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Fabrication
Manufacturing operations for making components, as opposed to assembly operations.

Fabrication Level
The lowest production level. The only components at this level are parts (as opposed to assemblies or subassemblies). These parts are either procured from outside sources or fabricated within the manufacturing organization.

Fabrication order
A manufacturing order to a component-making department authorizing it to produce component parts. See: batch card, manufacturing order.

Fabricator
A manufacturer that turns the product of a converter into a larger variety of products. For example, a fabricator may turn steel rods into nuts, bolts, and twist drills, or may turn paper into bags and boxes.

Facilities
The physical plant, distribution centers, service centers, offices, laboratories, and related equipment.

Factory within a factory
A technique to improve management focus and overall productivity by creating autonomous business units within a larger physical plant. Syn: plant within a plant.

Failsafe techniques
Syn: failsafe work methods, poka-yoke.

Failsafe work methods
Methods of performing operations so that actions that are incorrect cannot be completed. For example, a part without holes in the proper place cannot be removed from a jig, or a computer system will reject invalid numbers or require double entry of transaction quantities outside the normal range. Called poka-yoke by the Japanese. Syn: failsafe techniques, mistake-proofing, poka-yoke.

Failure analysis
The collection, examination, review, and classification of failures to determine trends and to identify poorly performing parts or components.

Failure mode analysis (FMA)
A procedure to determine which malfunction symptoms appear immediately before or after a failure of a critical parameter in a system. After all the possible causes are listed for each symptom, the product is designed to eliminate the problems.

Failure mode effects analysis (FMEA)
A procedure in which each potential failure mode in every sub-item of an item is analyzed to determine its effect on other sub-items and on the required function of the item.

Failure mode effects and criticality analysis (FMECA)
A procedure that is performed after a failure mode effects analysis to classify each potential failure effect according to its severity and probability of occurrence.

Fair Labor Standards Act (FLSA)
Federal law that governs the definitions of management and labor and establishes wage payment and hours worked and other employment practices.

Fair-share quantity logic
The process of equitably allocating available stock among field distribution centers. Fair-share quantity logic is normally used when stock available from a central inventory location is less than the cumulative requirements of the field stocking locations. The use of fair-share quantity logic involves procedures that “push” stock out to the field, instead of allowing the field to “pull” in what is needed. The objective is to maximize customer service from the limited available inventory. See: equal runout quantities.

Family
A group of end items whose similarity of design and manufacture facilitates their being planned in aggregate, whose sales performance is monitored together, and, occasionally, whose cost is aggregated at this level.

Family contracts
A purchase order that groups families of similar parts together to obtain pricing advantages and a continuous supply of material.

FAQs
Abbreviation for frequently asked questions.

FAR
Acronym for Federal Acquisition Regulation.

FAS
1) Abbreviation for final assembly schedule. 2) Abbreviation for free alongside ship.

Fault isolation
A technique used to identify the cause of a defect.

Fault tolerance
The ability of a system to avoid or minimize the disruptive effects of defects by using some form of redundancy or extra design margins.

Fault tree analysis
A logical approach to identify the probabilities and frequencies of events in a system that are most critical to uninterrupted and safe operation. This analysis may include failure mode effects analysis (determining the result of component failure interactions toward system safety) and techniques for human error prediction.

Feasibility study
An analysis designed to establish the practicality and cost justification of a given project and, if it appears to be advisable to do so, to determine the direction of subsequent project efforts.

Feature
A distinctive characteristic of a good or service. The characteristic is provided by an option, accessory, or attachment. For example, in ordering a new car, the customer must specify an engine type and size (option), but need not necessarily select an air conditioner (attachment). See: accessory, attachment, option.

Feature code
An identifying code assigned to a distinct product feature that may contain one or more specific part number configurations.

Federal Acquisition Regulation (FAR)
The primary regulation governing all federal agencies (U.S.) acquiring supplies and services.

Federal Trade Commission (FTC)
The United States governmental agency charged with protecting businesses and consumers from unfair business practices. It also regulates advertising and promotion at the national level.

Fee
The charge for the use of the contractor’s organization for the period and to the extent specified in the contract.

Feedback
The flow of information back into the control system so that actual performance can be compared with planned performance.

Feedback loop
The part of a closed-loop system that allows the comparison of response with command.

Feeder workstations
An area of manufacture whose products feed a subsequent work area.

Feedstock
The primary raw material in a chemical or refining process normally received by pipeline or large-scale bulk shipments. Feedstock availability is frequently the controlling factor in setting the production schedule and rate for a process.

Fiduciary
One having the duty to act on another’s behalf in a trustworthy and confidential fashion.

Field
A specified area of a record used for a particular category of data.

Field service
The functions of installing and maintaining a product for a customer after the sale or during the lease. Field service may also include training and implementation assistance. Syn: after-sale service.

Field warehouse
Syn: distribution center.

FIFO
Acronym for first in, first out.

File
An organized collection of records.

File structure
The manner in which records are stored within a file, e.g., sequential, random, or index-sequential.

File transfer protocol (FTP)
A protocol used to transfer files over the Internet.

Fill Rate
Syn: customer service ratio.

Final assembly
The highest level assembled product, as it is shipped to customers.

Final assembly department
The name for the manufacturing department where the product is assembled. See: blending department, pack-out department.

Final assembly schedule (FAS)
A schedule of end items to finish the product for specific customers’ orders in a make-to-order or assemble-to-order environment. It is also referred to as the finishing schedule because it may involve operations other than just the final assembly; also, it may not involve assembly, but simply final mixing, cutting, packaging, etc. The FAS is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked (or master scheduled) to the end-item level.

Financial accounting
The use of generally accepted accounting principles to prepare reports to external agencies, such as investors and governmental agencies.

Financial forecasting
Estimating a firm’s future financial statements.

Financial leverage management ratios
A set of measurements of the degree to which a firm is financing assets with fixed-charge instruments such as debt or preferred stock.

Financial management
The function concerned with ensuring the availability of funds for research and development, operations, and marketing.

finished good
Syn: end item.

Finished goods inventory
Those items on which all manufacturing operations, including final test, have been completed. These products are available for shipment to the customer as either end items or repair parts. Syn: finished products inventory. See: goods.

Finished good waivers
Approvals for deviation from normal product specifications.

Finished product
Syn: end item.

Finished products inventory
Syn: finished goods inventory.

Finishing lead time
1) The time that is necessary to finish manufacturing a good after receipt of a customer order. 2) The time allowed for completing the good based on the final assembly schedule.

Finish-to-finish
In project management, a network requirement that activity A must be finished before subsequent activity B can finish. See: logical relationship.

Finish-to-order
Syn: assemble-to-order.

Finish-to-start
In project management, a network requirement that activity A must be finished before activity B can start. See: logical relationship.

Finite forward scheduling
An equipment scheduling technique that builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits. A Gantt chart may be used with this technique. See: finite loading.

Finite loading
Assigning no more work to a work center than the work center can be expected to execute in a given time period. The specific term usually refers to a computer technique that involves calculating shop priority revisions in order to level load operation by operation. Syn: finite scheduling. See: drum-buffer-rope.

Finite Scheduling
Syn: finite loading.

Firewall
A device used to control access to a company’s data from the Internet or other outside sources.

Firm fixed-price contract
A contract in which the seller is paid a set price without regard to costs. Syn: fixed-price contract.

Firm offer
A written offer to buy or sell goods that will be held open for a stipulated period.

Firm planned order (FPO)
A planned order that can be frozen in quantity and time. The computer is not allowed to change it automatically; this is the responsibility of the planner in charge of the item that is being planned. This technique can aid planners working with MRP systems to respond to material and capacity problems by firming up selected planned orders. In addition, firm planned orders are the normal method of stating the master production schedule. See: planning time fence.

First-article inspection
A quality check on the first component run after a new setup has been completed. Syn: first-piece inspection.

First-come-first-served rule
A dispatching rule under which the jobs are sequenced by their arrival times. See: first-in, first-out.

First in, first out (FIFO)
A method of inventory valuation for accounting purposes. The accounting assumption is that the oldest inventory (first in) is the first to be used (first out), but there is no necessary relationship with the actual physical movement of specific items. See: first-come-first-served rule, average cost system.

First-order smoothing
A single exponential smoothing; a weighted moving average approach that is applied to forecasting problems where the data do not exhibit significant trend or seasonal patterns. Syn: single exponential smoothing, single smoothing.

First-piece inspection
Syn: first-article inspection.

Fishbone analysis
A technique to organize the elements of a problem or situation to aid in the determination of the causes of the problem or situation. The analysis relates the effect of the environment to the several possible sources of the problem.

Fishbone chart
Syn: cause-and-effect diagram.

Fitness for use
A term used to indicate that a good or service fits the customer’s defined purpose for that good or service.

Five focusing steps
In the theory of constraints, a process to continuously improve organizational profit by evaluating the production system and market mix to determine how to make the most profit using the system constraint. The steps consist of (1) identifying the constraint to the system, (2) deciding how to exploit the constraint to the system, (3) subordinating all nonconstraints to the constraint, (4) elevating the constraint to the system, (5) returning to step 1 if the constraint is broken in any previous step, while not allowing inertia to set in.

Five Ss
Five terms beginning with “S” used to create a workplace suitable for lean production. Sort means to separate needed items from unneeded ones and remove the latter. Simplify means to neatly arrange items for use. Scrub means clean up the work area. Standardize means to sort, simplify and scrub daily. Sustain means to always follow the first four Ss. Sometimes referred to by the Japanese equivalents: seiri, seiton, seiso, seiketsu, and shitsuke.

Five why’s
The common practice in TQM is to ask “why” five times when confronted with a problem. By the time the answer to the fifth “why” is found, the ultimate cause of the problem is identified. Syn: five W’s. See: root cause analysis.

Five W’s
Syn: five why’s.

Fixed assets
Assets acquired for use within a company having an estimated useful life of one year or more.

Fixed-asset turnover
Sales divided by net fixed assets. Fixed assets reflect asset acquisition price less depreciation.

Fixed budget
A budget of expected costs based on a specific level of production or other activity.

Fixed cost
An expenditure that does not vary with the production volume; for example, rent, property tax, and salaries of certain personnel.

Fixed-cost contribution per unit
An allocation process where total fixed cost for a period is divided by total units produced in that given time period.

Fixed-interval order system
Syn: fixed reorder cycle inventory model.

Fixed-interval review system
A hybrid inventory system in which the inventory analyst reviews the inventory position at fixed time periods. If the inventory level is found to be above a preset reorder point, no action is taken. If the inventory level is at or below the reorder point, the analyst orders a variable quantity equal to M – x where M is a maximum stock level and x is the current quantity on hand and on order (if any). This hybrid system does not reorder every review interval. It therefore differs from the fixed-interval order system, which automatically places an order whenever inventory is reviewed.

Fixed-location storage
A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location storage system, fixed locations become familiar, and therefore a locator file may not be needed. See: random-location storage.

Fixed order quantity
A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof, if net requirements for the period exceed the fixed order quantity.

Fixed order quantity system
Syn: fixed reorder quantity inventory model.

Fixed overhead
Traditionally, all manufacturing costs, other than direct labor and direct materials, that continue even if products are not produced. Although fixed overhead is necessary to produce the product, it cannot be directly traced to the final product.

Fixed-period quantity
An MRP lot-sizing technique that sets the lot size equal to the net requirements for a given number of periods.

Fixed-period requirements
A lot-sizing technique that sets the order quantity to the demand for a given number of periods. See: discrete order quantity.

Fixed-position layout
In the fixed-position layout, the position of the product is fixed. Materials, equipment, and workers are transported to and from the product or customer. Fixed-position layouts are used in industries where the products are very bulky, massive, or heavy, and movement is problematic.

Fixed-price contract
Syn: firm fixed-price contract.

Fixed-price-incentive-fee contract
A contract in which the seller is paid a set price and can earn an additional profit if certain stipulations are met.

Fixed property
Property attached to, and not easily removed from, the location.

Fixed reorder cycle inventory model
A form of independent demand management model in which an order is placed every n time units. The order quantity is variable and essentially replaces the items consumed during the current time period. Let M be the maximum inventory desired at any time, and let x be the quantity on hand at the time the order is placed. Then, in the simplest model, the order quantity will be M – x. The quantity M must be large enough to cover the maximum expected demand during the lead time plus a review interval. The order quantity model becomes more complicated whenever the replenishment lead time exceeds the review interval, because outstanding orders then have to be factored into the equation. These reorder systems are sometimes called fixed-interval order systems, order level systems, or periodic review systems. Syn: fixed-interval order system, fixed- order quantity system, order level system, periodic review system, time-based order system. See: fixed reorder quantity inventory model, hybrid inventory system, independent demand item management models, optional replenishment model.

Fixed reorder quantity inventory model
A form of independent demand item management model in which an order for a fixed quantity, Q, is placed whenever stock on hand plus on order reaches a predetermined reorder level, R. The fixed order quantity Q may be determined by the economic order quantity, by a fixed order quantity (such as a carton or a truckload), or by another model yielding a fixed result. The reorder point, R, may be deterministic or stochastic, and in either instance is large enough to cover the maximum expected demand during the replenishment lead time. Fixed reorder quantity models assume the existence of some form of a perpetual inventory record or some form of physical tracking, e.g., a two-bin system that is able to determine when the reorder point is reached. These reorder systems are sometimes called fixed order quantity systems, lot-size systems, or order point-order quantity systems. Syn: fixed order quantity system, lot-size system, order point-order quantity system, quantity-based order system. See: fixed reorder cycle inventory model, hybrid inventory system, independent demand item management models, optional replenishment model, order point, order point system, statistical inventory control, time-phased order point.

Fixture
A device to hold and locate a work piece during inspection or production operations. See: jig.

Flexibility
1) The ability of the manufacturing system to respond quickly, in terms of range and time, to external or internal changes. Six different categories of flexibility can be considered: mix flexibility, design changeover flexibility, modification flexibility, volume flexibility, rerouting flexibility, and material flexibility (see each term for a more detailed discussion). In addition, flexibility involves concerns of product flexibility. Flexibility can be useful in coping with various types of uncertainty (regarding mix, volume, and so on). 2) The ability of a supply chain to mitigate, or neutralize, the risks of demand forecast variability, supply continuity variability, cycle time plus lead-time uncertainty, and transit time plus customs-clearance time uncertainty during periods of increasing or diminishing volume.

Flexibility responsiveness
The ability of the firm and its management to change rapidly in response to changes taking place in the marketplace.

Flexible automation
Automation that provides short setup times and the ability to switch quickly from one product to another.

Flexible benefits/cafeteria plans
Plans designed to give employees a core of minimum basic coverage with the option to choose additional coverage or, sometimes, cash. Employees can customize their benefits packages to suit their personal needs.

Flexible budget
A budget showing the costs and revenues expected to be incurred or realized over a period of time at different levels of activity, measured in terms of some activity base such as direct labor hours, direct labor costs, or machine hours. A flexible manufacturing overhead budget gives the product costs of various manufacturing overhead items at different levels of activity. See: step budget.

Flexible capability
Machinery’s ability to be readily adapted to processing different components on an ongoing basis.

Flexible capacity
The ability to operate manufacturing equipment at different production rates by varying staffing levels and operating hours or starting and stopping at will.

Flexible machine center (FMC)
An automated system, which usually consists of CNC machines with robots loading and unloading parts conveyed into and through the system. Its purpose is to provide quicker throughput, changeovers, setups, etc., to manufacture multiple products.

Flexible manufacturing system (FMS)
A group of numerically controlled machine tools interconnected by a central control system. The various machining cells are interconnected via loading and unloading stations by an automated transport system. Operational flexibility is enhanced by the ability to execute all manufacturing tasks on numerous product designs in small quantities and with faster delivery.

Flexible workforce
A workforce whose members are cross-trained and whose work rules permit assignment of individual workers to different tasks.

Flextime
An arrangement in which employees are allowed to choose work hours as long as the standard number of work hours is worked.

Float
1)The amount of work-in-process inventory between two manufacturing operations, especially in repetitive manufacturing. 2) In supply chains, the time necessary for items such as documents and checks to go from one supply chain partner to another. 3) In the critical path method of project management, the amount of time that an activity’s early start or early finish time can be delayed without delaying the completion time of the entire project. There are three types: total float, free float, and independent float. Syn: path float, slack.

Floating inventory location system
Syn: random-location storage.

Floating order point
An order point that is responsive to changes in demand or to changes in lead time.

Floating storage location
Syn: random-location storage.

Floor-ready merchandise
Products shipped by a supplier having all needed tags, prices, security devices, and so on already in place.

Floor stocks
Stocks of inexpensive production parts held in the factory, from which production workers can draw without requisitions. Syn: bench stocks, expensed stocks.

Flowchart
The output of a flowcharting process, a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. Flowcharts are drawn to better understand processes. The flowchart is one of the seven tools of quality. See: block diagram, flow process chart.

Flowcharting
A systems analysis tool that graphically presents a procedure. Symbols are used to represent operations, transportations, inspections, storages, delays, and equipment.

Flow control
A specific production control system that is based primarily on setting production rates and feeding work into production to meet these planned rates, then monitoring and controlling production. See: shop floor control.

Flow line
Syn: flow shop.

Flow manufacturing
Syn: flow shop.

Flow order
An order filled, not by moving material through production as an integral lot, but by production made over time and checked by a cumulative count until the flow order quantity is complete.

Flow plant
Syn: flow shop.

Flow process chart
A graphic, symbolic representation of the work performed or to be performed on a product as it passes through some or all of the stages of a process. Typically, the information included in the chart is quantity, distance moved, type of work done (by symbol with explanation), and equipment used. Work times may also be included. Flow process chart symbols (ASME Standard Symbols) generally used are as follows:

Flow Rate
Running rate; the inverse of cycle time; for example, 360 units per shift (or 0.75 units per minute).

Flow shop
A form of manufacturing organization in which machines and operators handle a standard, usually uninterrupted, material flow. The operators generally perform the same operations for each production run. A flow shop is often referred to as a mass production shop or is said to have a continuous manufacturing layout. The plant layout (arrangement of machines, benches, assembly lines, etc.) is designed to facilitate a product “flow.” Some process industries (chemicals, oil, paint, etc.) are extreme examples of flow shops. Each product, though variable in material specifications, uses the same flow pattern through the shop. Production is set at a given rate, and the products are generally manufactured in bulk. Syn: flow line, flow manufacturing, flow plant.

FLSA
Abbreviation for Fair Labor Standards Act.

Fluctuation inventory
Inventory that is carried as a cushion to protect against forecast error. Syn: fluctuation stock. See: inventory buffer.

Fluctuation stock
Syn: fluctuation inventory.

FMA
Abbreviation for failure mode analysis.

FMAPE
Abbreviation for forecast mean absolute percentage of error.

FMC
Abbreviation for flexible machine center.

FMEA
Abbreviation for failure mode effects analysis.

FMECA
Abbreviation for failure mode effects and criticality analysis.

FMS
Abbreviation for flexible manufacturing system.

FOB
Abbreviation for free on board.

Focused factory
A plant established to focus the entire manufacturing system on a limited, concise, manageable set of products, technologies, volumes, and markets precisely defined by the company’s competitive strategy, technology, and economics. See: cellular manufacturing.

Focus forecasting
A system that allows the user to simulate the effectiveness of numerous forecasting techniques, enabling selection of the most effective one.

Focus group
A set of people who are interviewed together for the purpose of collecting marketing data.

Focus-group research
A form of research (frequently used in marketing research) where data are gathered by interviewing consumers in groups of 6 to 10 at a time (the focus group). See: marketing research.

Follow-up
Monitoring of job progress to see that operations are performed on schedule or that purchased material or products will be received on schedule.

Force field analysis
A technique for analyzing the forces that will aid or hinder an organization in reaching an objective. An arrow pointing to an objective is drawn down the middle of a piece of paper. The factors that will aid the objective’s achievement (called the driving forces) are listed on the left side of the arrow; the factors that will hinder its achievement (called the restraining forces) are listed on the right side of the arrow.

Forecast
An estimate of future demand. A forecast can be constructed using quantitative methods, qualitative methods, or a combination of methods, and it can be based on extrinsic (external) or intrinsic (internal) factors. Various forecasting techniques attempt to predict one or more of the four components of demand: cyclical, random, seasonal, and trend. Syn: sales forecast. See: Box-Jenkins model, exponential smoothing forecast, extrinsic forecasting method, intrinsic forecasting method, moving average forecast, qualitative forecasting method, quantitative forecasting method.

Forecast accuracy
A measurement of forecast usefulness, often defined as the average difference between the forecast value to the actual value. Syn: sales forecast. See forecast error.

Forecast bias
Tendency of a forecast to systematically miss the actual demand (consistently either high or low).

Forecast consumption
Syn: consuming the forecast.

Forecast Error
The difference between actual demand and forecast demand, stated as an absolute value or as a percentage. See: average forecast error, forecast accuracy, mean absolute deviation, tracking signal.

Forecast horizon
The period of time into the future for which a forecast is prepared.

Forecasting
The business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance.

Forecast interval
The time unit for which forecasts are prepared, such as week, month, or quarter. Syn: forecast period.

Forecast management
The process of making, checking, correcting, and using forecasts. It also includes determination of the forecast horizon.

Forecast mean absolute percentage of error (FMAPE)
The absolute error divided by actual demand for “n” periods. Where absolute error is the variation between the actual demand and the forecast for the period expressed as a positive value (without regard for sign).

Forecast period
Syn: forecast interval.

Foreign trade zone (FTZ)
An area within a country that is treated as foreign territory by the U.S. Customs Service. Goods can be landed, stored, and processed within an FTZ without incurring any import duties or domestic taxes.

Formal culture
The visible segment of the organizational culture, such as policies and procedures, mission statement, and dress codes. See: informal culture.

Format
The predetermined arrangement of the characters of data for computer input, storage, or output.

Form-fit-function
A term used to describe the process of designing a part or product to meet or exceed the performance requirements expected by customers.

Formula
A statement of ingredient requirements. A formula may also include processing instructions and ingredient sequencing directions. Syn: formulation, recipe.

Formulation
Syn: formula.

40/30/30 rule
A rule that identifies the sources of scrap, rework, and waste as 40% product design, 30% manufacturing processing, and 30% from suppliers.

Forward Buying
The practice of buying materials in a quantity exceeding current requirements but not beyond the point that the long-term need exists.

Forward flow scheduling
A procedure for building process train schedules that starts with the first stage and proceeds sequentially through the process structure until the last stage is scheduled.

Forward integration
Process of buying or owning elements of the production cycle and the channel of distribution forward toward the final customer. See: vertical integration.

Forward pass
In the critical path method of project management, working from the first node to the last node calculating early start times and early finish times as well as the project’s duration. See: forward scheduling, backward pass, critical path method.

Forward scheduling
A scheduling technique where the scheduler proceeds from a known start date and computes the completion date for an order, usually proceeding from the first operation to the last. Dates generated by this technique are generally the earliest start dates for operations. See: forward pass. Ant: back scheduling.

4GL
Abbreviation for fourth-generation language.

Fourier series
A form of analysis useful for forecasting. The model is based on fitting sine waves with increasing frequencies and phase angles to a time series.

Four P’s
A set of marketing tools to direct the business offering to the customer. The four P’s are product, price, place, and promotion.

14 Points
W. Edwards Deming’s 14 management practices to help companies increase their quality and productivity: (1) create constancy of purpose for improving products and services; (2) adopt the new philosophy; (3) cease dependence on inspection to achieve quality; (4) end the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier; (5) improve constantly and forever every process for planning, production, and service; (6) institute training on the job; (7) adopt and institute leadership; (8) drive out fear; (9) break down barriers between staff areas; (10) eliminate slogans, exhortations, and targets for the workforce; (11) eliminate numerical quotas for the workforce and numerical goals for management; (12) remove barriers that rob people of pride of workmanship and eliminate the annual rating or merit system; (13) institute a vigorous program of education and self-improvement for everyone; and (14) put everybody in the company to work to accomplish the transformation. Syn: Deming’s 14 Points.

Fourth-generation language (4GL)
A general term for a series of high-level nonprocedural languages that enable users or programmers to prototype and to code new systems. Nonprocedural languages use menus, question-and-answer combinations, and a simpler, English-like wording to design and implement systems, update databases, generate reports, create graphs, and answer inquiries.

Four-wall inventory
Syn: wall-to-wall inventory.

FPO
Abbreviation for firm planned order.

Franchise extension
The placement of a brand name on products outside the company’s present sphere of activity.

Free alongside ship (FAS)
A term of sale indicating the seller is liable for all changes and risks until the goods sold are delivered to the port on a dock that will be used by the vessel. Title passes to the buyer when the seller has secured a clean dock or ship’s receipt of goods.

Free float
In the critical path method of project management, the amount of time that a given activity can be delayed without delaying an immediately subsequent activity’s early start time. See: float, independent float, total float.

Free on board (FOB)
The terms of sale that identify where title passes to the buyer.

Free slack
The amount of time by which the completion of an activity in a project network can increase without delaying the start of the next activity.

Freight consolidation
The grouping of shipments to obtain reduced costs or improved utilization of the transportation function. Consolidation can occur by market area grouping, grouping according to scheduled deliveries, or using third-party pooling services such as public warehouses and freight forwarders.

Freight equalization
The practice by more distant suppliers of absorbing the additional freight charges to match the freight charges of a supplier geographically closer to the customer. This is done to eliminate the competitive advantage of lower freight charges that the nearest supplier has.

Frequency distribution
A table that indicates the frequency with which data fall into each of any number of subdivisions of the variable. The subdivisions are usually called classes.

Frequency of repair
Syn: repair factor.

Frequently asked questions (FAQs)
A list of commonly asked questions pertaining to a Web site (or perhaps software, hardware, and so on) along with the answers to these questions.

Fringe benefits
Employer-granted compensations that are not directly tied to salary.

FRT
Abbreviation for future reality tree.

FTC
Abbreviation for Federal Trade Commission.

FTP
Abbreviation for file transfer protocol.

FTZ
Abbreviation for foreign trade zone.

Full cost pricing
Establishing price at some markup over the full cost (absorption costing). Full costing includes direct manufacturing as well as applied overhead.

Full pegging
The ability of a system to automatically trace requirements for a given component all the way up to its ultimate end item, customer, or contract number. Syn: contract pegging.

Fully qualified domain name
The complete, registered address (URL) of an Internet site.

Functional layout
A facility configuration in which operations of a similar nature or function are grouped together; an organizational structure based on departmental specialty (e.g., saw, lathe, mill, heat treat, and press). Syn: job shop layout, process layout.

Functional manager
A manager responsible for a specialized department such as accounting or engineering.

Functional organizational structure
An organizational structure based on functional specialization, such as sales, engineering, manufacturing, finance, and accounting.

Functional requirements
Syn: critical characteristics.

Functional silo syndrome
Suboptimization of an organization’s goals due to members of specific functions developing more loyalty to the function’s group goals than to the organization’s goals.

Functional systems design
The development and definition of the business functions to be accomplished by a computer system—i.e., the work of preparing a statement of the data input, data manipulation, and information output of the proposed computer system in common business terms that can be reviewed, understood, and approved by a user organization. This statement, after approval, provides the basis for the computer systems design.

Functional test
Measure of a production component’s ability to work as designed to meet a level of performance.

Funds flow management
The planning, execution, and control of cash receipts and disbursements with the objective of maintaining the cash balance at a preset positive value. Syn: cash flow management.

Funds flow statement
A financial statement showing the flow of cash and its timing into and out of an organization or project. Syn: cash flow statement, statement of cash flows.

Funnel experiment
An experiment that demonstrates the effects of tampering. Marbles are dropped through a funnel in an attempt to hit a flat-surfaced target below. The experiment shows that adjusting a stable process to compensate for an undesirable result or an extraordinarily good result will produce output that is worse than if the process had been left alone. See: tampering.

Future order
An order entered for shipment at some future date.

Future Reality Tree (FRT)
In the theory of constraints, a logic-based tool for constructing and testing potential solutions before implementation. The objectives are to (1) develop, expand, and complete the solution and (2) identify and solve or prevent new problems created by implementing the solution.

Futures
Contracts for the sale and delivery of commodities at a future time, made with the intention that no commodity be delivered or received immediately.

Future value
A present payment’s value at some point in the future valued at a given interest rate.

Future worth
1) The equivalent monetary value at a designated future date based on the time value of money. 2) The monetary sum, at a given future time, that is equivalent to one or more sums at given earlier times when interest is compounded at a given rate. See: time value of money.

Fuzzy logic
A field of logic based on “fuzzy sets,” that is, sets in which membership is probabilistic rather than deterministic.

 

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