APICS - CLTD Certification (Module 6)
Inventory Management - answer The branch of business management concerned with
planning and controlling inventories.
Inventory Planning - answer The activities and techniques of determining the desired
level of items, whether raw materials, work in process, or finished products.
Inventory Control - answer The activities and techniques of maintaining the desired
levels of items, whether raw materials, work in process, or finished products.
Inventory - answer Those stocks or items used to support production (raw mats and
work-in-process items), supporting activities (maintenance, repair, and operating
supplies), and customer service (finished goods and spare parts).
Work in Process (WIP) - answer A good or goods in various stages of completion
throughout the plant, including all material from raw mats that has been released for
initial processing up to completely processed material awaiting final inspection and
acceptance as finished goods inventory.
Maintenance, Repair, and Operating (MRO) Supplies - answerItems used in support of
general operations and maintenance such as maintenance supplies, spare parts, and
consumables used in the manufacturing process and supporting operations.
Decoupling - answerCreating independence between supply and use of material.
Economy of Scale - answerA phenomenon whereby larger volumes of production
reduce unit cost by distributing fixed costs over a larger quantity.
Level of Service - answerA measure (usually expressed as a percentage) of satisfying
demand through inventory or by the current production schedule in time to satisfy the
customers' requested delivery dates and quantities.
Stockout - answerA lack of materials, components, or finished goods that are needed.
On-Time Schedule Performance - answerA measure (percentage) of meeting the
customer's originally negotiated delivery request date.
Stockout Percentage - answerA measure of the effectiveness with which a company
responds to actual demand or requirements.
Inventory Shrinkage - answerReductions of actual quantities of items in stock, in
process, or in transit, caused by scrap, theft, deterioration, evaporation, and so forth.
, Return on Assets (ROA) = - answerNet Profit for Previous Year / Total Assets
Lot Size - answerThe amount of a particular item that is ordered from the plant or a
supplier or issued as a standard quantity to the production process.
Cycle Stock - answerA component of item inventory that gradually depletes as customer
orders are received and is replenished cyclically when supplier orders are received.
Average Inventory - answerOne-half the average lot size plus the safety stock, when
demand and lot sizes are expected to be relatively uniform over time.
Pipeline Inventory - answerInventory in the transportation network and the distribution
system, including the flow through intermediate stocking points.
Anticipation Inventories - answerAdditional inventory above basic pipeline stock to cover
projected trends of increasing sales, planned sales promotion programs, seasonal
fluctuations, plan shutdowns, and vacations.
What are the issues that challenge aligning supply and demand? - answer-
Geographical specialization
- Decoupling supply and demand
- Seasonal fluctuations in supply and demand
Safety Stocks - answerA quantity of stock planned to be in inventory to protect against
fluctuations in demand or supply.
Hedge Inventory - answerA form of inventory buildup to buffer against some event that
may not happen.
Inventory Costs - answerThe costs associated with ordering and holding inventory.
Unit Cost - answerTotal labor, material, and overhead cost for one unit of production.
Ordering Cost - answerThe costs that increase as the number of orders placed
increases.
Setup Costs - answerCosts such as scrap costs, calibration costs, downtime costs, and
lost sales associated with preparing the resource for the next product.
Handling Cost - answerThe cost involved in the movement of material.
Carrying Cost - answerThe cost of holding inventory, usually defined as a percentage of
the dollar value of inventory per unit of time (generally one year).
ROI = - answer((Gain - Cost) / Cost) * 100
Inventory Management - answer The branch of business management concerned with
planning and controlling inventories.
Inventory Planning - answer The activities and techniques of determining the desired
level of items, whether raw materials, work in process, or finished products.
Inventory Control - answer The activities and techniques of maintaining the desired
levels of items, whether raw materials, work in process, or finished products.
Inventory - answer Those stocks or items used to support production (raw mats and
work-in-process items), supporting activities (maintenance, repair, and operating
supplies), and customer service (finished goods and spare parts).
Work in Process (WIP) - answer A good or goods in various stages of completion
throughout the plant, including all material from raw mats that has been released for
initial processing up to completely processed material awaiting final inspection and
acceptance as finished goods inventory.
Maintenance, Repair, and Operating (MRO) Supplies - answerItems used in support of
general operations and maintenance such as maintenance supplies, spare parts, and
consumables used in the manufacturing process and supporting operations.
Decoupling - answerCreating independence between supply and use of material.
Economy of Scale - answerA phenomenon whereby larger volumes of production
reduce unit cost by distributing fixed costs over a larger quantity.
Level of Service - answerA measure (usually expressed as a percentage) of satisfying
demand through inventory or by the current production schedule in time to satisfy the
customers' requested delivery dates and quantities.
Stockout - answerA lack of materials, components, or finished goods that are needed.
On-Time Schedule Performance - answerA measure (percentage) of meeting the
customer's originally negotiated delivery request date.
Stockout Percentage - answerA measure of the effectiveness with which a company
responds to actual demand or requirements.
Inventory Shrinkage - answerReductions of actual quantities of items in stock, in
process, or in transit, caused by scrap, theft, deterioration, evaporation, and so forth.
, Return on Assets (ROA) = - answerNet Profit for Previous Year / Total Assets
Lot Size - answerThe amount of a particular item that is ordered from the plant or a
supplier or issued as a standard quantity to the production process.
Cycle Stock - answerA component of item inventory that gradually depletes as customer
orders are received and is replenished cyclically when supplier orders are received.
Average Inventory - answerOne-half the average lot size plus the safety stock, when
demand and lot sizes are expected to be relatively uniform over time.
Pipeline Inventory - answerInventory in the transportation network and the distribution
system, including the flow through intermediate stocking points.
Anticipation Inventories - answerAdditional inventory above basic pipeline stock to cover
projected trends of increasing sales, planned sales promotion programs, seasonal
fluctuations, plan shutdowns, and vacations.
What are the issues that challenge aligning supply and demand? - answer-
Geographical specialization
- Decoupling supply and demand
- Seasonal fluctuations in supply and demand
Safety Stocks - answerA quantity of stock planned to be in inventory to protect against
fluctuations in demand or supply.
Hedge Inventory - answerA form of inventory buildup to buffer against some event that
may not happen.
Inventory Costs - answerThe costs associated with ordering and holding inventory.
Unit Cost - answerTotal labor, material, and overhead cost for one unit of production.
Ordering Cost - answerThe costs that increase as the number of orders placed
increases.
Setup Costs - answerCosts such as scrap costs, calibration costs, downtime costs, and
lost sales associated with preparing the resource for the next product.
Handling Cost - answerThe cost involved in the movement of material.
Carrying Cost - answerThe cost of holding inventory, usually defined as a percentage of
the dollar value of inventory per unit of time (generally one year).
ROI = - answer((Gain - Cost) / Cost) * 100
