A/P
see Accounts Payable

A/R
see Accredited Standards Committee

Abandonment
The decision of a carrier to give up or to discontinue service over a route. Railroads must seek ICC permission to abandon routes.

ABB
see Activity Based Budgeting

ABC
see Activity Based Costing

ABC Classification
Classification of a group of items in decreasing order of annual dollar volume or other criteria. This array is then split into three classes called A, B, and C. The A group represents 10 to 20% by number of items, and 50 to 70% by projected dollar volume. The next grouping, B, represents about 20% of the items and about 20% of the dollar volume. The Cclass contains 60 to 70% of the items, and represents about 10 to 30% of the dollar volume.

ABC Costing
See Activity Based Costing

ABC Inventory Control
An inventory control approach based on the ABC volume or sales revenue classification of products (A items are highest volume or revenue, C–or perhaps D–are lowest-volume SKUs).

ABC Model
In cost management, a representation of resource costs during a time period that are consumed through activities and traced to products, services, and customers or to any other object that creates a demand for the activity to be performed.

ABC System
In cost management, a system that maintains financial and operating data on an organization’s resources, activities, drivers, objects and measures. ABC models are created and maintained within this system.

ABM
see Activity Based Management

Abnormal Demand
Demand in any period that is outside the limits established by management policy. This demand may come from a new customer or from existing customers whose own demand is increasing or decreasing. Care must be taken in evaluating the nature of the demand, is it a volume change, is it a change in product mix, or is it related to the timing of the order? Also see: Outlier.

ABP
see Activity Based Planning

Absorption
The assumption that the carrier will cover extraordinary or other special charges without increasing the price to the shipper.

Absorption Costing
In cost management, an approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production. The fixed costs are usually allocated to units of output on the basis of direct labor hours, machine hours, or material costs. Synonym: Allocation Costing.

Acceptable Quality Level
In quality management, when a continuing series of lots is considered, AQL represents a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average. Also see: Acceptance Sampling.

Acceptable Sampling Plan
In quality management, a specific plan that indicates the sampling sizes and the associated acceptance or non-acceptance criteria to be used. Also see: Acceptance Sampling.

Acceptance Number
In quality management, (1) A number used in acceptance sampling as a cutoff at which the lot will be accepted or rejected. For example, if x or more units are bad within the sample, the lot will be rejected. (2) The value of the test statistic that divides all possible values into acceptance and rejection regions. Also see: Acceptance Sampling.

Acceptance Sampling
(1) The process of sampling a portion of goods for inspection rather than examining the entire lot. The entire lot may be accepted or rejected based on the sample even though the specific units in the lot are better or worse than the sample. There are two types: attributes sampling and variables sampling. In attributes sampling, the presence or absence of a characteristic is noted in each of the units inspected. In variables sampling, the numerical magnitude of a characteristic is measured and recorded for each inspected unit, this type of sampling involves reference to a continuous scale of some kind.(2) A method of measuring random samples of lots or batches of products against predetermined standards.

Access Space
An aisle used to gain access to facings, slots or stacks. Accountable Stock-Materials designated for inventory and some control of issue and/or access. Level of accountability is determined by the responsible agent.

Accessibility
The ability of a carrier to provide service between an origin and a destination.

Accessorial
(1) Accessorial Charges - Charges made for additional, special or supplemental services, normally over and above the line haul services. (2) Accessorial Service - Service rendered by a carrier in addition to transportation services. (e.g. sorting, packing, precooling, heating and storage.)

Accessorial charges
A carrier’s charge for accessorial services such as loading, unloading, pickup, and delivery. See also: Upcharges.

Accessory
A choice or feature added to the good or service offered to the customer for customizing the end product. An accessory enhances the capabilities of the product but is not necessary for the basic function of the product. In many companies, an accessory means that the choice does not have to be specified before shipment but can be added at a later date. In other companies, this choice must be made before shipment.

Accountability
Being answerable for, but not necessarily personally charged with, doing specific work. Accountability cannot be delegated, but it can be shared. For example, managers and executives are accountable for business performance even though they may not actually perform the work.

Accounts Payable
The value of goods and services acquired for which payment has not yet been made.

Accounts receivable (A/R)
The value of goods shipped or services rendered to a customer on whom payment has not yet been received. Usually includes an allowance for bad debts.

Accreditation
Certification by a recognized body of the facilities, capability, objectivity, competence, and integrity of an agency, service, operational group, or individual to provide the specific service or operation needed. For example, the Registrar Accreditation Board accredits those organizations that register companies to the ISO 9000 Series Standards.

Accredited Standards Committee
A committee of the ANSI chartered in 1979 to develop uniform standards for the electronic interchange of business documents. The committee develops and maintains U.S. generic standards for Electronic Data Interchange.

Accumulation bin
A place, usually a physical location, used to accumulate all components that go into an assembly before the assembly is sent out to the assembly floor. Synonym: assembly bin.

Accuracy
In quality management, the degree of freedom from error or the degree of conformity to a standard. Accuracy is different from precision. For example, four-significant-digit numbers are less precise than six-significant-digit numbers, however, a properly computed four-significant-digit number might be more accurate than an improperly computed sixsignificant- digit number.

ACD
see Automated Call Distribution

ACE
see Automated Commercial Environment

ACH
see Automated Clearinghouse

Acknowledgment
A communication by a supplier to advise a purchaser that a purchase order has been received. It usually implies acceptance of the order by the supplier.

Acquisition Cost
In cost accounting, the cost required to obtain one or more units of an item. It is order quantity times unit cost.

ACSI
see American Customer Satisfaction Index

Act of God
An extraordinary force of nature (such as a severe flood or earthquake) that experience, prescience or care cannot reasonably foresee or prevent.

Action Message
An output of a system that identifies the need for and the type of action to be taken to correct a current or potential problem. Examples of action messages in an MRP system include release order, reschedule in, reschedule out, and cancel. Synonym: exception message, action report.

Action plan
A specific method or process to achieve the results called for by one or more objectives. An action plan may be a simpler version of a project plan.

Action Report
See Action Message

Activation
In constraint management, the use of non-constraint resources to make parts or products above the level needed to support the system constraint(s). The result is excessive work-in-process inventories or finished goods inventories, or both. In contrast, the term utilization is used to describe the situation in which non-constraint resource(s) usage is synchronized to support the needs of the constraint.

Active Block
A uniform block after one or more elements have been removed, i.e.,a block that is being worked.

Active Inventory
The raw materials, work in process, and finished goods that will be used or sold within a given period.

Active Stock
Goods in active pick locations and ready for order filling.

Activity
Work performed by people, equipment, technologies or facilities. Activities are usually described by the ‘action-verbadjective- noun’ grammar convention. Activities may occur in a linked sequence and activity-to-activity assignments may exist.(1) In activity-based cost accounting, a task or activity, performed by or at a resource, required in producing the organization’s output of goods and services. A resource may be a person, machine, or facility. Activities are grouped into pools by type of activity and allocated to products.(2) In project management, an element of work on a project. It usually has an anticipated duration, anticipated cost, and expected resource requirements. Sometimes ‘major activity’ is used for larger bodies of work.

Activity Analysis
The process of identifying and cataloging activities for detailed understanding and documentation of their characteristics. An activity analysis is accomplished by means of interviews, group sessions, questionnaires, observations, and reviews of physical records of work.

Activity Based Budgeting
An approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types, number of and cost of resources that activities are expected to consume based on forecasted workloads. The budget is part of an organization’s activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals.

Activity Based Costing
A methodology that measures the cost and performance of cost objects, activities and resources. Cost objects consume activities and activities consume resources. Resource costs are assigned to activities based on their use of those resources, and activity costs are reassigned to cost objects (outputs) based on the cost objects proportional use of those activities. Activity-based costing incorporates causal relationships between cost objects and activities and between activities and resources. ABC links activities to a particular product so that the cost impact of that product is more readily visible. ABC combines financial data with nonfinancial data (activity costs) to report the actual per-unit cost of outputs. ABC is a refined form of absorption accounting that replaces misleading overhead cost allocations with cause-and-effect driver relationships that do a better job of segmenting and tracing the diversity and variation of the outputs of the processes. For example, an ABC approach might measure the cost incurred by the accounts receivable department in handling calls for billing errors, whereas the traditional accounting approach ignores the activity and measures the cost of the accounts receivable department as a percentage of revenue.

Activity Based Costing Model
In activity-based cost accounting, a model, by time period, of resource costs created because of activities related to products or services or other items causing the activity to be carried out.

Activity Based Costing System
A set of activity-based cost accounting models that collectively define data on an organization’s resources, activities, drivers, objects, and measurements.

Activity Based Management
A discipline focusing on the management of activities within business processes as the route to continuously improve both the value received by customers and the profit earned in providing that value. ABM uses activity-based cost information and performance measurements to influence management action. See Activity-Based Costing

Activity Based Planning
Activity-based planning (ABP) is an ongoing process to determine activity and resource requirements (both financial and operational) based on the ongoing demand of products or services by specific customer needs. Resource requirements are compared to resources available and capacity issues are identified and managed. Activity-based budgeting (ABB) is based on the outputs of activity-based planning.

Activity Dictionary
A listing and description of activities that provides a common/standard definition of activities across the organization. An activity dictionary can include information about an activity and/or its relationships, such as activity description, business process, function source, whether value-added, inputs, outputs, supplier, customer, output measures, cost drivers, attributes, tasks, and other information as desired to describe the activity.

Activity Driver
The best single quantitative measure of the frequency and intensity of the demands placed on an activity by cost objects or other activities. It is used to assign activity costs to cost objects or to other activities.

Activity Level
A description of types of activities dependent on the functional area. Product-related activity levels may include unit, batch, and product levels. Customer-related activity levels may include customer, market, channel, and project levels.

Activity network diagram
An arrow diagram used in planning and managing processes and projects.

Activity Ratio
A financial ratio used to determine how an organization’s resources perform relative to the revenue the resources produce. Activity ratios include inventory turnover, receivables conversion period, fixed-asset turnover, and return on assets.

Actual Cost System
A cost system that collects costs historically as they are applied to production and allocates indirect costs to products based on the specific costs and achieved volume of the products.

Actual Costs
The labor, material, and associated overhead costs that are charged against a job as it moves through the production process.

Actual Demand
Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or ‘consumes’ the forecast, depending upon the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence), but will net against the forecast outside this horizon based on the chosen forecast consumption rule.

Actual to Theoretical Cycle Time
The ratio of the measured time required to produce a given output divided by the sum of the time required to produce a given output based on the rated efficiency of the machinery and labor operations.

Ad Valorem (Latin)
According to Value (English), For example, if a bill of lading shows a value for the cargo being carried, an Ad Valorem charge will be levied. This charge is required because the insurance liability of the carrier increases. This charge may be a levied as a percentage of the value that has been shown.

Adaptive Control
(1) The ability of a control system to change its own parameters in response to a measured change in operating conditions.(2) Machine control units in which feeds and/or speeds are not fixed. The control unit, working from feedback sensors, is able to optimize favorable situations by automatically increasing or decreasing the machining parameters. This process ensures optimum tool life or surface finish and/or machining costs or production rates.

Adaptive Smoothing
In forecasting, a form of exponential smoothing in which the smoothing constant is automatically adjusted as a function of one or many items, for example, forecast error measurement, calendar characteristics (launch, replenishment, end of life), or demand volume.

Addendum
Authorized supplement or addition to a shipping or other transportation document that identifies additional services, changes in services and accompanying charges.

Add-Ons
Additional charges above ocean freight.

Address
A number, or a combination of numbers and/or letters, used to designate a particular warehouse location facing or slot.

Administrative Code
A regulation or rule having the effect of law and promulgated by an agency to make a law specific. Such regulations are subject to Legislative approval prior to enactment.

Advance Material Request
Ordering materials before the release of the formal product design. This early release is required because of long lead times.

Advanced Planning and Scheduling
Techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. Management then selects one scenario to use as the ‘official plan.’ The five main components of APS systems are demand planning, production planning, production scheduling, distribution planning, and transportation planning.

Advanced Planning Systems
An analytic decision support tool for production scheduling. The APS applications consist of an intelligent engine that assists planners and schedulers in developing schedules. APS applications take into consideration production constraints, with the assumption that capacities are finite.

Advanced Shipping Notice
Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. May also include carrier and shipment specifics including time of shipment and expected time of arrival. See also: Assumed Receipt

Advice of Shipment
Notification to the purchaser that shipment has been made. Agency-A department or administrative division of a government authorized to transact certain business.

Advising Bank
Bank where a shipper negotiates documents or where documents are first presented, usually at country of origin. Also, often referred to as the negotiating bank.

Aftermarket
An aftermarket is a customer segmentation that has demand for accessory, replacement, or refurbished parts. For example, a market for new cars. There is a different market (aftermarket) for floor mats (accessory), tires and batteries (replacement), and rebuilt starter motors (refurbish). An aftermarket continues well beyond the purchase of the new car

After-Sale Service
Services provided to the customer after products have been delivered. This can include repairs, maintenance and/or telephone support. Synonym: Field Service.

Agency tariff
A publication of a rate bureau that contains rates for many carriers.

Agent
(1) Abbreviation for ‘Freight Agent’. (2) A person, association or corporation authorised to publish and file rates and provisions for a carrier’s account in tariffs published in the agent’s name. (3) One that acts for, or in the place of, another by authority from him, e.g. a (business) representative, emissary, or official of a government. (4) A person, association or corporation authorised to publish and file rates and provisions for a carrier’s account in tariffs published in the agent’s name. (5) An enterprise authorized to transact business for, or in the name of, another enterprise. (6) Warehouse that provides storage, local pickup, local delivery, installation or other services.

Agglomeration
A net advantage gained by a common location with other companies.

Aggregate Forecast
An estimate of sales, often time phased, for a grouping of products or product families produced by a facility or firm. Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning (or for sales and operations planning) purposes.

Aggregate Inventory
The inventory for any grouping of items or products involving multiple stock-keeping units. Also see: Base Inventory Level.

Aggregate Inventory Management
Establishing the overall level (dollar value) of inventory desired and implementing controls to achieve this goal.

Aggregate Plan
A plan that includes budgeted levels of finished goods, inventory, production backlogs, and changes in the workforce to support the production strategy. Aggregated information (e.g., product line, family) rather than product information is used, hence the name aggregate plan.

Aggregate Planning
A process to develop tactical plans to support the organization’s business plan. Aggregate planning usually includes the development, analysis, and maintenance of plans for total sales, total production, targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist–production planning and sales and operations planning.

Aggregate tender rate
A reduced rate offered to a shipper who tenders two or more class-rated shipments at one time and one place.

Aggregated Shipments
Numerous shipments from different shippers delivered to one consignee, that are consolidated and treated as a single consignment.

Agile manufacturing
Tools, techniques, and initiatives that enable a plant or company to thrive under conditions of unpredictable change. Agile manufacturing not only enables a plant to achieve rapid response to customer needs, but also includes the ability to quickly reconfigure operations–and strategic alliances–to respond rapidly to unforeseen shifts in the marketplace. In some instances, it also incorporates ‘mass customization’ concepts to satisfy unique customer requirements. In broad terms, it includes the ability to react quickly to technical or environmental surprises.

Agility
The ability to successfully manufacture and market a broad range of low-cost, high-quality products and services with short lead times and varying volumes that provides enhanced value to customers through customization. Agility merges the four distinctive competencies of cost, quality, dependability, and flexibility.

Agreement
A bargain between parties in dealing with one another such as may be applied in procurement to define terms and performance.

AGVS
see Automated Guided Vehicle System

AI
All Inclusive.

Air Cargo
Freight that is moved by air transportation.

Air Cargo Containers
Containers designed to conform to the inside of an aircraft. There are many shapes and sizes of containers. Air cargo containers fall into three categories: (1) air cargo pallets (2) lower deck containers (3) box type containers.

Air Freight
A service providing the air transportation of goods. This mode of transportation allows for decreased shipping time, low damage ratios and for certain commodities, lower shipping costs.

Air Freight Forwarder
A non-asset based firm that negotiates low shipping rates with airlines, then takes orders at a higher rate in order to make a profit using the airline’s assets to move the product.

Air taxi
An exempt for-hire air carrier that will fly anywhere on demand: air taxis are restricted to a maximum payload and passenger capacity per plane.

Air Transport Association of America
A U.S. airline industry association.

Air Waybill
A document issued by a carrier to a shipper that supplies written evidence regarding the receipt of goods, the mode of transportation and the arrangement to deliver goods at the requested destination to the lawful holder of the bill of lading. A standard air waybill accommodates both domestic and international traffic.

Airport and Airway Trust Fund
A federal fund that collects passenger ticket taxes and disburses those funds for airport facilities.

Aisle
Any passageway within a storage area.

Alaskan carrier
A for-hire air carrier that operates within the state of Alaska.

Alert
See Action Message.

Algorithm
A clearly specified mathematical process for computation, a set of rules, which, if followed, give a prescribed result.

All or None bid
An invitation to bid for more than one, or a list of items or services for which a partial award would not be made.

All Water
When a shipment is transported from its origin to its destination solely by water transportation.

All-cargo carrier
An air carrier that transports cargo only.

Alliance
A union of one or more companies having relationship in qualities. Supply chain alliances consist of trading partners having complimentary goals and objectives that are willing to collaborate in the areas of planning, forecasting and replenishments.

Allocated item
In an MRP system, an item for which a picking order has been released to the stockroom but not yet sent from the stockroom.

Allocation
(1)In cost accounting, a distribution of costs using calculations that may be unrelated to physical observations or direct or repeatable cause-and-effect relationships. Because of the arbitrary nature of allocations, costs based on cost causal assignment are viewed as more relevant for management decision-making.(2) In order management, allocation of available inventory to customer and production orders.

Allocation Costing
See Absorption Costing

Alpha release
A very early release of a product to get preliminary feedback about the feature set and usability.

Alternate Bid
(1) A bid offering alternative goods or services. (This type of offer may suffice when requirements may be met with various items or service. (2) A bid submitted which offers goods or services in substitution of those requested. Such an award would be considered only if the bid conditions allow and if the offer is acceptable.

Alternate Routing
A routing, usually less preferred than the primary routing, but resulting in an identical item. Alternate routings may be maintained in the computer or off-line via manual methods, but the computer software must be able to accept alternate routings for specific jobs.

Alternative Request for Proposals
A Request for Proposals inviting innovative proposals which would meet the needs of the using agency(ies).

American Customer Satisfaction Index
Released for the first time in October 1994, an economic indicator and cross industry measure of the satisfaction of U.S. household customers with the quality of the goods and services available to them– both those goods and services produced within the United States and those provided as imports from foreign firms that have substantial market shares or dollar sales. The ACSI is co-sponsored by the University of Michigan Business School, ASQ and the CFI Group.

American National Standards Institute
A non-profit organization chartered to develop, maintain, and promulgate voluntary U.S. national standards in a number of areas, especially with regards to setting EDI standards. ANSI is the U.S. representative to the International Standards Organization (ISO).

American Society for Quality
Founded in 1946, a not-for-profit educational organization consisting of 144,000 members who are interested in quality improvement.

American Society for Testing and Materials
Not-for-profit organization that provides a forum for the development and publication of voluntary consensus standards for materials, products, systems and services.

American Society for Training and Development
A membership organization providing materials, education and support related to workplace learning and performance.

American Society of Transportation & Logistics
A professional organization founded in 1946 with goals of establishing, promoting and maintaining high standards of knowledge and professional training, serving as a source of information and guidance for the fields of logistics.

American Standard Code for Information Interchange
ASCII format - simple text based data with no formatting. The standard code for information exchange among data processing systems. Uses a coded character set consisting of 7-bit coded characters (8 bits including parity check).

American Trucking Association, Inc.
A motor carrier industry association that is made up of subconferences representing various sectors of the motor carrier industry.

American Waterway Operators
A domestic water carrier industry association representing barge operators on the inland waterways.

Amtrak
The National Railroad Passenger Corporation, a federally created corporation that operates most of the United States’ intercity passenger rail service.

Animated GIF
A file containing a series of GIF (Graphics Interchange Format) images that are displayed in rapid sequence by some Web browsers, giving an animated effect. Also see: GIF.

ANSI
see American National Standards Institute

ANSI ASC X12
American National Standards Institute Accredited Standards Committee X1(2) The committee of ANSI that is charted with setting EDI standards.

ANSI Standard
A published transaction set approved by ANSI. The standards are reviewed every six months.

Anticipated Delay Report
A report, normally issued by both manufacturing and purchasing to the material planning function, regarding jobs or purchase orders that will not be completed on time and explaining why the jobs or purchases are delayed and when they will be completed. This report is an essential ingredient of the closed-loop MRP system. It is normally a handwritten report. Synonym: delay report.

Anticipation Inventories
Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations.

Antitrust Legislation
Laws(s) enacted to prevent noncompetitive trade, supply monopolies or market control by a limited number of producers.

Any Quantity [AQ]
A rating that applies to an item regardless of weight.

Any-quantity rate
The same rate applies to any size shipment tendered to a carrier, no discount rate is available for large shipments.

Applicability Statement 2
A specification for Electronic Data Interchange between businesses using the Internet’s Web page protocol, the Hypertext Transfer Protocol (HTTP). The specification is an extension of the earlier version, Applicability Statement 1 (AS1). Both specifications were created by EDI over the Internet (EDIINT), a working group of the Internet Engineering Task Force (IETF) that develops secure and reliable business communications standards.

Application Service Provider
A company that offers access over the Internet to application (examples of applications include word processors, database programs, Web browsers, development tools, communication programs) and related services that would otherwise have to be located in their own computers. Sometimes referred to as ‘apps-on-tap’, ASP services are expected to become an important alternative, especially for smaller companies with low budgets for information technology. The purpose is to try to reduce a company’s burden by installing, managing, and maintaining software.

Application-to-Application
The direct interchange of data between computers, without re-keying.

Appraisal Costs
Those costs associated with the formal evaluation and audit of quality in the firm. Typical costs include inspection, quality audits, testing, calibration, and checking time.

Appropriation
A Legislative designation of a budget or funding which may only be expended for a certain purpose.

Approved Brand or Equivalent Specification
A specification referencing a certain brand and model of a product that meets the quality and performances required. This type of specification may allow bidding of other manufacturer’s brands which comply with the standards called for. Also, known as a ‘Qualified Product’.

Approved Brand Specification
A specification referencing a brand and model or certain manufacturer’s product. This specification does not allow equivalent brands.

Approved Vendor List
List of the suppliers approved for doing business. The AVL is usually created by procurement or sourcing and engineering personnel using a variety of criteria such as technology, functional fit of the product, financial stability, and past performance of the supplier.

APS
see Advanced Planning and Scheduling

APS
see Advanced Planning Systems

AQ
see Any-quantity rate

AQI
Agriculture Quarantine Inspection.

AQL
see Acceptable Quality Level

Arbitrary
(1) A fixed amount which a transportation line agrees to accept in a dividing joint rate. (2) A fixed amount added to or deducted from one station to make a rate from another station. (3) A fixed amount added to or deducted from a rate to one station to make a rate to another station. (4) An allowance added to an employee’s rate of pay in addition to regular wages, based on provisions included in the union contract.

Arbitration
A process to resolve a dispute between two parties by a decision presented by one or more disinterested and uninvolved parties.

Archival Quality
Paper products manufactured to withstand a specified time period retaining a required integrity of the original characteristics.

Army Corps of Engineers
A federal agency responsible for the construction and maintenance or waterways.

Arrival Notice
Documentation that notifies the consignee of arrival information for the goods and the freight charges due to be paid in exchange for the goods.

Arrow diagram
A planning tool to diagram a sequence of events or activities (nodes) and the interconnectivity of such nodes. It is used for scheduling and especially for determining the critical path through nodes.

Artificial Intelligence
Understanding and computerizing the human thought process.

Artificial Tween Decks
Forty feet long, eight feet wide, one foot thick steel platform with hardwood flooring. Equipped with ten bullrings for securing oversized, heavy lift or wheeled cargo.

As Is
An indication or notice that the seller of goods will not be responsible for the condition or performance if the purchaser accepts them.

AS/RS
see Automated Storage/Retrieval System

AS2
see Applicability Statement 2

ASC
See Accredited Standards Committee of ANSI.

ASC X12
Accredited Standards Committee X1(2) A committee of ANSI chartered in 1979 to develop uniform standards for the electronic interchange of business documents.

ASCII
see American Standard Code for Information Interchange

ASN
see Advanced Shipping Notice

ASP
see Application Service Provider

ASQ
see American Society for Quality

Assemble to Order
A production environment performed in a warehouse, where product is assembled after receipt of a customer’s order. The key components used in the assembly process are scheduled and usually stocked in expectation of a customer order. The receipt of an order initiates the assembly of the customized product.

Assemble-to-order
A production environment where a good or service can be assembled after receipt of a customer’s order. The key components (bulk, semi-finished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components. Synonym: Finish to Order. Also see: Make to Order, Make to Stock.

Assembly
A group of subassemblies and/or parts that are put together and that constitute a major subdivision for the final product. An assembly may be an end item or a component of a higher level assembly.

Assembly Line
An assembly process in which equipment and work centers are laid out to follow the sequence in which raw materials and parts are assembled.

Asset
Any inventory or item owned by a corporation or association of value.

Asset Management
Identifying the assets of a project and creating solutions that help identify, track and manage.

Asset Swap
An asset swap allows the pre-placement of assets at a new business location, supporting a quick and efficient turnover during the actual relocation to minimize downtime. See Equipment Relocation.

Asset-Based, Third Party Provider
A third party provider that owns transportation and/or warehouse assets.

Assignment
(1) The transfer to another of one’s own legal interests or rights. (2) Especially the transfer of property to be held in trust or to be used for the benefit of creditors. (3) The document by which such an interest or right is transferred. (4) A distribution of costs using causal relationships. Because cost causal relationships are viewed as more relevant for management decision-making, assignment of costs is generally preferable to allocation techniques. (Synonymous with Tracing. Contrast with Allocation.)

Assignment
A subcontract or a transfer of claims, rights or interests of goods, services or property.

Association of American railroads:
A railroad industry association that represents the larger U.S. railroads.

Assumed Receipt
The principle of assuming that the contents of a shipment are the same as those presented on a shipping or delivery note. Shipping and receiving personnel do not check the delivery quantity. This practice is used in conjunction with bar codes and an EDI-delivered ASN to eliminate invoices and facilitate rapid receiving.

ASTD
see American Society for Training and Development

ASTM
see American Society for Testing and Materials

ATD
see Artificial Tween Decks

ATP
see Available-to-Promise

ATS
see Available to Sell

Attachment
An accessory that has to be physically attached to the product.

Attributes
A label used to provide additional classification or information about a resource, activity, or cost object. Used for focusing attention and may be subjective. Examples are a characteristic, a score or grade of product or activity, or groupings of these items, and performance measures.

Audit
(1) The inspection and examination of a process or quality system to ensure compliance to requirements. An audit can apply to an entire organization or may be specific to a function, process or production step. (2) In reference to freight bills, the term audit is used to verify the accuracy of freight bills.

Audit Trail
Manual or computerized tracing of the transactions affecting the contents or origin of a record.

Auditability
A characteristic of modern information systems, gauged by the ease with which data can be substantiated by trading it to source documents and the extent to which auditors can rely on pre-verified and monitored control processes.

Auditing
Determining the correct transportation charges due the carrier

Authentication
(1) The process of verifying the eligibility of a device, originator, or individual to access specific categories of information or to enter specific areas of a facility. This process involves matching machine-readable code with a predetermined list of authorized end users.(2) A practice of establishing the validity of a transmission, message, device, or originator, which was designed to provide protection against fraudulent transmissions.

Authentication Key
A short string of characters used to authenticate transactions between trading partners.

Authorized Price List
A list of goods or services resulting from a contract which provides agreed upon prices and the necessary information to place orders.

Autodiscrimination
The functionality of a bar code reader to recognize the bar code symbology being scanned thus allowing a reader to read several different symbologies consecutively

AutoID
Referring to an automated identification system. This includes technology such as bar coding and radio frequency tagging (RFID).

Automated Call Distribution
A feature of large call center or ‘Customer Interaction Center’ telephone switches that routes calls by rules such as next available employee, skill-set etc.

Automated Clearinghouse
Automated Clearinghouse. A nationwide electronic payments system, which more than 15,000 financial institutions use, on behalf of 100,000 corporations and millions of consumer in the U.S. The funds transfer system of choice among businesses that make electronic payments to vendors, it is economical and can carry remittance information in standardized, computer processable data formats.

Automated Commercial Environment
Update of outmoded Automated Commercial System (ACS). It is intended to provide automated information system to enable the collection, processing and analysis of commercial import and export data, allowing for moving goods through the ports faster and at lower cost, as well as detection of terrorist threats.

Automated Guided Vehicle System
A transportation network that automatically routes one or more material handling devices, such as carts or pallet trucks, and positions them at predetermined destinations without operator intervention.

Automated Storage/Retrieval System
A high-density rack inventory storage system with un-manned vehicles automatically loading and unloading products to/from the racks.

Automatic Relief
A set of inventory bookkeeping methods that automatically adjusts computerized inventory records based on a production transaction. Examples of automatic relief methods are backflushing, direct-deduct, pre-deduct, and post-deduct processing.

Automatic Rescheduling
Rescheduling done by the computer to automatically change due dates on scheduled receipts when it detects that due dates and need dates are out of phase. Antonym: manual rescheduling.

Availability
A term used to describe the access a customer has to equipment, data or assets during a relocation or migration event.

Available Inventory
The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called ‘beginning available balance’. Synonyms: Beginning Available Balance, Net Inventory. Available to Promise (ATP): The uncommitted portion of a company’s inventory and planned production maintained in the master schedule to support customer-order promising. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory less customer orders that are due and overdue. Three methods of calculation are used: discrete ATP, cumulative ATP with lookahead, and cumulative ATP without lookahead.

Available to Sell
Total quantity of goods committed to the pipeline for a ship to or selling location. This includes the current inventory at a location and any open purchase orders.

Available-to-Promise
The uncommitted portion of a company’s inventory and planned production, maintained in the master schedule to support customer order promising. The ATP quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory less customer orders that are due and overdue.

Average Annual Production Materials Related A/P (A
The value of direct materials acquired in that year for which payment has not yet been made. Production-related materials are those items classified as material purchases and included in the Cost of Goods Sold (COGS) as raw material purchases. Calculate using the 5-Point Annual Average.

Average Cost per Unit
The estimated total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced.

Average Inventory
The average inventory level over a period of time. Implicit in this definition is a ’sampling period’ which is the amount of time between inventory measurements. For example, daily inventory levels over a two-week period of time, hourly inventory levels over one day, etc. The average inventory for the same total period of time can fluctuate widely depending upon the sampling period used.

Average Payment Period (for materials)
The average time from receipt of production-related materials and payment for those materials. Production-related materials are those items classified as material purchases and included in the Cost of Goods Sold (COGS) as raw material purchases. (An element of Cash-to-Cash Cycle Time) Calculation: [Five point annual average production-related material accounts payable] / [Annual production-related material receipts/365]

AVL
see Approved Vendor List

Avoidable Cost
A cost associated with an activity that would not be incurred if the activity was not performed (e.g., telephone cost associated with vendor support).

Award
A notification that a bid or proposal is accepted.

AWB
see Air Waybill

Active tag
An RFID tag that has a transmitter to send back information, rather than reflecting back a signal from the reader, as a passive tag does. Most active tags use a battery to transmit a signal to a reader. However, some tags can gather energy from other sources. Active tags can be read from 300 feet (100 meters) or more, but they’re expensive (typically more than US$20 each). They’re used for tracking expensive items over long ranges. For instance, the U.S. military uses active tags to track containers of supplies arriving in ports.

Addressability
The ability to write data to different fields, or blocks of memory, in the microchip in an RFID transponder.

Agile reader
A generic term that usually refers to an RFID reader that can read tags operating at different frequencies or using different methods of communication between the tags and readers.

Antenna
The tag antenna is the conductive element that enables the tag to send and receive data. Passive, low- (135 kHz) and high-frequency (13.56 MHz) tags usually have a coiled antenna that couples with the coiled antenna of the reader to form a magnetic field. UHF tag antennas can be a variety of shapes. Readers also have antennas which are used to emit radio waves. The RF energy from the reader antenna is “harvested” by the antenna and used to power up the microchip, which then changes the electrical load on the antenna to reflect back its own signals.

Authentication
The verification of the identity of a person, object or process. In RFID, the term is used in two ways. For contactless smart cards and other payments systems, the reader must make sure the transponder is a valid device within the system. That is, someone is not using an unauthorized device to commit fraud. There is also some talk of using EPC technology to authenticate products as a way of reducing counterfeiting.

Auto-ID Center
A non-profit collaboration between private companies and academia that pioneered the development of an Internet-like infrastructure for tracking goods globally through the use of RFID tags carrying Electronic Product Codes. The center closed its doors in September 2003. EPCglobal was set up to continue the work of commercializing EPC technology, and the center’s research work is carried on by Auto-ID Labs at universities around the world.

Automatic Identification
A broad term that covers methods of collecting data and entering it directly into computer systems without human involvement. Technologies normally considered part of auto-ID include bar codes, biometrics, RFID and voice recognition.

Automatic identification and data capture
A broad term that covers methods of identifying objects, capturing information about them and entering it directly into computer systems without human involvement. Technologies normally considered part of auto-ID include bar codes, biometrics, RFID and voice recognition.

Automation
Applied to improve the effectiveness and efficiency of entities and activities within the supply chain

AIDC
See Automatic identification and data capture