Terms101

1. Sales

2. Inventory

3. Customer

4. Supplier

5. Items / Product

6. Reports, etc

Glossary of Inventory Management and Warehouse Operation Terms

All definitions written by Dave Piasecki

Below are some of the terms, acronyms, and abbreviations you may run into on this site and others on the web relating to inventory operations. The definitions are based on my understanding of the terms and may differ from others opinions. If you disagree with a definition or have additional definitions to submit please email me at email@inventoryops.com.

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2-way pallet

—See Pallet

3PL

—Third party logistics (see separate listing)

4-way pallet

—See Pallet

Activity based costing

—usually refers to costing method that breaks down overhead costs into specific activities (cost drivers) in order to more accurately distribute the costs in product costing. Has also been applied to customer and vendor management.

ABC stratification

—method used to categorize inventory into groups based upon certain activity characteristics. Examples of ABC stratifications would include ABC by velocity (times sold), ABC by sales dollars, ABC by quantity sold / consumed, ABC by average inventory investment, ABC by margin. ABC stratifications are used to develop inventory planning policies, set count frequencies for cycle counting, slot inventory for optimized order picking, and other inventory management activities.

Actual cost

—inventory costing method used in manufacturing environments that uses the actual materials costs, machine costs, and labor costs reported against a specific work order to calculate the cost of the finished item.

ADC

—Automated data collection. See Automated Data Collection

Advanced planning and scheduling

—software system designed to integrate with ERP and MRP systems to enhance the short term production planning and scheduling systems that are notoriously...