Glossary

Being responsible for work performance even if not personally performing the work.

Short-term liabilities (money) a company owes to its suppliers or creditors for services or products received but not yet paid for. Money it owes others.

The money a company is due to receive from others based on the services or products provided on credit. Money it is due from others.

Certification of meeting standards specified by a recognized body such as a governmental entity or trade organization. See ISO below as an example.

The organization responsible for producing the standard communication protocols used for electronic data interchange (EDI).

Area (physical location) to gather assembly components prior to them being assembled together.

Accuracy, in quality management, relates to how close what is being measured is to the standard; the closer, the more accurate.

Communication, often electronic, from a vendor that an order was received. The acknowledgement implies acceptance of the order unless specified otherwise.

The book value, or acquisition cost = (Expenses related to the acquisition + cost of acquisition) - (taxes + depreciation + amortization + impairment costs).

A message created from a system (such as an MRP or DRP) that identifies a needed action. An example is a release order. Also called an Alert.

Goods that are physically available and ready to be used.

Work performed. There can be multiple activities - often linked - done manually and mechanically. Accounting may track the activities separately.

Identifying and reviewing activities (see above) to better understand the work involved and cost of each activity.

A resource describing the details of each activity in an organization. Provides a standard within an organization for the expectations of each activity.

The standard, the measure used for expected performance and to assign costs to activities.

Describes the activities in each functional area. Examples include batches for production and market channels for customers.

Financial formulas that help a business determine its operating efficiency and cash generation. Examples are inventory and accounts receivable turnover ratios.

Using cost driver data, based on the projected workload and the associated resources to perform the work, to determine the budget.

A costing method that assigns overhead and indirect costs to products and services. Often used to get more accurate costs for manufacturing processes.

Using the Activity-Based Costing (ABC) data to predict - or model - expenses for specific activities under various scenarios.

The use of multiple Activity-Based Costing (ABC) models to gather data on an organization's costs.

Using Activity-Based Costing (ABC) and value chain analyses to evaluate business activity with the objective of making improvements.

The process of determining the resource requirements for specific products or services. Part of the Activity-Based Costing (ABC) process.

The systematic use of actual historical costs, rather than budgeted costs or projections, to determine costs.

Determining product (or service) costs based on the actual cost of materials, labor, and allocated overhead.