Supply Chain And Logistics Glosario

SUPPLY CHAIN and LOGISTICS TERMS and GLOSSARY
Updated February 2005

A
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 othercriteria. 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 ABCInventory 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 createsa 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. Thisdemand 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 Costing: In cost management, an approach to inventory valuation inwhich 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 (AQL): In quality management, when a continuing series of lots is considered, AQL represents a quality level that, for thepurposes 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 atwhich 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.

Definitions compiled by: Kate Vitasek Supply Chain Visions www.scvisions.com Bellevue, Washington Please note: The Council ofSupply Chain Management Professionals (CSCMP) does not take responsibility for the content of these definitions, nor does CSCMP endorse these as official definitions except as noted. Page 1 of 116

SUPPLY CHAIN and LOGISTICS TERMS and GLOSSARY
Updated February 2005
Acceptance Sampling: 1) The process of sampling a portion of goods for inspection rather than examining the entire lot. The entirelot 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...