User-input parameters to suppress the reporting of insignificant or unimportant action messages.

Dark factory
A completely automated production facility with no labor. Syn: lightless plant.

Any representations, such as alphabetic or numeric characters, to which meaning can be assigned.

A data processing file-management approach designed to establish the independence of computer programs from data files. Redundancy is minimized, and data elements can be added to, or deleted from, the file structure without necessitating changes to existing computer programs.

Database management system (DBMS)
The software designed for organizing data and providing the mechanism for storing, maintaining, and retrieving that data on a physical medium (i.e., a database). A DBMS separates data from the application programs and people who use the data and permits many different views of the data.

Data collection
The act of compiling data for recording, analysis, or distribution.

Data communications
The transmission of data over a distance.

Data dictionary
1) A catalog of requirements and specifications for an information system. 2) A file that stores facts about the files and databases for all systems that are currently being used or for the software involved.

Data element
A group of characters that defines an item at a basic level. Syn: data field.

Data field
Syn: data element.

Data file
A collection of related data records organized in a specific manner (e.g., one record for each inventory item showing product code, unit of measure, production costs, transactions, selling price, production lead time, etc.).

Data hierarchy
A structure of relationships between data elements (or records) that can be expressed in a treelike structure. All of the subordinate data segments in a multilevel structure are dependent on the keys of the parent data segments. All of the relationships between records are one to many.

Data mining
The process of studying data to search for previously unknown relationships. This knowledge is then applied to achieving specific business goals.

Data transfer
The movement by electronic means of data from one location to another. The data can take the form of voice, text, image, or others. The movement is accomplished by communication links between computers and a variety of input/output devices.

Data warehouse
A repository of data that has been specially prepared to support decision-making applications. Syn: decision-support data. See:, information data warehouse.

Date code
A label on products with the date of production. In food industries, it is often an integral part of the lot number.

Date effectivity
A technique used to identify the effective date of a configuration change. A component change is controlled by effective date within the bill of material for the unchanged parent part number.

Abbreviation for database management system.

Abbreviation for drum-buffer-rope.

D chart
A control chart for evaluating a process in terms of a demerit (or quality score), e.g., a weighted sum of counts of various classified nonconformities. Syn: demerit chart.

Abbreviation for distributed data processing.

The return of an empty transportation container to its point of origin. See: backhauling.

A bond that is backed by the general credit of the issuing firm.

The further processing of a product to adjust specific physical and chemical properties to within specification ranges.

An amount owed to creditors. It is generally equal to the total assets in a company less the equity. See liabilities.

Debt-to-equity ratio
The amount of bonds and preferred stocks relative to the owners’ equity position. The debt to equity ratio is a measurement of the use of borrowed funds to leverage owners’ equity.

Decentralized computer network
A network where there is no central computer or computers linked to all other computers in the group.

Decentralized dispatching
The organization of the dispatching function into individual departmental dispatchers.

Decentralized inventory control
Inventory decision making exercised at each stocking location for SKUs at that location.

Decision matrix
A matrix used by teams to evaluate problems or possible solutions. After a matrix is drawn to evaluate possible solutions, for example, the team lists the solutions in the far left vertical column. Next, the team selects criteria to rate the possible solutions, writing them across the top row. Third, each possible solution is rated on a scale of 1 to 5 for each criterion and the rating recorded in the corresponding grid. Finally, the ratings of all the criteria for each possible solution are added to determine its total score. The total score is then used to help decide which solution deserves the most attention.

Decisions under certainty
Simple decisions that assume complete information and no uncertainty connected with the analysis of decisions.

Decisions under risk
Decision problems in which the analyst elects to consider several possible futures, the probabilities of which can be estimated.

Decisions under uncertainty
Decisions for which the analyst elects to consider several possible futures, the probabilities of which cannot be estimated.

Decision-support data
Syn: data warehouse.

Decision support system (DSS)
A computer system designed to assist managers in selecting and evaluating courses of action by providing a logical, usually quantitative, analysis of the relevant factors.

Decision table
A means of displaying logical conditions in an array that graphically illustrates actions associated with stated conditions.

Decision tree
A method of analysis that evaluates alternative decisions in a tree-like structure to estimate values and/or probabilities. Decision trees take into account the time value of future earnings by using a rollback concept. Calculations are started at the far right-hand side, then traced back through the branches to identify the appropriate decision.

A method of forecasting where time series data are separated into up to three components: trend, seasonal, and cyclical; where trend includes the general horizontal upward or downward movement over time; seasonal includes a recurring demand pattern such as day of the week, weekly, monthly, or quarterly; and cyclical includes any repeating, nonseasonal pattern. A fourth component is random, that is, data with no pattern. The new forecast is made by projecting the patterns individually determined and then combining them. See: cyclical component, random component, seasonal component, trend component.

Creating independence between supply and use of material. Commonly denotes providing inventory between operations so that fluctuations in the production rate of the supplying operation do not constrain production or use rates of the next operation.

Decoupling inventory
An amount of inventory kept between entities in a manufacturing or distribution network to create independence between processes or entities. The objective of decoupling inventory is to disconnect the rate of use from the rate of supply of the item. See: buffer.

Decoupling points
The locations in the product structure or distribution network where inventory is placed to create independence between processes or entities. Selection of decoupling points is a strategic decision that determines customer lead times and inventory investment. See: control points.

Transformation of encrypted text into a readable format.

Dedicated capacity
A work center that is designated to produce a single item or a limited number of similar items. Equipment that is dedicated may be special equipment or may be grouped general-purpose equipment committed to a composite part.

Dedicated equipment
Equipment whose use is restricted to specific operations on a limited set of components.

Dedicated line
A production line permanently configured to run well-defined parts, one piece at a time, from station to station.

The reprioritizing of jobs to a lower level of activity. All extraordinary actions involving these jobs stop.

Injury to another’s reputation by a public utterance: print (libel) or oral (slander).

The action that will be taken by a computer program when the user does not specify a variable parameter.

A good’s or service’s nonfulfillment of an intended requirement or reasonable expectation for use, including safety considerations. There are four classes of defects: Class 1, Very Serious, leads directly to severe injury or catastrophic economic loss; Class 2, Serious, leads directly to significant injury or significant economic loss; Class 3, Major, is related to major problems with respect to intended normal or reasonably foreseeable use; and Class 4, Minor, is related to minor problems with respect to intended normal or reasonably foreseeable use. See: blemish, imperfection, nonconformity.

Defects per million opportunities
The quantity of defects per one million defect opportunities—a potential problem that is important to the customer.

Failure to meet quality standards.

Degrees of freedom
A statistical term indicating the number of variables or data points used for testing a relationship. The greater the degrees of freedom, the greater the confidence that can be placed on the statistical significance of the results.

Delay report
Syn: anticipated delay report.

Delay reporting
Reporting against an operation status of a manufacturing order on an exception basis, when delays are anticipated.

Delinquent order
Syn: past due order.

Delivery cycle
Syn: delivery lead time.

Delivery lead time
The time from the receipt of a customer order to the delivery of the product. Syn: delivery cycle.

Delivery policy
The company’s goal for the time to ship the product after the receipt of a customer’s order. The policy is sometimes stated as “our quoted delivery time.”

Delivery schedule
The required or agreed time or rate of delivery of goods or services purchased for a future period.

Delphi method
A qualitative forecasting technique where the opinions of experts are combined in a series of iterations. The results of each iteration are used to develop the next, so that convergence of the experts’ opinions is obtained. See: management estimation, panel consensus.

A need for a particular product or component. The demand could come from any number of sources, e.g., customer order or forecast, an interplant requirement, or a request from a branch warehouse for a service part or for manufacturing another product. At the finished goods level, demand data are usually different from sales data because demand does not necessarily result in sales (i.e., if there is no stock, there will be no sale). There are generally up to four components of demand: cyclical component, random component, seasonal component, and trend component.

Demand-based order quantity
An order system using forecast or derived demand for one or more future periods (rather than a fixed quantity as in economic order quantity).

Demand chain management
A supply chain inventory management approach that concentrates on demand pull rather than supplier push inventory models.

Demand curve
A graphic description of the relationship between price and quantity demanded in a market, assuming that all other factors stay the same. Quantity demanded of a product is measured on the horizontal axis for an array of different prices measured on the vertical axis.

Demand deposits
Deposits that can be withdrawn on demand or paid to a third party by check.

Demand during lead time
The quantity of a product expected to be withdrawn from stock or to be consumed during its replenishment lead time when usage is at the forecasted rate. See: expected demand.

Demand filter
A standard that is set to monitor sales data for individual items in forecasting models. It is usually set to be tripped when the demand for a period differs from the forecast by more than some number of mean absolute deviations.

Demand forecasting
Forecasting the demand for a particular good, component, or service.

Demand lead time
The amount of time potential customers are willing to wait for the delivery of a good or a service. Syn: customer tolerance time.

Demand management
1) The function of recognizing all demands for goods and services to support the marketplace. It involves prioritizing demand when supply is lacking. Proper demand management facilitates the planning and use of resources for profitable business results. 2) In marketing, the process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services to bring about transactions that meet organizational and individual needs. Syn: marketing management.

Demand manager
Person who assists sales and marketing in the development and maintenance of sales forecasts and reconciles volume and mix variations in the forecast.

Demand pull
The triggering of material movement to a work center only when that work center is ready to begin the next job. It in effect eliminates the queue from in front of a work center, but it can cause a queue at the end of a previous work center.

Demand rate
A statement of requirements in terms of quantity per unit of time (hour, day, week, month, etc.).

Demand risk
The risk that declining economic activity substantially reduces the demand for a firm’s products or services.

Demand segmentation
Categorizing demand types into groups that share similar characteristics, e.g., government, large customers, and seasonal products. Similar segments can be treated alike in business or capacity planning.

Demand-side analysis
Techniques such as market research, surveys, focus groups, and performance/cost modeling used to identify emerging technologies.

Demand time fence (DTF)
1) That point in time inside of which the forecast is no longer included in total demand and projected available inventory calculations; inside this point, only customer orders are considered. Beyond this point, total demand is a combination of actual orders and forecasts, depending on the forecast consumption technique chosen. 2) In some contexts, the demand time fence may correspond to that point in the future inside which changes to the master schedule must be approved by an authority higher than the master scheduler. Note, however, that customer orders may still be promised inside the demand time fence without higher authority approval if there are quantities available-to-promise (ATP). Beyond the demand time fence, the master scheduler may change the MPS within the limits of established rescheduling rules, without the approval of higher authority. See: option overplanning, planning time fence, time fence.

Demand uncertainty
The uncertainty or variability in demand as measured by the standard deviation, mean absolute deviation (MAD), or variance of forecast errors.

Demerit chart
Syn: D chart.

Deming circle
The concept of a continuously rotating wheel of plan-do-check-action (PDCA) used to show the need for interaction among market research, design, production, and sales to improve quality. See: plan-do-check-action.

Deming Prize
An award given annually to organizations that, according to the award guidelines, have successfully applied companywide quality control based on statistical quality control and will keep up with it in the future. Although the award is named in honor of W. Edwards Deming, its criteria are not specifically related to Deming’s teachings. There are three separate divisions for the award: the Deming Application Prize, the Deming Prize for Individuals, and the Deming Prize for Overseas Companies. The award process is overseen by the Deming Prize Committee of the Union of Japanese Scientists and Engineers in Tokyo.

Deming’s 14 Points
Syn: 14 Points.

The characteristics of a specific population, such as a set of potential customers.

Demographic segmentation
In marketing, dividing potential markets by characteristics of potential customers, such as age, sex, income, and education.

Demonstrated capacity
Proven capacity calculated from actual performance data, usually expressed as the average number of items produced multiplied by the standard hours per item. See: maximum demonstrated capacity.

The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. See: detention, express.

Denied party list
A list of organizations that are unauthorized to submit a bid for an activity.

Departmental stocks
An informal system of holding some stock in a production department. This action is taken as a protection from stockouts in the stockroom or for convenience; however, it results in increased inventory investment and possible degradation of the accuracy of the inventory records.

Department overhead rate
The overhead rate applied to jobs passing through a department.

Dependent demand
Demand that is directly related to or derived from the bill of material structure for other items or end products. Such demands are therefore calculated and need not and should not be forecast. A given inventory item may have both dependent and independent demand at any given time. For example, a part may simultaneously be the component of an assembly and sold as a service part. See: independent demand.

The reduction in the value of a capital asset (usually a natural resource) in the balance sheet and charging this amount as an expense against income for the period. See: capital recovery.

Deployment planning and scheduling
Planning how to use existing inventory to meet demand requirements.

The sworn questioning, outside of court, of a potential witness by the other side’s attorney.

An allocation of the original value of an asset against current income to represent the declining value of the asset as a cost of that time period. Depreciation does not involve a cash payment. It acts as a tax shield and thereby reduces the tax payment. See: capital recovery, depletion, double-declining-balance depreciation, straight line depreciation, units-of-production depreciation.

Depreciation of a currency
A decrease in the buying power of a country’s currency in terms of other countries’ goods and services.

Derived demand
Demand for component products that arises from the demand for final design products. For example, the demand for steel is derived from the demand for automobiles.

The conversion of a need or innovation into a product, process, or service that meets both the enterprise and customer expectations. The design process consists of translating a set of functional requirements into an operational product, process, or service.

Design changeover flexibility
The capability of the existing production system to accommodate and introduce a large variety of major design changes quickly.

Design cycle
The interval of time between the start of the design process of one model and the completion of the design process for the model.

Design engineering
The discipline consisting of process engineering and product engineering.

Design for manufacturability
Simplification of parts, products, and processes to improve quality and reduce manufacturing costs.

Design for manufacture and assembly (DFMA)
A product development approach that involves the manufacturing function in the initial stages of product design to ensure ease of manufacturing and assembly. See: early manufacturing involvement.

Design for quality
A product design approach that uses quality measures to capture the extent to which the design meets the needs of the target market (customer attributes), as well as its actual performance, aesthetics, and cost. See: total quality engineering.

Design for service
Simplification of parts and processes to improve the after-sale service of a product.

Designing in Quality vs. Inspecting in Quality
Syn: prevention vs. detection.

Design-measure-analyze-improve-control (DMAIC) improvement model
A six sigma improvement process having five stages: (1) Determine the nature of the problem; (2) Measure existing performance and commence recording data and facts that offer information about the underlying causes of the problem; (3) Study the information to determine the root causes of the problem; (4) Improve the process by effecting solutions to the problem; and (5) Monitor the process until the solutions become ingrained.

Design of experiments (DOE)
1) A process for structuring statistically valid studies in any science. 2) A quality management technique used to evaluate the effect of carefully planned and controlled changes to input process variables on the output variable. The objective is to improve production processes.

Design review
A technique for evaluating a proposed design to ensure that the design (1) is supported by adequate materials and materials that are available on a timely basis, (2) will perform successfully during use, (3) can be manufactured at low cost, and (4) is suitable for prompt field maintenance.

Syn: engineer-to-order.

Detailed scheduling
Syn: operations scheduling.

Detail file
A file that contains manufacturing, routing, or specification details. See: master file.

Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time. See: demurrage, express.

Product spoilage, damage to the package, etc. This is one of the considerations in inventory carrying cost.

Deterministic models
Models where no uncertainty is included, e.g., inventory models without safety stock considerations.

The difference, usually the absolute difference, between a number and the mean of a set of numbers, or between a forecast value and the actual value.

Abbreviation for design for manufacture and assembly.

Diagnostic journey and remedial journey
A two-phase investigation used by teams to solve chronic quality problems. In the first phase—the diagnostic journey—the team journeys from the symptom of a chronic problem to its cause. In the second phase—the remedial journey—the team journeys from the cause to its remedy.

Diagnostic study
A brief investigation or cursory methods study of an operation, process, group, or individual to discover causes of operational difficulties or problems for which more detailed remedial studies may be feasible. An appropriate work measurement technique may be used to evaluate alternatives or to locate major areas requiring improvement.

Differentiated marketing
Marketing to different market segments with a different marketing strategy for each segment.

Differentiated oligopoly
A market in which a few companies produce partially differentiated products or services that are marketed within a given geographical area. Differentiation may be based on quality, features, styling, or services offered along with the product. See: industry structure types.

Digital cash or money
An electronic currency equivalent of currency or coins.

Direct costing
Syn: variable costing.

Direct costs
1) In traditional cost accounting, variable costs that can be directly attributed to a particular job or operation. Direct material and direct labor are traditionally considered direct costs. 2) In activity-based cost accounting, a cost that can specifically be traced and is economically feasible to track to a particular cost object, e.g., units produced, a production line, a department, or a manufacturing plant. In contrast, if the cost must be allocated across various cost objects, it is an indirect cost. Based on the cost object under consideration, the classification of direct and indirect can change. Activity-based cost accounting assumes that more costs traditionally viewed as fixed costs are variable and can be traced to cost objects.

Direct-deduct inventory transaction processing
A method of inventory bookkeeping that decreases the book (computer) inventory of an item as material is issued from stock, and increases the book inventory as material is received into stock by means of individual transactions processed for each item. The key concept here is that the book record is updated coincidentally with the movement of material out of or into stock. As a result, the book record is a representation of what is physically in stock. Syn: discrete issue.

Direct delivery
The consignment of goods directly from the supplier to the buyer, frequently used where a third party acts as intermediary between supplier and buyer.

Direct labor
Labor that is specifically applied to the good being manufactured or used in the performance of the service. Syn: touch labor.

Direct labor cost
The compensation of workers who are involved in converting material into a finished product.

Direct loading
Syn: cross-docking.

Direct marketing
Communicating directly with consumers in an effort to elicit a response or a transaction.

Direct material
Material that becomes a part of the final product in measurable quantities.

Direct materials cost
The acquisition cost of all materials used directly in the finished product.

Direct numerical control (DNC)
A system in which sets of numerical control machines are connected to a computer, allowing direct control of machines by the computer without use of external storage media.

Direct sales
Sales from the manufacturer to the ultimate consumer without going through a distributor or retailer.

Disassembly bill of material
In remanufacturing, a bill of material used as a guide for the inspection in the teardown and inspection process. On the basis of inspection, this bill is modified to a bill of repair defining the actual repair materials and work required. Syn: teardown bill of material. See: repair bill of material.

The physical issuance and reporting of the movement of raw material, components, or other items from a stores room or warehouse.

Disbursement list
Syn: picking list.

Disciplinary action
An action taken to enforce compliance with organizational rules and policies.

Discontinuous demand
A demand pattern that is characterized by large demands interrupted by periods with no demand, as opposed to a continuous or steady (e.g., daily) demand. Syn: lumpy demand.

An allowance or deduction granted by the seller to the buyer, usually when the buyer meets certain stipulated conditions that reduce the price of the products purchased. A quantity discount is an allowance determined by the quantity or value of the purchase. A cash discount is an allowance extended to encourage payment of an invoice on or before a stated date. A trade discount is a deduction from an established price for goods or services made by the seller to those engaged in certain businesses. See: price break.

Discounted cash flow
A method of investment analysis in which future cash flows are converted, or discounted, to their value at the present time. The net present value of an item is estimated to be the sum of all discounted future cash flows.

Discount period
The time allowed a customer to receive a cash discount for timely payment of an invoice.

Discount rate
The rate of interest charged to commercial banks by a central banking authority.

Discrete available-to-promise
A calculation based on the available-to-promise figure in the master schedule. For the first period, the ATP is the sum of the beginning inventory plus the MPS quantity minus backlog for all periods until the item is master scheduled again. For all other periods, if a quantity has been scheduled for that time period then the ATP is this quantity minus all customer commitments for this and other periods until another quantity is scheduled in the MPS. For those periods where the quantity scheduled is zero, the ATP is zero (even if deliveries have been promised). The promised customer commitments are accumulated and shown in the period where the item was most recently scheduled. Syn: incremental available-to-promise. See: available-to-promise.

Discrete issue
Syn: direct-deduct inventory transaction processing.

Discrete manufacturing
The production of distinct items such as automobiles, appliances, or computers.

Discrete order picking
A method of picking orders in which the items on one order are picked before the next order is picked. See: batch picking, order picking, zone picking.

Discrete order quantity
An order quantity that represents an integer number of periods of demand. Most MRP systems employ discrete order quantities. See: fixed-period requirements, least total cost, least unit cost, lot-for-lot, part period balancing, period order quantity, Wagner-Whitin algorithm.

Discussion list
A group of people who have all signed up on a listserver to participate via e-mail in the discussion of a given topic.

The process of eliminating an intermediate stage or echelon in a supply chain. Total supply chain operating expense is reduced, total supply chain inventory is reduced, total cycle time is reduced, and profits increase among the remaining echelons. See: echelon.

Dispatch(ing) board
Syn: control board.

1) A production control person whose primary function is dispatching. 2) A transportation worker who sends out and tracks cars, buses, trucks, railcars, and other vehicles.

The selecting and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers.

Dispatching rule
The logic used to assign priorities to jobs at a work center.

Dispatch list
A listing of manufacturing orders in priority sequence. The dispatch list, which is usually communicated to the manufacturing floor via paper or electronic media, contains detailed information on priority, location, quantity, and the capacity requirements of the manufacturing order by operation. Dispatch lists are normally generated daily and oriented by work center. Syn: work center schedule.

The scattering of the observations of a frequency distribution around its average.

Disposable income
Personal income less personal taxes.

Distributed data processing (DDP)
A data processing organizational concept under which computer resources of a company are installed at more than one location with appropriate communication links. Processing is performed at the user’s location generally on a smaller computer and under the user’s control and scheduling, as opposed to processing for all users being done on a large, centralized computer system.

Distributed numerical control
An approach to automated machining in which each machine tool has its own dedicated microcomputer or computer numerical control (CNC). Each machine tool’s CNC is connected via a network with a minicomputer that handles distributed processing between the host mainframe computer and the CNC. This minicomputer handles part program transfers and machine status data collection. This approach is considered more advanced than direct numerical control, in which several machine tools are tied directly to a central computer.

Distributed systems
Computer systems in multiple locations throughout an organization, working in a cooperative fashion, with the system at each location primarily serving the needs of that location but also able to receive and supply information from other systems within a network.

1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Syn: physical distribution. 2) The systematic division of a whole into discrete parts having distinctive ­characteristics.

Distribution by value
Syn: ABC classification.

Distribution center
A warehouse with finished goods and/or service items. A company, for example, might have a manufacturing facility in Philadelphia and distribution centers in Atlanta, Dallas, Los Angeles, San Francisco, and Chicago. Distribution center is synonymous with the term branch warehouse, although the former has become more commonly used recently. When a warehouse serves a group of satellite warehouses, it is usually called a regional distribution center. Syn: branch warehouse, field warehouse.

Distribution channel
The distribution route, from raw materials through consumption, along which products travel. See: channels of distribution, marketing channel.

Distribution cost
Those items of cost related to the activities associated with the movement and storage of finished products. Distribution costs can include inventory costs, transportation costs, and order processing costs.

Distribution curve
A graphic display of numerous data points showing the mean and frequency of occurrences of observations on a chart. See: normal distribution curve.

Distribution inventory
Inventory, usually spare parts and finished goods, located in the distribution system (e.g., in warehouses and in-transit between warehouses and the consumer).

Distribution network structure
The planned channels of inventory disbursement from one or more sources to field warehouses and ultimately to the customer. There may be one or more levels in the disbursement system. Syn: bill of distribution.

Distribution of forecast errors
Tabulation of the forecast errors according to the frequency of occurrence of each error value. The errors in forecasting are, in many cases, normally distributed even when the observed data do not come from a normal distribution.

Distribution planner
A person who plans inventories and schedules replenishment shipments for the distribution centers.

Distribution planning
The planning activities associated with transportation, warehousing, inventory levels, materials handling, order administration, site and location planning, industrial packaging, data processing, and communications networks to support distribution.

Distribution requirements planning (DRP)
1) The function of determining the need to replenish inventory at branch warehouses. A time-phased order point approach is used where the planned orders at the branch warehouse level are “exploded” via MRP logic to become gross requirements on the supplying source. In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (master warehouse, factory warehouse, etc.) and become input to the master production schedule. Demand on the supplying sources is recognized as dependent, and standard MRP logic applies. 2) More generally, replenishment inventory calculations, which may be based on other planning approaches such as period order quantities or “replace exactly what was used,” rather than being limited to the time-phased order point approach.

Distribution resource planning (DRP II)
The extension of distribution requirements planning into the planning of the key resources contained in a distribution system: warehouse space, workforce, money, trucks, freight cars, etc.

Distribution system
A group of interrelated facilities—manufacturing and one or more levels of warehousing—linking the production, storage, and consumption activities for spare parts and finished goods inventory. See: pipeline stock.

A business that does not manufacture its own products, but purchases and resells these products. Such a business usually maintains a finished goods inventory. Syn: wholesaler.

Divergent point
In the theory of constraints, a control point in the logical product structure where a common part or assembly can be directed to two or more different end items. To maintain the flow of parts to products, the schedule of common parts must be synchronized with the constraint schedule and shipping commitments.

Diversification strategy
An expansion of the scope of the product line to exploit new markets. A key objective of a diversification strategy is to spread the company’s risk over several product lines in case there should be a downturn in any one product’s market.

A payment to stockholders either in cash or stock.

Dividend yield
The ratio of dividends per share over stock price.

Acronym for design-measure-analyze-improve-control.

Abbreviation for direct numerical control.

Abbreviation for domain name service.

Dock receipt
A receipt recorded for a shipment received or delivered at a pier or dock.

A program by which specific quality and packaging requirements are met before the product is released. Prequalified product is shipped directly into the customer’s inventory. Dock-to-stock eliminates the costly handling of components, specifically in receiving and inspection and enables product to move directly into production.

Dock-to-stock inventory
A supplier-customer relationship where specified quality and packaging requirements are met before the product is released. The product is then received directly into the customer’s inventories. See: point-of-use inventory, stockless purchasing.

Abbreviation for design of experiments.

A slang term used to refer to a low-growth, low-market-share product. See: growth share matrix.

Domain name
The unique name that identifies an Internet site. Domain names always have two or more parts separated by dots. The part on the left is the most specific and the part on the right is the most general. A given machine may have more than one domain name but a given domain name points to only one machine.

Domain name service (DNS)
A service that records and tracks all Internet addresses.

Domestic corporation
A company incorporated in a particular state or country.

Double-declining-balance depreciation
A type of accelerated depreciation. See: depreciation.

Double order point system
A distribution inventory management system that has two order points. The smallest equals the original order point, which covers demand during replenishment lead time. The second order point is the sum of the first order point plus normal usage during manufacturing lead time. It enables warehouses to forewarn manufacturing of future replenishment orders.

Double smoothing
Syn: second-order smoothing.

The substitution of a product of lower quality, value, or status for another either in planning or in fact.

The process of transferring data or programs from one computer to another (and usually saving to a disk).

Used as a relative reference within a firm or supply chain to indicate moving in the direction of the end customer.

Downstream operation
The tasks subsequent to the task currently being planned or executed.

Time when a resource is scheduled for operation but is not producing for reasons such as maintenance, repair, or setup.

A refund of customs duties paid on material imported and later exported.

1) In activity-based cost accounting, an operation that influences the quantity of work required and cost of an activity. Syn: cost driver. 2) In the theory of constraints, an underlying cause that is responsible for several observed effects.

Drop ship
To take the title of the product but not actually handle, stock, or deliver it, e.g., to have one supplier ship directly to another or to have a supplier ship directly to the buyer’s customer.

Abbreviation for distribution requirements planning.

Abbreviation for distribution resource planning.

In the theory of constraints, the constraint is viewed as a drum, and nonconstraints are like soldiers in an army who march in unison to the drumbeat; the resources in a plant should perform in unison with the drumbeat set by the constraint.

Drum-buffer-rope (DBR)
In the theory of constraints, the generalized process used to manage resources to maximize throughput. The drum is the rate or pace of production set by the system’s constraint. The buffers establish the protection against uncertainty so that the system can maximize throughput. The rope is a communication process from the constraint to the gating operation that checks or limits material released into the system to support the constraint. See: finite scheduling, synchronized production.

Drum schedule
In the theory of constraints, the detailed master production schedule for the plant that sets the pace for the entire system. The drum must reconcile the customer requirements with the system’s constraints.

Abbreviation for decision support system.

Abbreviation for demand time fence.

Dual-card kanban system
Syn: two-card kanban system.

Due date
The date when purchased material or production material is due to be available for use. Syn: expected receipt date. See: arrival date.

Due date rule
A dispatching rule that directs the sequencing of jobs by the earliest due date.

Due process clause
Parts of the Fifth Amendment and Fourteenth Amendment to the U.S. Constitution guaranteeing citizens fundamental fairness in dealing with their government.

Dummy activity
In activity-on-arrow diagramming, an activity with zero duration used to express a precedence relationship that can’t otherwise be diagrammed. It is shown graphically with a dashed arrow.

Selling goods below costs in selected markets.

The packing material used to protect a product from damage during transport.

Durable goods
Generally, any goods whose continuous serviceability is likely to exceed three years (e.g., trucks, furniture).

In project management, the length of time an activity is estimated to require.

A tax levied by a government on the importation, exportation, or use and consumption of goods.

Duty-free zone
An area where merchandise is brought into the country for further work to be done. Duty is paid only on the items brought in, normally at a lower rate than finished goods, and paid only at the time of sale.

Dynamic congruence
In simulation, the situation where a physical system and a simulation model mimic one another closely.

Dynamic lot sizing
Any lot-sizing technique that creates an order quantity subject to continuous recomputation. See: least total cost, least unit cost, part period balancing, period order quantity, Wagner-Whitin algorithm.

Dynamic programming
A method of sequential decision making in which the result of the decision at each stage affords the best possible means to exploit the expected range of likely (yet unpredictable) outcomes in the following decision-making stages.


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