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constant is automatically adjusted as a function of forecast error measurement ATP formula (2nd, etc) - MPS - Sum of CO before next MPS ATP formula (first period) - On-hand invty + MPS - Sum of CO before next MPS Available to promise - scheduled production that is unconsumed or uncommitted after known customer orders are covered Ave. Invty formula - (Beginning on-hand + Ending on-hand) / 2 Backlog - a demand item, sometimes referred to as Open Orderrs. All customer orders received but not yet shipped. has a future delivery date. Backorder - past due/unfilled customer order or commitment. must be replanned. Benchmarking - process of comparing many aspects of operational performance with performance of other organizations Bias - consistent deviation from the mean in one direction; tendency of the forecast to be either above or below the actual observations Bias formula - Sum of (A-F) divided by n Bill of Material (BOM) - an engineering document that identifies the ingredients or subordinate components required to physically make each part, formula, or assembly. Bill of Resources - listing of required amount of constraining resources needed to manufacture one unit of a selected item or family BOM effectivity phase-in date - new revision number of the BOM becomes active. plans the phasing of a BOM BOM effectivity phase-out date - the current revision number of the BOM becomes inactive. Bottom Up Replanning - ability of the planner to evaluate the effects of possible alternative solutions caused by lower level shortages. Business plan - a statement of long-range strategy and revenue, cost and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow (source and application of funds) statement. It is usually stated in terms of dollars and grouped by product family. It is then translated into synchronized tactical functional plans through the production planning process (or the sales and operations planning process). Although frequently stated in different terms (dollars versus units), these tactical plans should agree with each other and with the business plan
that is.Capable to promise .a method of forecasting where time series data are separated into up to three components: trend. weekly.a trade off between level and chase. Daily Usage formula .Total Usage or reqmts divided by n Days of Supply formula . The new forecast is made by projecting the patterns individually determined and then combining them Demand . It involves prioritizing demand when supply is lacking. It is usually set to be tripped when the demand for a period differs from the forecast by more than some number of mean absolute deviations Demand Management . Common Parts BOM (or KIT) . A fourth component is random. seasonal and cyclical. data with no pattern. only customer orders are considered.that point in time inside of which the forecast is no longer included in total demand and projected available invty calculations.A need for a particular product or component Demand filter . monthly or quarterly.Bottlenecks in the process that must be carefully planned to enable MPS to be achieved Cumulative ATP . produces at or close to full capacity for some part of the cycle and at a lower rate during the rest of the cycle. Critical resources . Proper demand management facilitates the planning and use of resources for profitable business results Demand Time Fence .publishes policies and procedures statement circulated to all S&OP participants chase method . nonseasonal pattern. Distribution .groups common components for a product or family into one BOM or one section of the BOM.physical transfer of goods and services .process of committing customer orders against inventory and the capacity available to determine the delivery date of the new order. and cyclical includes any repeating. where seasonal includes a recurring demand pattern such as day of the week.Safety Stock divided by Total Daily Usage Decomposition .a production planning method that maintains a stable inventory level while varying production to meet demand Combination/Hybrid Method .Function of recognizing all demands for goods and services to support the market place. using finite scheduling CEO or GM .the backlog of planned shipments for the product. Customer Orders . where trend includes the general horizontal upward or downward movement over time.ATP method where it is assumed that inventory can be carried forward.Total Supply .a standard that is set to monitor sales data for individual items in forecasting models.
constrained by material and capacity. Ending Backlog formula . schedule for finishing operations. Firm Planned Order .supply order that has been reviewed by the master scheduler. Exponential smoothing .a type of weighted moving average forecasting technique in which past observations are geometrically discounted according to their age. money.use of a set of equations intended to be used simultaneously to capture the way in which dependent and independent variables are interrelated Economic Order Qty (EOQ) .Demand Engineering Change .Distribution Efficiency . etc. ATO or ETO environments. workforce. .actual build schedule. trucks. The technique makes use of a smoothing constant to apply the difference between the most recent forecast and the critical sales data. The approach can be used for data that exhibit no trend or seasonal patterns.Supply Ending On-Hand Inventory formula .Beginning On-hand + Production . Higher order exponential smoothing models can be used for data with either (or both) trend and seasonality Extrinsic . The heaviest weight is assigned to the most recent data. Econometric modeling . freight cars. The smoothing is termed exponential because data points are weighted in accordance with an exponential function of their age.formula for deriving the optimum qty that minimizes the annual sum of ordering and inventory carrying costs.Beginning Backglog + Demand . schedule of end items required to complete products for specific customers in MTO. distribution resource planning (DRP II) . goal is to minimize the total distribution costs. planned order that has been frozen in qty and time.tracks the use of distribution resources such as transportation and warehousing resources. system cannot change this.Forecasting data source based on external patterns from information outside the company Final Assembly Schedule (FAS) .the extension of distribution requirements planning into the planning of the key resources contained in a distribution system: warehouse space.revision to a drawing or design released by Engineering to modify or correct a part.
the difference between actual demand and forecast demand.computer-based simulation technique that compares the forecasts generated using any one of a number of simple strategies Forecast . some changes are tolerated but must be carefully controlled.the planned manner in which the forecast will formally be reviewed and potentially revised Forecast horizon .determining forecasts at final distribution centers by forecasting the total nationwide or worldwide sales for the product in terms of the number of units .Actual demand .the process of making. stated as an absolute value or as a percentage Forecast error formula . correcting and using forecasts.Summing up of all the final distribution points served by an area constitutes the forecast for the area stocking point Forecasting by allocation . Focus forecasting .or Slushy Zone.an estimate of future demand Forecast error .Forecast Forecast frequency .length of time into the future over which a forecast will be prepared Forecast management . It also includes determination of the forecast horizon Forecasting by aggregation . tradeoff changes only includes mix of firm planned orders and released orders.Flexible Zone . checking.
Intrinsic .ATP method where a large order in the future period may be satisfied by borrowing from current available production. Finished goods inventories buffer the production system against seasonal demand Load % formula . emergency changes only.use of visual information to predict demand patterns Hedge .Free Zone . a production schedule or master production schedule that generates material and labor requirements that are as evenly spread over time as possible.scheduled qty to protect against uncertainty in demand/supply. .Forecasting data source based on historical patterns of the data itself from the company data Inventory .a supply item Inventory Turnover formula . it has the dimension of timing and amount.time zone that is closest to the present time. includes released orders for customer orders Graphical methods .Annual cost of sales divided by Ave. constrained by production plan includes planned orders based on forecasts Frozen Zone .(Total Load / Capacity available) * 100 Look-ahead ATP (Backward ATP) .In traditional management. invty level level schedule .large amount of change is permissible as long as it doesnt exceed the production plan limits.
and management policies and goals. It must take into account the forecast.fall into 3 categories: product safety issues. MAD * 1. availability of capacity. It is not a sales forecast that represents a statement of demand.Lot-for-Lot (L4L) . Master Production Schedule (MPS) . and in turn.Sum of l A .Standard Deviation Mandatory or Immediate Engineering Change .Translates actual orders into an anticipated build schedule for end items to meet the stated product family volume per the production plan Mean . availabilty of material.equal to the demand qty. expensive and common to make to order products. Master Scheduling .the observation in a set that divides the set so that the same number of observation lies on each side of it . The master scheduler maintains this schedule. consistent with goal of one piece flow in lean/JIT.F)/A *100% divided by n Median . subject to frequent model changes or have a short shelf life. It represents what the company plans to produce expressed in specific configurations.25 . it becomes a set of planning numbers that drives material requirements planning.The production qty is "as required" -.F l divided by n Mean Absolute Percentage of Error (MAPE) formula . The anticipated build schedule for those items assigned to the master scheduler. product enhancement issues.Sum of (A . and product corrections. the production plan. and other important considerations such as backlog.a line on the master schedule grid.point in the distribution of measurements where the summed deviations are equal to 0 Mean Absolute Deviation (MAD) formula . quantities and dates.
artificially arranged according to product modules/options.a customer-selectable choice from an offered product feature.the observation that occurs with greatest frequency Modular BOM (assemble-to-order) . Mode .Actual forecast * (alpha) + Old forecast * (1-alpha) Non-cumulative ATP .ATP method where no inventory or planned production can be carried forward. .average of a certain number of most recent observations Multilevel BOM .standard units that can be prepared in advance of receiving a customer order. Modules . Offsetting .structure the BOM in a way that corresponds to the sequential build process or to how many lower-level items go into each higher-level item. Option . important for planning accuracy. New Forecast formula . no possibility of overbooking the product. requirements are received from both independent and dependent demand sources.making several different parts or products in varying lot sizes so that a factory produces close to the same mix of products that will be sold that day. Multilevel Master Scheduling . Moving average .taking lead time into consideration.Mixed-Model Production .allows any level in an end item's bill of material to be master scheduled.
etc. measuring.a data point that differs significantly from other data for a similar phenomenon. service. item. the replacement of internal capacity and prodn by that of the supplier. this sales point might be considered as an outlier Outsourcing . manufacturing orders and purchase orders Order processing . and promising orders from customers. involves substitution. PAB formula (after DTF) .Prev PAB + MPS . monitoring and controlling of the processes related to customer orders. and comparing measure to a standard for a specific criterion for an operation.Order management . For example.primary contact between customer and supplier Order promising . Phantom BOM . entering. distribution centers. Order service is also typically responsible for responding to customer inquiries and interacting with the master scheduler on availability of products Outlier .CO or Forecast (whichever is higher) PAB formula (before DTF) . .the planning.capability to identify.the activity of committing delivery dates to the customer based on the availability of product or capacity within the supply operation Order service . if the average sales for some products were 10 units per month. directing.the function that encompasses receiving. business. for a given item.consists of child components grouped for convenience.Prev PAB + MPS . Performance Measurement System . good. the sources of its gross requirements and/or allocations.process of having suppliers provide goods/services that were previously provided internally. and one month had sales of 500 units. and interplant operations.system for collecting.Customer Order Pegging .
Planning BOM . and cost. Planned Order . Product Families . customer deliveries.supply order generated automatically by the planning system whenever the system detects that the projected available balance is negative.used primarily for transient (nonstocked) subassemblies. Phased In or Optional Engineering Change .A point in time denoted in the planning horizon of the master scheduling process that marks a boundary inside of which changes to the schedule may adversely affect component schedules. generally through the use of bar coding or magnetic media and equipment Policy . used to facilitate master scheduling and material planning. lowest level of supply order. Planning horizon .amount of time a plan extends into the future Planning Time Fence .a "how to" document designed to make clear how the policy is to be enacted.artificial grouping of items in BOM format. logical groupings based on similar sales and manufacturing reqmts. ideally should be no more than 6-12 per business unit .a statement of management intent Procedure . point of sale .represent how the product/service is presented to the market. capacity plans.product enhancements that can be planned using effectivity dates for future implementation.the relief of inventory and computation of sales data at the time and place of sale.
approach where several interrelated optional items are overplanned.either a purchase or a production order.forecasting technique based on intuitive or judgmental evaluation or informed opinion regarding future product demands Quantitative .a statistical trend analysis tool which determines best mathematical expression to be used to describe actual data.forecasting technique based on computational projection of a numeric relationship. That mathematical expression can then be used to project to the future Released Order (Scheduled Receipt) .process of converting the MPS into requirements for key resources. often unique. items or structures that require a custom design capability (ETO).Product Mix Hedge .an endeavor with a specific objective to be met within predetermined time and dollar limitations and that has been assigned for definition or execution Project manufacturing . Regression analysis .a type of manufacturing process used for larger. . quantity. based on the premise that the past demand is a good indicator of future demand Quantity to Send formula . price and location at a minimal cost RCCP .On-hand qty Quick Response .Requirements .ability to respond rapidly to the customer with the proper product. Project .inventory balance projected into the future Qualitative . This type of process is highly flexible and can cope with a broad range of product designs and design changes Projected Available Balance .
Resource .Demand during lead time + Safety Stock Required Load hrs (RCCP) formula . Rough-Cut Capacity Planning .provides reserve capacity at key workcenter .process of moving due dates of MPS orders to that supply and demand are kept in balance. prodn.reflect a typical unit of the product family and the consumption rate for a resource.Process of establishing.Standard Hrs divided by Efficiency Requirements formula .Daily Usage rate * Days of Supply Rescheduling . or delivery Resource Planning . Reorder Point formula . checks the feasibility of the production plan on a monthly basis.represents a firm commitment. measuring and adjusting limits or levels of long-range capacity.remaining materials tha can be used for another run.The process on which a preliminary master production schedule is developed then tested against the constraint of critical resources Safety capacity .anything that adds values to a product/service in its creation. Resource Profile . Remnant . for an average unit of the product family.
material outside of specifications and possessing characteristics that make rework impractical. sourcing. It is performed at least once a month and is reviewed by management at an aggregate (product family) level. the S&OP process links the strategic plan fo the business with its execution and rviews performance measures for continuous improvement. demand.SS per DC * total number of DCs Safety Stock (Buffer) . The process brings together all the plans for the business (sales. .maintains a unique end item for each possible configuration. Scrap .A process that provides management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain. and financial) into one integrated set of plans. It is the definitive statement of the company's plans for the near to intermediate term covering a horizon sufficient to plan for resources and to support the annual business planning process.SS/DC divided by square root of total # of DCs Sales and operations planning . marketing.ensures against delivery delays. development. and new-product plans at both the detail and aggregate level and tie to the business plan.Safety lead time . Safety Stock per DC formula . Executed properly. Seasonal Index formula .quantity of stock planned to be in inventory to protect against fluctuations in demand/supply. The process must reconcile all supply.period average divided by average for all periods Selective Stocking . Safety Stock (all DCs) formula .maximizing available warehouse space in the channel by determining which items are to be stocked at what echelon level based on item ABC classification Single Level BOM . the simplest format of the BOM. manufacturing.
25 .square root of: Sum of (A-F)2 divided by (n-1) Std Deviation / 1.artificial time boundary established by S&OP participants.Detects forecast bias Tracking Signal formula .series of complex relationships a company develops with the external world. a marketing tool.the global network used to deliver products and services from raw materials to end customers through an engineered flow of information.Standard Deviation formula .ties together various modular bills to define the product structure or a product family. meeting or exceeding customer's expectations. physical distribution and cash Time Fence . used to separate periods/groups for planning purposes Total Customer Service . Total Quality Management (TQM) .sending production work outside to another manufacturer Super BOM or Super Bill . Tracking signal .management approach to long term business success through customer satisfaction.MAD Subcontracting .Sum of (A-F) divided by MAD . Supply chain .
a means of optimizing supply chain performance in which the supplier has access to customer's inventory data and is responsible for maintaining the inventory level required by the customer. demand is higher than forecast Workcenter .vendor-managed inventory .permits authorized overplanning. The vendor contains a receipt for the restocked inventory and accordingly invoices the customer Volume Hedge or Market Hedge . sets increments for the total number of products by a certain amount or proportion. . The on-site inventory is counted.machine (person) or group of machines (people) that are capable of performing interchangeable work. damaged or outdated goods are removed. and the inventory is restocked to predefined levels. This activity is accomplished by a process in which resupply is done by the vendor through regularly scheduled reviews of the on-site inventory.
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