Glossary

A summary of information about the product including its functions and characteristics.

A group of products with similar characteristics. Also, a group of related goods that are manufactured by a single company.

A series of letters or numbers, such as an SKU, that is used to identify a product without using its full description.

The maximum possible output of a manufacturing process, measured in units of output per period.

A series of machines, usually with workers but sometimes without, that builds a product by passing work from one station to the next until the product is finished.

The process - using the aid of systems - of determing what to produce, how much of it to produce, and when to make it considering sales and operational variables.

Includes items or goods which are classified as material purchases and included in Cost of Goods Sold (COGS) as raw material purchases.

In manufacturing, the rate of output per unit of labor, capital or equipment (input).

Revenue less operating expenses (excluding interest and taxes) equals PBIT.

A comparison of the earnings reported by a business to its sales. Net profit ÷ Net sales = Profit ratio

Reviewing financial results from different perspectives - such as costs and market segments and product families - to find ways to improve finanical performance.

In logistics, accounting for the costs and availability of all resources, such as trucks, storage, and labor, to optimize profitability when creating delivery schedules.

A marketing strategy, often involving discounts or incentives, where the seller tries to influence and convince the buyers to purchase their products or services.

Documentation, physical or electronic, signed by the receiver of the shipment that proves the goods were received.

A rate that is lower than the regular rate for shipments that have prior or subsequent moves and used to overcome combination rates’ competitive disadvantages.

In EDI, software formats used for sending and receiving data. Standardizes communication transmissions.

A storage facility that provides space to a variety of businesses, usually on a month-to-month basis but sometimes under longer term contracts.

A document issued by a public warehouse manager to a company to confirm the receipt of the goods a company places in the warehouse.

A storage service that uses a public warehouse to offer space for a fee to other businesses. See Public Warehouse.

When a warehouse controls its receipts by placing inventory orders with the central distribution center. Also, where customer demand triggers - or pulls - an order.

Something that indicates more production is needed, such as when part of the manufacturing process is completed or falls below a certain level.

A strategy based upon producing and shipping goods based on specific customer demand and signals from actual, instead of projected, market demand.

A document created by a buyer to request a product from a seller. It contains the product name, quantity, price, due date, sales and shipping terms, etc.

A pricing method used by some companies in which the seller offers a lower per unit price as an incentive if the buyer purchases a larger quantity of items.

Business functions related to evaluating and buying the goods and services the firm requires. See also Procurement.