 Core competencies: Provide the greatest level of values to its customers in a way that is difficult for competitors to

emulate and that provides for future growth.

 Enterprise Resource Planning (ERP): Framework for organizing, defining, and standardizing the business process
necessary to effectively plan and control an organization.
 organization use its internal knowledge to seek external advantage.
 Flexibility: Response quickly in term of range and time, to external and internal changes.
 Operations management: Direction of processes (sourcing, production, and deliver) of products and service
 Outsourcing: Instead of making internally give it to supplier.
 Batch manufacturing: sets of items are moved through the different manufacturing steps in a group or batch.
 Manufacturing planning and control (MPC) system: A closed loop information which include the planning functions of
production planning and capacity requirement planning
 Production Kanban: A signal, usually a card, used to trigger the production of a part.
 Push system: the production of items at times required by a given schedule planned in advance.
 Bill of material (BOM): A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent
assembly showing the quantity of each required to make an assembly.
 Efficiency: A measurement of the actual output to the standard output expected. Efficiency measures how well
something is performing relative to existing standards.
 Routing: Information detailing the method of manufacturing of a particular item. It includes the operations to be
performed, their sequence, the various work centers involved, and the standards for setup and run.
 Standard costs: The target costs of an operation, process, or product including direct material, direct labor, and
overhead changes.
 Work center: A specific production area, consisting of one or more people and/or machines with similar capabilities that
can be considered as one unit for purposes of capacity requirements planning and detailed scheduling.
 Dependent demand: Demand that is directly related to or derived from the bill of material structure for other items or
end products.
 Gross requirement: The total of independent and dependent demand for a component before the netting of on-hand
inventory and scheduled receipts.
 Lead-time offset: A technique used in MRP where a planned order receipt in one time period will require the release of
that order in an earlier time period based on the lead time for the item.
 Order point: A set inventory level where, if the total stock on hand plus on order falls to or below that point, actions
taken to replenish the stock.
 Service level: A measure of satisfying demand through inventory or by the current production schedule in time to satisfy
the customers’ requested deliver dates and quantities.
 Exception report: A report that lists or flags only those items that deviate from the plan.
 Firm planned order (FPO): A planned order that can be frozen in quantity and time.
 Net change MRP: whenever a change Is needed in material requirement plan, open order inventory status, or bill of
material, a partial explosion and netting is made or only those parts effected by the change.
 Planning horizon: The amount of time a plan extends into the future. For a master schedule, this is normally set to cover
a minimum of cumulative lead time plus time for lot sizing low-level components and core capacity changes of primary
work centers or of key suppliers.
Priority planning: The function of prioritize the needed material in master production scheduling and material
requirement planning to maintain proper due dates on required materials.