O A chart that represents the sequence of work or the nature of
L events in process. It serves as a basis for examining and
D possibly improving the way the work is carried out.

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F Definition
Term: Procurement O The business functions of procurement planning,
L purchasing, inventory control, traffic, receiving, incoming
D inspection, and salvage operations.

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F Definition
Term: Profit O 1) Earnings from an ongoing business after direct costs of
L goods sold have been deducted from sales revenue for a
D given period. 2) Earnings or income after all expenses
(selling, administrative, depreciation) have been deducted
H from gross profit. 3) Earnings or income after adjusting for
E miscellaneous income and expenses (patent royalties,
R interest, capital gains) and tax from operating profit.
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F Definition
Term: Profit margin O 1) The difference between the sales and cost of goods sold
L for an organization, sometimes expressed as a percentage of
D sales. 2) In traditional accounting, this is the product selling
price minus the direct material, direct labor, and allocated
H overhead for the product, sometimes expressed as a
E percentage of selling price.
R
E

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F Definition
Term: Pull system O 1) In production, the production of items only as demanded
L for use or to replace those taken for use. 2) In material
D control, the withdrawal of inventory as demanded by the
using operations. Material is not issued until a signal comes
H from the user. 3) In distribution, a system for replenishing
E field warehouse inventories where replenishment decisions
R are made at the field warehouse itself, not at the central
E warehouse or plant.

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F Definition
Term: Purchasing O The term used in industry and management to denote the
L function of and the responsibility for procuring materials,
D supplies, and services.

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F Definition
Term: Push system O 1) In production, the production of items at times required
L by a given schedule planned in advance. 2) In material
D control, the issuing of material according to a given
schedule or issuing material to a job order at its start time.
H 3) In distribution, a system for replenishing field warehouse
E inventories where replenishment decision making is
R centralized, usually at the manufacturing site or central
E supply facility.

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F Definition
Term: Return on assets (ROA) O Net income for the previous 12 months divided by total
L assets.
D

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F Definition
Term: Return on investment (ROI) O A relative measure of financial performance that provides a
L means for comparing various investments by calculating the
D profits returned during a specified time period. In the theory
of constraints, it is calculated as throughput minus operating
H expense divided by investment.
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F Definition
Term: Reverse logistics O A complete supply chain dedicated to the reverse flow of
L products and materials for the purpose of returns, repair,
D remanufacture, and/or recycling.

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F Definition
Term: Reverse supply chain O Moving items from the consumer back to the producer for
L repair or disposal.
D

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F Definition
Term: Risk pooling O A method often associated with the management of
L inventory risk. Manufacturers and retailers that experience
D high variability in demand for their products can pool
together common inventory components associated with a
H broad family of products to buffer the overall burden of
E having to deploy inventory for each discrete product.
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F Definition
Term: Safety stock O 1) In general, a quantity of stock planned to be in inventory
L to protect against fluctuations in demand or supply. 2) In the
D context of master production scheduling, the additional
inventory and capacity planned as protection against
H forecast errors and short-term changes in the backlog.
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F Definition
Term: Sales and operations planning O A process to develop tactical plans that provide
(S&OP) L management the ability to strategically direct its business to
D achieve competitive advantage on a continuous basis by
integrating customer-focused marketing plans for new and
H existing products with the management of the supply chain.
E The process brings together all the plans for the business
R into one integrated set of plans.
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F Definition
Term: Seasonality O A repetitive pattern of demand from year to year (or other
L repeating time interval) with some periods considerably
D higher than others.

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F Definition
Term: Service industry O 1) In its narrowest sense, an organization that provides an
L intangible product. 2) In its broadest sense, all organizations
D except farming, mining, and manufacturing.

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F Definition
Term: Single-source supplier O A company that is selected to have 100 percent of the
L business for a part although alternate suppliers are available.
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F Definition
Term: Sole-source supplier O The only supplier capable of meeting (usually technical)
L requirements for an item.
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F Definition
Term: Sourcing O The process of identifying a company that provides a
L needed good or service.
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F Definition
Term: Spend management O Managing purchases of goods and services in a supply chain
L including outsourcing and procurement activities.
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F Definition
Term: Standard costs O The target costs of an operation, process, or product
L including direct material, direct labor, and overhead
D charges.

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F Definition
Term: Stockkeeping unit (SKU) O 1) An inventory item. 2) In a distribution system, an item at
L a particular geographic location.
D

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F Definition
Term: Stockout costs O The costs associated with a stockout. Those costs may
L include lost sales, backorder costs, expediting, and
D additional manufacturing and purchasing costs.

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F Definition
Term: Strategic planning O The process of developing a strategic plan.
L
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F Definition
Term: Strategic sourcing O A comprehensive approach for locating and sourcing key material
L suppliers, which often includes the business process of analyzing
D total-spend-for-material spend categories. There is a focus on the
development of long-term relationships with trading partners who
can help the purchaser meet profitability and customer satisfaction
H goals. From an information technology applications perspective,
E strategic sourcing includes automation of request for quote
R (RFQ), request for proposal (RFP), electronic auctioning (e-
E auction or reverse auction), and contract management processes.

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F Definition
Term: Subcontracting O Sending production work outside to another manufacturer.
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F Definition
Term: Supplier O 1) Provider of goods or services. 2) Seller with whom the
L buyer does business, as opposed to vendor, which is a
D generic term referring to all sellers in the marketplace.

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F Definition
Term: Supplier-input-process-output- O A high-level process map that shows substantial subprocess
customer (SIPOC) diagram L in an organization's process together with the structure of
D the process represented by the suppliers, inputs, outputs,
and customers. It defines the critical aspects of a process
H without losing the overall perspective.
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Fold each printed sheet in half lengthwise. The left side of the document will list the term and the right side will list the definition. Tape or staple
the open edges of your eFlashcards. Cut out your eFlashcards on the lines indicated. Note: There are four eFlashcards on each printed page.

F Definition
Term: Supplier relationship management O A comprehensive approach to managing an enterprise’s
(SRM) L interactions with the organizations that supply the goods
D and services the enterprise uses. The goal of this is to
streamline and make more effective the processes between
H an enterprise and its suppliers.
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F Definition
Term: Supply chain O The global network used to deliver products and services
L from raw materials to end customers through an engineered
D flow of information, physical distribution, and cash.

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F Definition
Term: Supply chain management (SCM) O The design, planning, execution, control, and monitoring of
L supply chain activities with the objective of creating net
D value, building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with demand,
H and measuring performance globally.
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F Definition
Term: Supply Chain Operations Reference- O A process reference model developed and endorsed by the
model (SCOR®) L Supply Chain Council as the cross-industry, standard
D diagnostic tool for supply chain management. It describes
the business activities associated with satisfying a
H customer’s demand. Use of the model includes analyzing
E the current state of a company’s processes and goals,
R quantifying operational performance, and comparing
E company performance to benchmark data.

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Fold each printed sheet in half lengthwise. The left side of the document will list the term and the right side will list the definition. Tape or staple
the open edges of your eFlashcards. Cut out your eFlashcards on the lines indicated. Note: There are four eFlashcards on each printed page.

F Definition
Term: Supply chain visibility O The ability of supply chain partners to access demand and
L production information from trading partners.
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F Definition
Term: Sustainability O Activities that provide present benefit without
L compromising the needs of future generations.
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F Definition
Term: Tactical buying O The purchasing process focused on transactions and
L nonstrategic material buying. It is closely aligned with the
D “ordering” portion of executing the purchasing
transaction process. The characteristics for this include
H stable, limited fluctuations, defined standard specifications,
E noncritical to production, no delivery issues, and high
R reliability concerning quality-standard material with very
E little concern for rejects.

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F Definition
Term: Tactical planning O The process of developing a set of tactical plans (e.g.,
L production plan, sales plan, marketing plan).
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the open edges of your eFlashcards. Cut out your eFlashcards on the lines indicated. Note: There are four eFlashcards on each printed page.

F Definition
Term: Target costing O The process of designing a product to meet a specific cost
L objective. This involves setting the planned selling price,
D subtracting the desired profit as well as marketing and
distribution costs, thus leaving the required manufacturing
H or target cost.
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F Definition
Term: Third-party logistics (3PL) O A buyer and supplier team with a third party that provides
L product delivery services. This third party may provide
D added supply chain expertise.

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F Definition
Term: Total cost of ownership (TCO) O In supply chain management, it is the sum of all the costs
L associated with every activity of the supply stream. The
D main insight that this offers to the supply chain manager is
the understanding that the acquisition cost is often a very
H small portion of this.
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F Definition
Term: Trend O General upward or downward movement of a variable over
L time.
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Fold each printed sheet in half lengthwise. The left side of the document will list the term and the right side will list the definition. Tape or staple
the open edges of your eFlashcards. Cut out your eFlashcards on the lines indicated. Note: There are four eFlashcards on each printed page.

F Definition
Term: Triple bottom line (TBL) O Measuring the economic, social, and environmental
L consequences of a firm's activities.
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F Definition
Term: Value-added O 1) In accounting, the addition of direct labor, direct
L material, and allocated overhead assigned at an operation.
D 2) In current manufacturing terms, the actual increase of
utility from the viewpoint of the customer as a part is
H transformed from raw material to finished inventory. It is
E the contribution made by an operation or a plant to the final
R usefulness and value of a product, as seen by the customer.
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F Definition
Term: Value chain O The functions within a company that add value to the goods
L or services that the organization sells to customers and for
D which it receives payment.

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F Definition
Term: Value stream O The processes of creating, producing, and delivering a good
L or service to the market. For a good, this encompasses the
D raw material supplier, the manufacturing and assembly of
the good, and the distribution network. For a service, this
H consists of suppliers, support personnel and technology, the
E service “producer,” and the distribution channel.
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Fold each printed sheet in half lengthwise. The left side of the document will list the term and the right side will list the definition. Tape or staple
the open edges of your eFlashcards. Cut out your eFlashcards on the lines indicated. Note: There are four eFlashcards on each printed page.

F Definition
Term: Value stream mapping O Drawing the current production process/flow and then
L attempting to draw the most effective production process/
D flow.

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F Definition
Term: Vendor O Any seller of an item in the marketplace.
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F Definition
Term: Warehouse management system O A system that manages all processes that a warehouse
(WMS) L carries out. These processes include receiving, picking, and
D shipping.

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