CPIM Basic Vocabulary
ABC Classification - answer The classification of a group of items in decreasing order of
annual dollar volume (price * projected volume) or other criteria. This array is then split
into three classes A,B,C. (Pareto focus on the vital few compared to the tribal many) A =
10-20% of item but 50 - 70% of annual dollar volume. B = 20% of items, 20% of annual
dollar volume.
Advanced Planning and Scheduling (APS) - answerMethods that deal with the analysis
and planning of logistics and manufacturing. For the short, medium, and long term time
periods. APS describes any computer programs that use advanced mathematical
algorithms or logic to (optimize, simulate) finite capacity scheduling, sourcing, capital
planning, resource planning, forecasting, demand management and others. The five
components are (1.demand planning, production planning, production scheduling,
distribution planning, and transportation planning). APS kicks out different scenarios for
management to choose from.
Advance Ship Notice (ASN) - answerThis is a notification of pending delivers similar to a
packing list. Often sent electronically.
And0n - answerA sign board with signal lights used to make workers and management
aware of a quality, quantity, or process problem.
Anticipation Inventories - answerAdditional Inventory above basic pipeline stock to
cover PROJECTED trends of increasing sales, planned sales production, promotion
programs, seasonal fluctuations, plant shutdowns, and vacations.
Assemble-to-Order - answerA production environment where a good or service can be
assembled AFTER the receipt of a CUSTOMER ORDER. Receipt of an order initiates
assembly of customized product. Useful when a large number of end products can be
assembled from common components.
Assembly line - answerAn assembly process where equipment and work centers are
laid in a sequence in which the raw materials and parts are assembled.
Assignable Cause - answerA source of variation that can be isolated. Especially when
it's significantly larger magnitude or different origin distinguishes it from random causes
of variation. You can tell where the cause of the issue is coming from.
Average Inventory - answer1/2 the average lot size plus the safety stock, when demand
and lot sizes are expected to be relatively uniform over time. May be taken over several
periods.
,Back Scheduling - answerA technique for calculating operation start due dates. The
schedule is computed starting with the due date of the order working backward in order
to determine the required start date and/or due dates for each operation.
Backflush - answerA method of inventory bookkeeping where the book (computer)
inventory of components is automatically reduced after completion of activity on the
component's upper-level parent item based on what should have been used as
specified on the bill of material and allocation records. This approach has the
disadvantage of a built-in differential between the book record and what is physically in
stock.
(Inventory adjusts to what should have been used)
Backhauling - answerThe process of a transportation vehicle returning from the original
destination point to the point of origin.
The 1980 Motor Carrier Act deregulated interstate commercial trucking and thereby
allowed carriers to contract for the return trip. The backhaul can be with a full, partial, or
empty load. An empty backhaul is called deadheading.
Backlog - answer(Good) All customer orders that have been received but not yet
shipped. (open orders or open board)
Backorder - answer(Bad) An unfulfilled customer order or commitment. A backorder is
an immediate (or past due) demand against an item whose inventory is insufficient to
satisfy the demand.
Balance Sheet - answerA financial statement showing the resources owned, the debts
owed, and the owner's share of a company at a given point in time.
Bar Code - answerA series of alternating bars that can be printed or stamped
representing encoded information that can be read electronic readers. This is used to
facilitate timely and accurate input of data to a computer system.
Batch - answer1. A quantity scheduled to be produced or in production.
2. For discrete products, the batch is planned to be the standard quantity, these batches
can be broken into lots.
3. In non-discrete products, the batch is the quantity that is planned to be produced.
Batch Picking - answerA method of picking orders where order requirements are
aggregated by product across orders to reduce movement to and from product
locations. The aggregated quantities of each product are then transported to a common
area where the individual orders are constructed. (Having 3 orders of 20 shirts and 2
order of 20 pens --> getting 60 shirts at and 40 pens all at once, coming back and
creating the individual orders)
, Bill of lading (uniform) - answerA carrier's contract and receipt for goods the carrier
agrees to transport from one place to another and to deliver to a designated person. In
case of loss, damage, or delay, the bill of lading is the basis for filing freight claims.
Bill of material (BOM) - answerA listing of all subassemblies, intermediate parts, and
raw materials that go into a parent assembly, showing the quantity of each required to
make an assembly. Used with MPS to decide what items purchase requisitions and
production orders must be released.
Bonded warehouse - answerBuildings or parts of buildings that are designated by the
US Secretary and Treasury for storing imported merchandise, operated under US
Customs supervision.
Bottleneck - answerA facility, function, department, or resource whose capacity is less
that the demand place upon it.
Break-Bulk - answerDividing truckloads of homogenous items into smaller, more
appropriate quantities for use.
Break-Even point - answerThe level of production or the volume of sales where
operations is neither profitable or unprofitable. This point is the intersection of the total
revenue and the total cost curves.
Buffer - answerA quantity of materials awaiting further processing. In the theory of
constraints, buffers can be time or material and support throughput and/or due date
performance.
ATP - answerThe uncommitted portion of a companies inventory. (Uncommitted
inventory balance in the first period and is normally calculated for each period in which
an MPS receipt is scheduled.
Buffer mgmt. - answerProcess where all expediting in shop is driven by what is
scheduled to be in the buffers. By doing so, the shop is better able to avoid idle time
and missed customer due dates as well as identify areas for improvement.
Bullwhip effect - answerAn extreme change in the supply position upstream in a supply
chain generated by a small change in demand downstream. This can be eliminated by
synchronizing the supply chain.
Business Plan - answerA statement of long-range strategy and revenue, cost, and profit
objectives usually accompanied by budgets, a projected balance sheet, and a cash flow
statement. Usually stated in terms of dollars and grouped by product family.
Capable to promise (CTP) - answerCapable to Promise (CTP) extends Available to
Promise by taking into account capacity information. Whereas ATP only considers
material availability and assumes infinite capacity resources, CTP considers availability
ABC Classification - answer The classification of a group of items in decreasing order of
annual dollar volume (price * projected volume) or other criteria. This array is then split
into three classes A,B,C. (Pareto focus on the vital few compared to the tribal many) A =
10-20% of item but 50 - 70% of annual dollar volume. B = 20% of items, 20% of annual
dollar volume.
Advanced Planning and Scheduling (APS) - answerMethods that deal with the analysis
and planning of logistics and manufacturing. For the short, medium, and long term time
periods. APS describes any computer programs that use advanced mathematical
algorithms or logic to (optimize, simulate) finite capacity scheduling, sourcing, capital
planning, resource planning, forecasting, demand management and others. The five
components are (1.demand planning, production planning, production scheduling,
distribution planning, and transportation planning). APS kicks out different scenarios for
management to choose from.
Advance Ship Notice (ASN) - answerThis is a notification of pending delivers similar to a
packing list. Often sent electronically.
And0n - answerA sign board with signal lights used to make workers and management
aware of a quality, quantity, or process problem.
Anticipation Inventories - answerAdditional Inventory above basic pipeline stock to
cover PROJECTED trends of increasing sales, planned sales production, promotion
programs, seasonal fluctuations, plant shutdowns, and vacations.
Assemble-to-Order - answerA production environment where a good or service can be
assembled AFTER the receipt of a CUSTOMER ORDER. Receipt of an order initiates
assembly of customized product. Useful when a large number of end products can be
assembled from common components.
Assembly line - answerAn assembly process where equipment and work centers are
laid in a sequence in which the raw materials and parts are assembled.
Assignable Cause - answerA source of variation that can be isolated. Especially when
it's significantly larger magnitude or different origin distinguishes it from random causes
of variation. You can tell where the cause of the issue is coming from.
Average Inventory - answer1/2 the average lot size plus the safety stock, when demand
and lot sizes are expected to be relatively uniform over time. May be taken over several
periods.
,Back Scheduling - answerA technique for calculating operation start due dates. The
schedule is computed starting with the due date of the order working backward in order
to determine the required start date and/or due dates for each operation.
Backflush - answerA method of inventory bookkeeping where the book (computer)
inventory of components is automatically reduced after completion of activity on the
component's upper-level parent item based on what should have been used as
specified on the bill of material and allocation records. This approach has the
disadvantage of a built-in differential between the book record and what is physically in
stock.
(Inventory adjusts to what should have been used)
Backhauling - answerThe process of a transportation vehicle returning from the original
destination point to the point of origin.
The 1980 Motor Carrier Act deregulated interstate commercial trucking and thereby
allowed carriers to contract for the return trip. The backhaul can be with a full, partial, or
empty load. An empty backhaul is called deadheading.
Backlog - answer(Good) All customer orders that have been received but not yet
shipped. (open orders or open board)
Backorder - answer(Bad) An unfulfilled customer order or commitment. A backorder is
an immediate (or past due) demand against an item whose inventory is insufficient to
satisfy the demand.
Balance Sheet - answerA financial statement showing the resources owned, the debts
owed, and the owner's share of a company at a given point in time.
Bar Code - answerA series of alternating bars that can be printed or stamped
representing encoded information that can be read electronic readers. This is used to
facilitate timely and accurate input of data to a computer system.
Batch - answer1. A quantity scheduled to be produced or in production.
2. For discrete products, the batch is planned to be the standard quantity, these batches
can be broken into lots.
3. In non-discrete products, the batch is the quantity that is planned to be produced.
Batch Picking - answerA method of picking orders where order requirements are
aggregated by product across orders to reduce movement to and from product
locations. The aggregated quantities of each product are then transported to a common
area where the individual orders are constructed. (Having 3 orders of 20 shirts and 2
order of 20 pens --> getting 60 shirts at and 40 pens all at once, coming back and
creating the individual orders)
, Bill of lading (uniform) - answerA carrier's contract and receipt for goods the carrier
agrees to transport from one place to another and to deliver to a designated person. In
case of loss, damage, or delay, the bill of lading is the basis for filing freight claims.
Bill of material (BOM) - answerA listing of all subassemblies, intermediate parts, and
raw materials that go into a parent assembly, showing the quantity of each required to
make an assembly. Used with MPS to decide what items purchase requisitions and
production orders must be released.
Bonded warehouse - answerBuildings or parts of buildings that are designated by the
US Secretary and Treasury for storing imported merchandise, operated under US
Customs supervision.
Bottleneck - answerA facility, function, department, or resource whose capacity is less
that the demand place upon it.
Break-Bulk - answerDividing truckloads of homogenous items into smaller, more
appropriate quantities for use.
Break-Even point - answerThe level of production or the volume of sales where
operations is neither profitable or unprofitable. This point is the intersection of the total
revenue and the total cost curves.
Buffer - answerA quantity of materials awaiting further processing. In the theory of
constraints, buffers can be time or material and support throughput and/or due date
performance.
ATP - answerThe uncommitted portion of a companies inventory. (Uncommitted
inventory balance in the first period and is normally calculated for each period in which
an MPS receipt is scheduled.
Buffer mgmt. - answerProcess where all expediting in shop is driven by what is
scheduled to be in the buffers. By doing so, the shop is better able to avoid idle time
and missed customer due dates as well as identify areas for improvement.
Bullwhip effect - answerAn extreme change in the supply position upstream in a supply
chain generated by a small change in demand downstream. This can be eliminated by
synchronizing the supply chain.
Business Plan - answerA statement of long-range strategy and revenue, cost, and profit
objectives usually accompanied by budgets, a projected balance sheet, and a cash flow
statement. Usually stated in terms of dollars and grouped by product family.
Capable to promise (CTP) - answerCapable to Promise (CTP) extends Available to
Promise by taking into account capacity information. Whereas ATP only considers
material availability and assumes infinite capacity resources, CTP considers availability
