CPIM Basic Vocabulary questions and answers with
solutions
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) - ANSWER Methods 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) - ANSWER This is a notification of pending
delivers similar to a packing list. Often sent electronically.
And0n - ANSWER A sign board with signal lights used to make workers
and management aware of a quality, quantity, or process problem.
,Anticipation Inventories - ANSWER Additional 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 - ANSWER A 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 - ANSWER An assembly process where equipment and
work centers are laid in a sequence in which the raw materials and parts
are assembled.
Assignable Cause - ANSWER A 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 - ANSWER 1/2 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 - ANSWER A 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 - ANSWER A 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 - ANSWER The 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 - ANSWER A 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 - ANSWER A 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 - ANSWER 1. 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 - ANSWER A 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) - ANSWER A 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.
solutions
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) - ANSWER Methods 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) - ANSWER This is a notification of pending
delivers similar to a packing list. Often sent electronically.
And0n - ANSWER A sign board with signal lights used to make workers
and management aware of a quality, quantity, or process problem.
,Anticipation Inventories - ANSWER Additional 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 - ANSWER A 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 - ANSWER An assembly process where equipment and
work centers are laid in a sequence in which the raw materials and parts
are assembled.
Assignable Cause - ANSWER A 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 - ANSWER 1/2 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 - ANSWER A 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 - ANSWER A 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 - ANSWER The 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 - ANSWER A 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 - ANSWER A 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 - ANSWER 1. 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 - ANSWER A 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) - ANSWER A 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.
