Glossary

A message created from a system (such as an MRP or DRP) that identifies a needed action. An example is a release order. Also called an Alert.

Goods that are physically available and ready to be used.

Work performed. There can be multiple activities - often linked - done manually and mechanically. Accounting may track the activities separately.

Identifying and reviewing activities (see above) to better understand the work involved and cost of each activity.

Using cost driver data, based on the projected workload and the associated resources to perform the work, to determine the budget.

A costing method that assigns overhead and indirect costs to products and services. Often used to get more accurate costs for manufacturing processes.

Using the Activity-Based Costing (ABC) data to predict - or model - expenses for specific activities under various scenarios.

The use of multiple Activity-Based Costing (ABC) models to gather data on an organization's costs.

Using Activity-Based Costing (ABC) and value chain analyses to evaluate business activity with the objective of making improvements.

The process of determining the resource requirements for specific products or services. Part of the Activity-Based Costing (ABC) process.

A resource describing the details of each activity in an organization. Provides a standard within an organization for the expectations of each activity.

The standard, the measure used for expected performance and to assign costs to activities.

Describes the activities in each functional area. Examples include batches for production and market channels for customers.

Financial formulas that help a business determine its operating efficiency and cash generation. Examples are inventory and accounts receivable turnover ratios.

Determining product (or service) costs based on the actual cost of materials, labor, and allocated overhead.

The systematic use of actual historical costs, rather than budgeted costs or projections, to determine costs.

Demand based on customer orders rather than budgeted projections.

The actual time of arrival (ATA) is the precise time a shipment arrives (at the destination location). This is often different than the estimated time of arrival (ETA).

Ratio of the actual time required to produce a given output divided by the sum of the expected time required to produce a given output.

Used by the Canada Border Services Agency (CBSA) to issue monetary penalties to commercial clients for violating CBSA's trade and border legislation.

Ad Valerem (Latin for "according to value") Duty is a type of tax applied based on a percentage of the value of an item (e.g., for cross-border shipments).

A comprehensive analysis, using software, that includes demand, production, and logisitical factors to determine what plan to implement.

Detailed shipment information, usually transmitted electronically via EDI, transmitted by a supplier after a shipment is made and prior to delivery.

To order materials prior to the release of the formal product design. Sometimes required due to long lead times.

The resistance force of air to a moving body. Sometimes called wind resistance.