1. economies of scale Decreasing average unit cost by increasing volume.
stockpiling or price break or
economies of scale?
economies of scale
Decreasing average unit
cost by increasing volume.
Page 286
Click here for Hint

2. price break A discount for orders of a certain minimum size.
price break or price break quantity or
shrinkage?
price break
A discount for orders of a
certain minimum size.
Page 286
Click here for Hint

3. inventory Tangible items awaiting sale or use.
inventory or finished goods or cycle stock?
inventory
Tangible items awaiting sale or use.
Page 284
Click here for Hint

4. lead time Any delay between requesting a product and receiving it.
holding cost or service level or lead time?
lead time
Any delay between requesting a product and receiving it.
Page 303
Click here for Hint

5. cycle stock Inventory held to gain economies of scale.
pipeline stock or cycle stock or inventory?
cycle stock
Inventory held to gain
economies of scale.
Page 286
Click here for Hint

6. opportunity cost Cost of an alternative foregone. In inventory
opportunity cost or tangibility or
cost of capital?
opportunity cost
Cost of an alternative
foregone. In inventory
planning, this is often the
cost of capital.
Page 287
Click here for Hint

7. fixed cost or variable cost or holding cost?
Cost that varies with volume of associated activity or, in inventory planning, the size of the order.
Page 287
Click here for Hint

8. reorder point or probabilistic or service level?
The probability that demand for an item will be met during the lead time on replenishment of that same item.
Page 305
Click here for Hint

9. shrinkage Physical loss of inventory before sale or use.
shrinkage or opportunity cost or tangibility?
shrinkage
Physical loss of inventory
before sale or use.
Page 287
Click here for Hint

10. sawtooth diagram A graph of inventory levels over time.
sawtooth diagram or algorithm or
Pareto analysis?
sawtooth diagram
A graph of inventory levels
over time.
Page 292
Click here for Hint

11. order cycle The time required for average demand to consume an order,
run size or order cycle or WIP?
order cycle
The time required for average demand to consume an order,
triggering another order for
replenishment.
Page 292
Click here for Hint

12. lead time or SKU or average inventory?
The average of the beginning and the ending inventory of a particular time period.
Page 293
Click here for Hint

13. inventory turnover The number of annual inventory cycles, sometimes
order cycle or inventory turnover or
stockpiling?
inventory turnover
The number of annual
inventory cycles, sometimes
referred to as turns.
Page 293
Click here for Hint

14. fixed cost or variable cost or holding cost?
Cost incurred regardless of the volume of associated activity. In inventory planning, this is understood to be costs incurred
regardless of the size of the
order.
Page 289
Click here for Hint

15. holding cost Variable costs associated with having inventory.
holding cost or variable cost or fixed cost?
holding cost
Variable costs associated
with having inventory.
Page 287
Click here for Hint

16. standard normal distribution
Pareto analysis or algorithm or
standard normal distribution?
standard normal distribution
A normal distribution with a mean of zero
and a variance of 1. Any other normal distribution can be converted to this
standard, allowing the use of standard normal tables to analyze the original
distributions.
Page 305
Click here for Hint

17. WIP (work in process) Inventory resulting from transformation of raw
WIP or average inventory or order cycle?
WIP (work in process)
Inventory resulting from
transformation of raw
materials, but not yet ready for sale to consumers.
Page 285
Click here for Hint

18. periodic review system
SKU or periodic review system or
fixed order interval policy?
periodic review system
An inventory system operated according to a fixed order interval policy.
Page 290
Click here for Hint

19. spoilage Unintended transformation
ABC policy or WIP or spoilage?
spoilage
Unintended transformation
of inventory before sale or use, rendering it inappropriate for its original purpose.
Page 287
Click here for Hint

20. deterministic or probabilistic or fixed cost?
Fixed and known in advance, representing a high level of certainty when planning.
Page 303
Click here for Hint

21. fixed order quantity policy
SKU or fixed order quality policy or
fixed order interval policy?
fixed order quantity policy
An inventory system in which the amount of replenishment is
predetermined at some economical value and its timing is then determined by the rate of previous
demand.
Page 289
Click here for Hint

22. SKU (stock keeping unit)
backorder or SKU or optimization?
SKU (stock keeping unit)
A particular item of
inventory.
Page 284
Click here for Hint

23. cost of capital The cost of funding for an organization, such as the
holding cost or fixed cost or cost of capital?
cost of capital
The cost of funding for an
organization, such as the
interest rate on borrowed
funds.
Page 287
Click here for Hint

24. run size or run time or order cycle?
A batch or order, size associated with the production of an item.
Page 300
Click here for Hint

25. backorder or stockpiling or safety stock?
Producing or securing goods in advance of demand, building up substantial inventory.
Page 286
Click here for Hint

26. backorder To delay order fulfillment due to inadequate supply.
back order or order cycle or service level?
backorder
To delay order fulfillment
due to inadequate supply.
Page 288
Click here for Hint

27. stock out To fail to meet customer demand due to inadequate supply.
stock out or shrinkage or opportunity cost?
stock out
To fail to meet customer
demand due to inadequate
supply.
Page 288
Click here for Hint

28. tangibility The degree of perceivable, physical essence of a product.
tangibility or optimization or inventory?
tangibility
The degree of perceivable,
physical essence of a
product.
Page 284
Click here for Hint

29. run time The time required to produce a batch of some item.
run size or run time or order cycle?
run time
The time required to produce a batch of some item.
Page 300
Click here for Hint

30. fixed order interval policy
SKU or fixed order quality policy or
fixed order interval policy?
fixed order interval policy
An inventory system in which the amount of replenishment is
determined by the rate of previous demand and its timing is predetermined at an economical interval.
Page 290
Click here for Hint

31. algorithm A procedure described by a series of steps.
algorithm or SKU or
standard normal distribution?
algorithm
A procedure described by a
series of steps.
Page 298
Click here for Hint

32. price break quantity The minimum order size
price break or price break quantity or
order cycle?
price break quantity
The minimum order size
that qualifies for a quantity
discount.
Page 297
Click here for Hint

33. ABC policy or Pareto analysis or algorithm?
The use of statistics to identify which factors are the most influential in a particular outcome of interest.
Page 290
Click here for Hint

34. safety stock or reorder point or run size?
An inventory level that triggers replenishment of an item.
Page 303
Click here for Hint

35. ABC policy Prioritizing the management
cycle stock or ABC policy or Pareto analysis?
ABC policy
Prioritizing the management
of inventory according to the significance of each item’s annual dollar volume to the organization.
Page 290
Click here for Hint

36. raw materials Inventory brought in from outside the system.
cycle stock or safety stock or raw materials?
raw materials
Inventory brought in from
outside the system.
Page 285
Click here for Hint

37. safety stock Inventory held to protect against uncertain supply or
pipeline stock or cycle stock or safety stock?
safety stock
Inventory held to protect
against uncertain supply or
demand.
Page 286
Click here for Hint

38. optimization Identification of the best alternative.
optimization or probabilistic or deterministic?
optimization
Identification of the best
alternative.
Page 292
Click here for Hint

39. pipeline stock Inventory currently in transit between locations.
pipeline stock or cycle stock or safety stock?
pipeline stock
Inventory currently in transit
between locations.
Page 286
Click here for Hint

40. finished goods Inventory awaiting sale to consumers.
cycle stock or inventory or finished goods?
finished goods
Inventory awaiting sale to
consumers.
Page 285
Click here for Hint

41. deterministic or probabilistic or algorithm?
Variable or not well known in advance; subject to randomness. This represents some uncertainty in planning.
Page 303
Click here for Hint