Glossary of Terms

A

ABC Stratification

The stratification of inventory into levels associated with monetary and/or volume levels. Materials planning utilizes this methodology extensively in planning methodologies.

APICS

American Production and Inventory Control Society. This organization of professionals is the keeper of the body of knowledge for inventory planning topics and process flow materials. APICS can be reached at 1-800-444-APIC.

ATO (Assemble to Order)

An inventory strategy that master schedules assemble for availability when demand happens. Subassemblies and/or components are assembled after the demand signal. Dell Computer has made this strategy famous in recent years.

Audit

To audit a process such as inventory accuracy is to check accuracy of a process by a defined periodic check and measure.

Auto-Transactions

Same as backflushing.

B

Backflushing

A method of auto-deducting inventory balances from triggers created at transaction times such as the completion of production or the receipt transaction of inventory into finished goods.

Balance by Location

An inventory balance for only one location where a material or item is stored. This should not be confused with having more than one item in a location. They do not address the same subject.

Batch Environment

The process where transactions are not processed in the system at the time the actual event took place. Records of the transactions are kept and batched until they are entered into the computer system at a later time, usually at shift end or end of day. This is not a widely used system today because faster systems are widely...