Key Terms in Production and Inventory Management
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Inventory Management
Safety Stock: The amount of inventory carried in addition to the expected demand.
Stock Keeping Unit (SKU): A common term used to identify an inventory item.
Material Requirements Planning (MRP)
Available to Promise: A feature of MRP systems that identifies the difference between the number of units currently included in the master schedule and actual (firm) customer orders.
Bill of Materials (BOM): A computer file that contains the complete product description, listing the materials, parts, and components, and the sequence in which the product is created.
Closed-loop MRP: The use of actual data from the production system to continually update the MRP system. This feedback is provided so that planning can be kept valid at all... Continue reading "Key Terms in Production and Inventory Management" »