Direct production refers to the process where a firm has primary responsibility for the production of a particular item, making it the main producer.
Inventory planning is the process of determining the quantity and timing of inventory needed to meet production or sales requirements. Effective inventory planning is crucial for reducing costs and increasing productivity by ensuring that inventory levels are optimized to meet demand without incurring unnecessary expenses.
A job shop is a business model that focuses on producing customized products to specific orders, rather than mass production based on anticipated demand.
A technique that takes into account the reduction in time taken to carry out production as the cumulative output rises.
Material control is the management term referring to the process of ensuring that the necessary materials for production are available at the required place, time, and quantity while maintaining proper accountability and avoiding overstocking.
Materials Management is the administration of all activities concerned with the ordering, storage, and movement of materials, with a focus on optimizing the storage of raw materials, parts, and the manning of production operation centers.
Maximum capacity refers to the highest amount or output that a system, facility, company, or equipment can handle under specified conditions without having to violate specific regulations or operational constraints.
Normal capacity is a measure of production that reflects the average level of operating activity needed to meet production demands over a long period. It considers both seasonal fluctuations and normal occurrences of idle time.
The principal budget factor, also known as the limiting factor or constraint, refers to the element or resource that imposes a limitation on the organization’s budgeting process and overall production capabilities.
A section of an organization in which production is carried out, focusing on transforming raw materials into finished goods through various processes and workflows.
Unintended or unplanned investment refers to a buildup in inventory when sales are less than anticipated. This situation forces a company to invest in the excess inventory until sales catch up, during which production may be reduced or halted.
