| absolute error | The absolute value of the forecast error.
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| acceptable quality level (AQL) | In acceptance sampling, it identifies the quality level required in order for lots to be considered to be good. See acceptance sampling.
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| acceptance sampling | Extracting a sample group from a large quantity of products or components of interest. Also known as a “lot,” and, based on the quality level of the sample group, the entire lot is either god or bad.
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| action loyalty | The fourth phase of customer loyalty sustained by commitment and inertia.
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| activation | Running a machine or resource when it doesn’t contribute to throughput.
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| activity | A basic unit of work.
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| activity drivers | Used to measure the demands that cost objects place on activities and to assign the cost of associated activities to cost objects. See cost object.
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| actual costs | Past payments for currently owned resources.
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| aesthetics | A dimension of quality that includes looks, sound, and smells.
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| aggregate demand | The total demand for all products or services.
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| aggregate planning | A capacity planning tool that uses inventory and variable labor to deal with demand fluctuations.
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| agile | The ability to respond quickly to change, to customer needs, and to internal and external forces.
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| allowance | When constructing a time standard using a stopwatch time study or predetermined motion times, the addition of time to the standard for personal, restroom, and other time.
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| appraisal costs | Costs associated with product inspection, testing, and auditing of quality-related systems.
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| AQL | See acceptable quality level.
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| arrival process | The pattern in which or frequency with which customers arrive at the queue.
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| assembler | The final step of the four stages of product value creation, which puts together the outputs of fabricators.
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| assemble-to-order | Producing major components of a product prior to receiving an order and assembling the product to meet a specific order.
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| assembly buffer | A time buffer placed immediately prior to an assembly for nonconstrained components.
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| assembly line | A narrowly defined manufacturing assembly process made up of equipment with little flexibility in a product-oriented layout.
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| asset recovery | Disposition of a product returned through the reverse logistics network.
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| assignable cause variability | Variability in process outcomes that results from special causes that are not part of the inherent random fluctuation of the process and indicate that something in the process has changed.
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| assurance | A dimension of quality that relates to the level of trust or confidence generated by employees.
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| attribute | A product or service characteristic that can be classified as either conforming or not conforming to specifications.
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| backlog | A queue of orders waiting to be processed.
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| backward scheduling | When a completion date or due date is known and that date must determine a start date.
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| balance delay | In a product-oriented layout, this is the lost resource utilization resulting from differences in processing time at each work center. See line balancing.
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| balanced scorecard | A performance measurement system that combines financial and nonfinancial measures of business performance.
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| balking | When a customer views a queue and does not enter it because it is too long.
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| basic producer | A manufacturer that extracts raw materials from natural resources.
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| batch processing | A system in which a group of identical products or customers is processed through one step in the process and then the entire group moves to the next step.
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| batch production | A type of production in which identical products or customers are processed through one step, and then the entire batch goes on to the next step.
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| beginning on-hand inventory | The quantity of inventory on hand at the beginning of a time period.
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| benchmarking | Identification of best practices of other companies.
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| best operating level | The level of demand or “load” on a system that results in the lowest cost per unit produced or processed.
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| bill of capacity | A statement of the time required on each resource needed to produce a product.
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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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| bottleneck | A constraint in a production system.
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| BPA | See business process analysis.
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| breakbulk ship | A ship that transports products in its hull.
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| breakeven analysis | An analytical process that compares the fixed and variable costs of alternatives in order to identify the best alternative for a given volume of output.
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| bullwhip effect | The increasing variability of demand as one moves upstream in a supply chain.
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| business process analysis (BPA) | A productivity improvement approach that focuses on large processes and the transitions between different departments.
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| business strategy | Defines the range of activities for a business, setting priorities so that it accomplishes the overall corporate strategy.
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| C-chart | A process control chart used to monitor counts of nonconformities per unit.
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| calling population | The population of arriving customers or orders.
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| capabilities | The abilities a business has that result from its processes. Capabilities create value.
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| capability chain | The capabilities added by all members of a supply chain.
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| capability index | A measure of process capability.
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| capacity | The level of productive output of an organization in a specified period of time.
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| capacity requirements planning | A detailed capacity planning approach in manufacturing that uses the planned releases from MRP to provide the quantity of units that must be produced.
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| carrying cost | Costs associated with carrying inventory.
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| cash-to-cash cycle | The amount of time between the cash outlay required for purchasing direct materials or inventory consumed during the production of the product or service and the actual receipt of the payment when the product or service is sold.
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| causal forecast | A forecast that uses extrinsic data as a predictor of demand.
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| cause and effect diagram | A tool used to aid in the identification of root causes or quality problems.
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| cellular layout | A layout in which products whose processes require similar resources are grouped into product families. Each cell contains all the resources necessary to produce products in that family.
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| changeover cost | The cost of changing equipment from producing one product or service to another.
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| changeover time | The time required to change equipment from producing one product or service to another.
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| check sheet | A quality analysis tool used to tally occurrences of interest.
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| cognitive loyalty | The first phase of customer loyalty based on information customers receive.
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| collaborative planning, forecasting, and replenishment (CPFR) | An approach to demand planning in supply chains in which partners negotiate and agree on a plan for meeting demand.
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| common cause variability | Variability in process outcomes that results from the inherent random fluctuation of the process.
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| competitive priorities | Key value attributes that are highly influenced by operations management: cost, quality, dependability of delivery, flexibility, and response time.
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| conative loyalty | The third stage of customer loyalty when action results from habit and behavioral commitment
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| concurrent engineering | Performing product and service development engineering functions in tandem to reduce time and improve communication.
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| consolidation warehousing | Holding inventory received from suppliers in warehouses until it is needed by retailers.
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| constraint | Anything that inhibits a system’s progress toward its goals.
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| constraint buffer | A time buffer placed immediately prior to a constraint.
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| constraint management | A framework for managing the constraints of a system in a way that maximizes the system’s accomplishment of its goals.
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| consumer’s risk | In acceptance sampling, the probability of accepting a bad lot, designated as β.
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| containership | A ship designed to carry cargo that is packed in standard size metal containers.
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| contingency plans | Alternative or back-up plans to be used if an unexpected event makes the normal plans infeasible.
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| contingent workers | Temporary workers employed by an agency and contracted to work for another firm.
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| continuous improvement | A process of always seeking ways to improve existing processes and tasks.
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| continuous process improvement | Ongoing improvement efforts for service-oriented and product-oriented production processes that focus on eliminating variability.
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| continuous processing | In a continuous processing environment, this is any equipment or workstation that is dedicated to one product or service, yielding high levels of efficiency.
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| continuous replenishment | The delivery of inventory, frequently in small quantities.
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| control limits | In a process control chart, these are typically three standard deviations above and below the process mean.
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| converter | The second stage of product value creation, which refines natural resource inputs.
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| core competencies | Those things a firm does very well and that distinguish it from competitors.
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| corporate strategy | In the broadest strategy, it defines the businesses that a corporation will engage in and how resources will be expended.
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| cost | The expenses associated with ownership.
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| cost leader strategy | A strategy that seeks to price goods and services lower than competitors.
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| cost object | An item for which costs are measured and assigned.
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| cost of quality (COQ) | All of the costs associated with maintaining the quality of goods and services.
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| cost per unit | Total cost for producing the units of interest divided by the number of units produced.
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| cost traceability | The ease with which costs can be assigned to cost objects.
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| CR | See critical ratio.
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| craft production | Production of goods by highly skilled and specialized artisans.
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| crash time | The absolute minimum time in which each activity could be accomplished.
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| crashing | A methodical approach to reducing a project’s duration.
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| critical path | The path that takes the longest.
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| critical ratio (CR) | A sequencing rule that prioritizes by the ratio of the time remaining to the time needed to complete the job. The smallest ratio goes first.
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| CRM | See customer relationships management.
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| cross-docking | Continuous shipment from suppliers to warehouses, where goods are redirected and delivered to retailers in continuous shipments.
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| cross-training | Training employees to do a variety of jobs.
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| customer focus | The first principle of total quality management, which dictates that the customer determines what quality is.
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| customer relationship management (CRM) | Systems designed to improve relationships with customers and improve the business’s ability to identify valuable customers. They include call center management software, sales tracking, and customer service.
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| cycle | A component of a time series that is a pattern that repeats over a long period of time.
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| cycle time | The frequency of products emerging completed from a product-oriented layout.
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| data mining | Analysis of data generated by customer interaction.
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| decline stage | The final stage of a product or service life cycle as demand disappears.
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| decouple | To reduce the direct dependency of a process step on its predecessor.
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| demand chase | An aggregate planning approach that uses hiring and firing of employees to increase and decrease output to match fluctuating demand.
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| dependability of delivery | The ability of the firm to deliver products and services to the customer when promised.
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| dependent demand inventory | Inventory whose demand is determined by the production schedule for finished products. Dependent demand items usually are components and raw materials.
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| design capacity | The capacity a facility is designed to accommodate on an ongoing basis.
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| design for environment | Including environmental concerns in the product design.
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| design for logistics | Including logistics and transportation concerns in the product design process, usually involving effective packaging.
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| design for manufacture and assembly (DFMA) | The practice of designing products with the capabilities of manufacturing processes in mind.
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| DFMA | See design for manufacture and assembly.
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| differentiating capabilities | Capabilities possessed by a firm that distinguish it from its competitors.
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| differentiation strategy | A strategy that seeks to create products and services that are different from those of competitors.
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| direct labor | Labor that can be traced directly to the good or service being produced.
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| direct materials | Materials that can be traced directly to the good or service being produced.
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| direct shipment | Shipping directly from manufacturer suppliers to retailers.
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| disruptive technology | A new technology that displaces an existing technology.
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| dollar days | The dollar value of an item in inventory multiplied by the number of days until it will be sold.
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| double-stacking | Stacking containers two-high on railcars.
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| durability | How long a product will last.
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| earliest due date (EDD) | A sequencing rule that prioritizes customers or jobs by the due date, earliest first.
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| early start schedule | In project management calculations, this is the completion of the early start and early finish times. Also known as the forward pass.
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| economic order quantity model | An approach used to determine an order quantity that minimizes the sum of ordering and carrying costs.
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| economic value added (EVA) | A productivity measure that indicates whether or not a business is creating wealth from its capital. It is equal to the after-tax operating profit minus the annual cost of capital.
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| EDD | See earliest due date.
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| EDI | See electronic data interchange.
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| efficiency | The ratio of actual output to standard output.
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| electronic data interchange (EDI) | Electronic exchange of information between customers and suppliers instead of paper transactions.
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| empathy | A dimension of quality that results from the approachability and sensitivity of employees.
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| ending on hand inventory | The quantity of inventory on hand at the end of a time period.
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| environmental scanning | Examining the environment for potential impact on strategic decisions.
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| expected costs | Forecasted payments for future resources.
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| experience detractors | In moment-of-truth analysis, when an experience viewed by the customer is viewed as a detractor or as something that signifies a reduction in the quality of service.
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| experience enhancers | In moment-of-truth analysis, these are experiences that make the customer feel good about the interaction and make the interaction better.
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| external customer | Consumers and businesses that buy products and services.
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| external failure costs | Costs incurred when a customer is exposed to poor quality.
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| fabricator | The third stage of product value creation, which takes inputs from converters and transforms them into components used by assemblers.
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| facilities | The buildings and structures that house various aspects of a business.
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| FCFS | See first come, first served.
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| feature | A dimension of quality that consists of additional capabilities of products or services that can be added.
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| finished good inventory | Inventory consisting of products that have completed all stages of production.
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| first come, first served (FCFS) | A sequencing rule that prioritizes by when a person or job arrived in the queue.
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| FIT | See forecast including trend.
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| fixed costs | Costs that are not affected by volume.
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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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| fixed-quantity reorder point (ROP) model | An independent demand inventory management system that reorders when inventory drops to a specific level.
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| focus strategy | A strategy that targets a small segment of the market with products or services.
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| forecast bias | The tendency of a forecast to be too high or too low.
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| forecast including trend (FIT) | Trend-adjusted exponential smoothing.
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| forward scheduling | A technique used when a start date is known, and a completion date needs to be determined.
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| full truckload (FTL) | Transporting goods in a truck that is full.
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| functional layout | A process-oriented layout.
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| functional strategy | A strategy that establishes the link between functional decision making and business strategy.
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| Gantt chart | A horizontal bar graph with time on the x axis and the different resources on the y axis. It displays the amount of time required on each resource and when that time is required.
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| gross requirements | In material requirements planning, the total quantity needed to meet demand.
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| growth stage | The second stage of a product or service life cycle, where demand begins to increase.
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| histogram | A bar graph that plots a measurement on the y axis and the frequency of the occurrence of the measurement on the x axis.
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| house of quality | A set of matrices used to guide the quality function deployment process.
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| independent demand inventory | Inventory whose demand is dictated by the marketplace.
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| industry-focused benchmarking | The identification of the best practices among competitors.
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| innovation | A dramatic change from a new idea.
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| integrated transport carrier | Uses a combination of whatever modes are best to move goods from origin to destination.
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| integrative management framework | A management approach or “philosophy” that guides day-to-day decisions in a way that is consistent with a firm’s profitability goals. Examples include lean systems, constraint management, and supply chain management.
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| intermodal transport | At least two different transportation modes are used in moving the goods from origin to destination.
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| internal customer | An entity of a business that receives an output of some other part of the same business.
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| introduction stage | The first stage of a product or service life cycle.
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| inventory (traditional definition) | Materials used in the production of products and services. Examples include raw materials inventory, work-in-process inventory, and finished goods inventory.
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| inventory (constraint management definition) | Money invested in things the system intends to sell.
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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 quantity on hand, the cost, and so on.
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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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| inventory waste | Waste that consists of excess inventory over and above that which is necessary.
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| job shop | A manufacturer, typically a process-oriented layout, that is able to produce custom tools and equipment for others because of its flexibility.
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| jockeying | When customers switch lines hoping to move faster.
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| kanban | A system used to link production rate to demand.
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| Kano model | A business model that proposes that there are actually three important levels of quality characteristics for customers: must-be, one-dimensional, and delighters.
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| keiretsu | The close-knit networks of suppliers of Japanese manufacturers.
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| landed cost | A product’s cost including all of the per product costs of logistics activities.
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| late start schedule | In project management computations, this is the computing of the late start and late finish values. Also known as the backward pass.
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| lean | Manufacturing and service processes that have very low levels of waste.
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| lean production | Producing at minimum cost.
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| lean system | A productive system that functions with little waste or excess, usually with low inventory levels.
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| learning curve | A curve that shows the reduction in the time it takes to complete a task as the number of times it has been completed increases.
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| learning rate | The amount of improvement obtained as a task is repeated.
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| less than truckload (LTL) | Transporting goods in a truck that is not completely full.
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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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| life cycle | A pattern of demand growth and decline that occurs from the introduction of a product to its obsolescence.
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| line balancing | A process used to balance the times among work centers in a product-oriented layout to reduce balance delay. See balance delay.
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| line of visibility | The separation between service activities that take place in the “back room” and those that are exposed to the customer.
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| logistics | The flow and storage of goods, services, and related information from production to consumption.
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| lot-for-lot ordering | In material requirements planning, ordering exactly the amount of the net requirements.
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| lot tolerance percent defective (LTPD) | In acceptance sampling, the level of quality in the lot that would be unacceptable to the customer. See acceptance sampling.
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| LTPD | See lot tolerance percent defective.
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| machine utilization | A productivity measure for machines that is equal to actual running time divided by time available.
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| MAD | See mean absolute deviation.
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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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| make-to-order | Producing a product when an order is received.
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| make-to-stock | Producing a product before an order is received and storing the product.
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| MAPE | See mean absolute percentage error.
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| maquiladoras | Foreign-owned (typically U.S.-owned) manufacturing plants in Mexico.
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| mass production | High volume production of standardized products.
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| mass customization | The ability to customize in high volumes.
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| master production schedule (MPS) | A schedule of end products that must be completed in a specific time period.
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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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| maturation stage | The third stage of a product or service life cycle, when demand begins to level off.
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| mean absolute deviation (MAD) | A measure of the absolute forecast error that is the mean of the absolute values of the forecast errors.
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| mean absolute percentage error (MAPE) | The mean of the absolute errors stated as a percentage of demand.
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| mean forecast error (MFE) | A measure of forecast bias that is the mean of the forecast errors.
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| MFE | See mean forecast error.
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| mission statement | A short statement of what a business does, what its values are, who its market is, and why.
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| moment-of-truth analysis | The identification of the critical instances when a customer judges service quality and determines the experience enhancers, standard expectations, and experience detractors.
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| MPS | See master production schedule.
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| MRO | See maintenance, repair, and operating inventory.
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| MRP | See material requirements planning.
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| multifactor rating | A decision-making technique used for considering a variety of factors by assigning each factor a level of importance.
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| net present value (NPV) | The difference between the market value of a product or service and the cost of creating it.
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| net requirements | In material requirements planning, gross requirements minus beginning on-hand inventory.
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| netting | The process of computing net requirements.
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| network diagram | A diagram similar to a flow chart that illustrates the steps in a project.
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| nonproduction costs | The costs of selling and administration.
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| normal time | In a time study, this is the observed time after adjustment by the performance rating.
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| NPV | See net present value.
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| observed time | When performing a time study, this is the average of the times of observations.
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| operating characteristics (OC) curve | Used in the development of acceptance sampling plans, this is a graph that demonstrates how well the plan discriminates between good and bad quality by showing the probability of accepting a lot of LTPD quality (a bad lot) and the probability of rejecting a lot of AQL quality (a good lot).
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| operating expenses | In constraint management, this is the money the system spends turning inventory into throughput.
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| order cost | The fixed cost associated with ordering inventory.
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| order loser | Product or service characteristics or attributes that repel particular customers.
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| order qualifier | Product or service characteristics that are necessary, but not sufficient to result in winning the order.
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| order winner | A product or service characteristic that is most important to a particular customer and results in the customer ordering.
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| out-of-pocket costs | Cash payments made for resources.
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| overhead | All nondirect costs that exist after direct labor and direct materials have been identified.
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| overproduction waste | The waste caused by producing in excess of demand.
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| P-chart | A process control chart used to monitor the percent defective in a sample.
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| Pareto analysis | A process used to separate the relatively few important problems from the many unimportant ones.
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| Pareto chart | A bar graph used to categorize data and help establish priorities.
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| path | A sequence of activities that begins at the start of the project and goes to its end.
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| perfect order | An order that arrives on time as promised, is of the correct quantity, is not damaged, and also includes all of the agreed-upon services.
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| performance | A dimension of quality that results from specific characteristics and capabilities of the product or service.
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| performance rating | When performing time studies, this is an adjustment made to take into account whether the observed worker was faster or slower than normal.
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| period costs | Costs of resources used in nonproduction elements of a business.
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| periodic review system | An independent demand management system that orders inventory on fixed time intervals.
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| phase | A distinct step in a process that requires a separate queue.
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| pipeline inventory | Inventory in transit.
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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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| planning horizon | The distance into the future one plans.
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| poka-yoke | A device that makes it impossible or nearly impossible to do something incorrectly.
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| postponement | Delaying commitment to final product configurations for as long as possible in the supply chain.
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| predetermined motion time | The time required to complete small aspects of tasks collected from a large number of observations and stored in a database so that future time standards can be created without needing a stopwatch time study.
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| prevention costs | Costs associated with efforts to prevent errors or defects from happening.
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| process capability | The ability of a process to consistently meet customer expectations, demonstrated by the control limits being within the customer specifications.
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| processes | Organized tasks accomplished by grouping resources together.
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| process map | A diagram of the steps in a process.
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| process-focused benchmarking | Benchmarking that focuses on similar processes of other companies, but those companies need not be competitors or even in the same industry.
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| process-oriented layout | A layout that is organized by the function of each resource, allowing steps to be done in any sequence.
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| processing waste | The waste that results from steps in production processes that do not contribute value or that create costs that are greater than the value they create.
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| producer’s risk | In acceptance sampling, this is the probability of rejecting a good lot, indicated by α.
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| product costs | Costs of resources used to make products.
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| product defect waste | The waste of capacity, inventory, and labor resulting from products that do not meet customer specifications.
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| production batch | The quantity produced at a workcenter before changing over to produce something else.
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| production costs | Costs associated with the actual production of goods or services.
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| production lead time | The amount of time a product spends in a productive system in order to be completed.
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| product-oriented layout | A layout that provides the necessary resources in a fixed sequence that matches the sequence of the steps required to produce the product or service.
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| productivity | A measure of how well inputs are used by a business, typically the ratio of an output to the input of interest.
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| profit margin | Profit generated per dollar of sales.
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| profitability | A measure of the productivity of money invested in a business, typically a ratio of net income to some input such as net sales or total assets.
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| project | A set of activities aimed at meeting a goal, with a defined beginning and end.
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| project management | A variety of techniques that recognize the dependencies present among the project activities and manage those activities in order to complete the project on time.
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| protective capacity | A layer of capacity above that which is absolutely required to meet known demand, providing the firm with the ability to handle occasional problems and enabling them to handle special requests.
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| QFD | See quality function deployment.
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| qualitative forecast | A forecast based on qualitative information.
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| quality | Meeting customer expectations.
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| quality function deployment (QFD) | A widely used approach that translates customer needs into product and service designs that guide the corresponding process requirements.
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| quantitative forecast | A forecast based on quantitative data.
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| queue configuration | The physical design of the lines and servers in a queuing system.
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| queue discipline | The rules that management enforces to determine the next customer served in a queue.
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| R-chart | A process control chart used to monitor sample ranges.
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| random fluctuation | Unpredictable variation in demand that is not due to trend, seasonality, or cycle.
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| recovery | The way a business deals with an external failure when trying to satisfy the customer despite the failure.
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| recovery plan | Policies for how employees are to deal with quality failures so that customers will return.
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| reengineering | Starting from a clean slate to improve a process.
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| reliability | A dimension of quality resulting from a company’s consistency of performance.
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| reneging | When a customer joins the queue, but then leaves it because the wait was too long.
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| repetitive processing | Processing on a continuous basis.
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| replenishment lead time | The time required to receive inventory that has been ordered.
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| reputation | A dimension of quality resulting from a company’s performance history.
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| resource driver | A tool used to measure demands placed on resources by activities and to assign the costs of those resources to activities.
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| response time | The time required to complete a customer’s request.
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| responsiveness | A dimension of quality resulting from the company’s ability to respond quickly.
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| retailer-supplier partnerships (RSPs) | A retailer/supplier alliance that changes the way inventory is delivered and the way it changes hands.
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| return on assets (ROA) | Profit per dollar of assets.
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| return on equity (ROE) | Profit per dollar of equity.
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| risk pooling | Inventory held in one warehouse to service a large number of retailers requires less inventory than if held at the individual retailers.
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| ROA | See return on assets.
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| robust design | Designing products and services so that they perform over a wide range of conditions.
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| ROE | See return on equity.
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| rough-cut capacity planning | A detailed capacity planning approach used in manufacturing that uses the master production schedule to provide the quantity of units that must be produced.
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| RSFE | See running sum of forecast error.
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| run chart | A plot of a variable of interest on the y axis and time on the x axis.
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| running sum of forecast error (RSFE) | A measure of forecast bias that is the sum of forecast error and is updated as each new error is calculated.
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| safety stock | Additional inventory used to help meet demand uncertainty.
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| saturation stage | The fourth stage of a product or service life cycle, when demand shifts to the beginning of its decline.
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| scatter diagram | A chart that seeks to identify relationships between variables by plotting one variable on the x axis and another on the y axis.
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| seasonality | A pattern in a times series that repeats itself at least once a year.
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| segmentation | Identification of different groups of customers based on their characteristics.
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| server | A resource that is able to complete the process or service that customers or jobs wait in queue for.
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| service blueprint | A type of flow diagram used for services that identifies decision points, failure points, and the line of visibility.
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| service encounter | The interaction and the processes in which the customer is involved.
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| service level | The percent of orders satisfied from existing inventory.
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| service process | The capacity of the server(s), the distribution of service times, and other behaviors of the server that affect the number of customers the server can handle.
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| service–profit chain | A framework used to link employee satisfaction to profitability.
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| serviceability | A dimension of quality that consists of the amount of effort required to repair a product.
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| setup time | The time required to change equipment from producing one product or service to another.
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| shipping buffer | A time buffer immediately prior to shipping.
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| shortest processing time | A sequencing rule that gives highest priority to the job with the shortest expected processing time.
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| simple exponential smoothing | A sophisticated type of moving average that uses a smoothing constant to weight the previous demand and establish the responsiveness of the forecast.
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| six sigma quality | An approach used to improve quality by reducing the likelihood of a defect occurring as a result of random fluctuation. In six sigma quality, six standard deviations above and below the mean are required to be within the customer’s specifications.
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| slack | Time until due minus the expected processing time. As a sequencing rule, the highest priority is given to the job with the least amount of slack.
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| slack per remaining operation | Slack divided by the number of operations remaining until the job or order is completed.
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| specifications | Precisely written expectations for a product or service used as the standard for quality evaluation.
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| standard | A measure that should be achieved.
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| standard expectation | In moment-of-truth analysis, these are experiences that are expected and taken for granted by customers.
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| standard time | The result of a stopwatch time study after an adjustment by the performance rating and after allowances have been made.
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| statistical fluctuation among dependent events | Disruptions caused by accumulating variability among processing times of processes that depend on each other.
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| statistical process control | A preventive approach to managing quality by monitoring processes in a way that identifies potential problems before defects are even created.
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| statistical process control chart | A specific type of run chart used to plot measurements or test outcomes against time and distinguish between variability caused by random fluctuation and variability that has an assignable cause. See run chart.
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| stockout | An instance when demand cannot be satisfied by existing inventory.
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| stockout cost | The cost associated with not having inventory when a customer demands it.
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| stopwatch time study | The process of developing a time standard by actually observing and timing workers.
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| strategy | The means by which a company positions itself for future profitability.
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| substitute quality characteristics | In quality function deployment, these are terms used to translate the customer needs into a description of the product or service that is in technical language.
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| supply chain | The path of value creation, from basic producer through consumer, including all transportation and logistics services that connect them.
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| supply chain management | The management of supplier–customer relationships.
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| supply-chain network optimization | Optimization of decisions across the entire geographical network of the supply chain.
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| takt time | How often you must produce a product in order to meet demand.
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| tangibles | A dimension of service quality that includes the physical items that are included in the service.
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| testing | A specific type of inspection used when a visual inspection cannot reveal whether products meet specifications.
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| third party logistics provider (3PL) | A provider of logistics services such as warehousing or transportation and logistics.
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| throughput | In constraint management, dollars generated by sales.
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| time buffer | A buffer of inventory that will keep a resource busy for a specified amount of time.
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| time standard | The expected time for a worker to complete a task.
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| timeliness | The speed at which a business completes tasks and the degree to which it completes tasks on schedule and as promised.
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| times series forecasting | Using past demand to forecast the future.
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| total costs | The costs of all resources obtained in a particular period.
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| total involvement | A commitment at all levels of the firm, from the very top to the very bottom.
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| tracking signal | The size of the cumulative forecast error expressed as MADs.
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| transfer batch | The quantity produced at a workcenter before transferring the products to the next step in the process.
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| transportation waste | The waste that results from excessive materials handling and movement.
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| trend | A component of a time series that causes demand to increase or decrease.
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| trend adjusted exponential smoothing | An exponential smoothing technique that includes a smoothing constant for trend.
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| two-bin system | A primitive reorder point inventory system in which two containers of inventory are kept. An order for more is placed when one container becomes empty.
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| unnecessary motion waste | The waste of human resources caused by unnecessary labor due to ineffective job design.
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| utilization (constraint management definition) | The time a resource is used and contributing to throughput divided by the time the resource was available.
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| utilization (traditional definition) | The time a resource is used divided by the time the resource was available.
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| value | The amount a customer is willing to pay for a product or service, sometimes thought of as benefits divided by cost.
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| variable costs | Costs that increase or decrease as units produced increase or decrease.
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| variance | The difference between desired cost or consumption rate and the actual cost or consumption rate.
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| variance analysis | A process used to compare actual consumption of inventory and capacity to ideal consumption levels.
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| vendor managed inventory (VMI) | A retailer-supplier partnership in which the supplier manages the inventory in the retail store and in some cases maintains ownership of the inventory until it is purchased by the consumer.
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| waiting time waste | The waste that results from customer orders, inventory, or completed products waiting in queue for a process to begin.
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| work elements | Small tasks that make up process steps.
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| work sampling | A process of recording what a worker is doing to determine how employee time is spent.
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| workforce | The employees required to produce a product or service.
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| work-in-process inventory | Inventory that has begun processing, but has not yet completed it.
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| X-bar chart | A process control chart that is used to monitor the sample means of variables that result from a process.
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| yield management | An approach used in capital-intensive services that attempts to obtain maximum revenues through differential pricing, reservation systems, and overbooking.
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