Average Inventory

The average inventory level over a period of time is implicit in this definition, which includes a 'sampling period' that represents the amount of time between inventory measurements.

Average Payment Period (for materials)

The average time from receipt of production-related materials to payment for those materials is known as the Cash-to-Cash Cycle Time. Production-related materials refer to items classified as material purchases and included in the Cost of Goods Sold (COGS) as raw material purchases.

Avoidable Cost

That part of the cost of any activity associated with an output that could be saved by not performing that activity. Award Fee is based on a subjective assessment by the Government on how well the contractor meets or exceeds performance standards.

B2B

Business-to-Business

B2C

Business-to-Consumer

Back-Charged

1) A payment credited to a company's account for not performing based on contract terms, and 2) An amount charged to a contractor for materials, equipment, services, or other charges that were paid by the owner and furnished to the contractor.

Backflush

A method used to relieve inventory and charge costs based on completed units, backflushing is an alternative to processing actual issue or labor transactions related to production. Typically, a bill of materials is used to determine the quantity required to build a product, and relief is based on the quantity required per time unit complete. It works well in environments where the time spent in WIP is short; otherwise, the delay in recording book on hand can cause problems with inventory control. Also, see Pre-deduct Inventory Transaction Processing.

Backhaul

The portion of a transport trip, typically associated with trucking, that is incurred when returning a vehicle to its point of origin, is called the deadhead. Ideally, the carrier will find some sort of freight to carry back. If the trip is empty, it is called a deadhead. Also, see Deadhead.

Backlog Customer

Customer orders received but not yet shipped, including backorders and future orders.

Backorder

1) The act of retaining a quantity to ship against an order when other order lines have already been shipped. Backorders are usually caused by stock shortages. 2) The quantity remaining to be shipped if an initial shipment(s) has been processed. Note: In some cases, backorders are not allowed. This results in a lost sale when sufficient quantities are not available to completely ship an order or order line. Also See Balance to Ship.

Back Order

Product ordered, but out of stock and promised to ship when the product becomes available.

Back Scheduling

A technique used for calculating activities based on a series of known activities, the time required to complete them, and the desired end date for completing the series.

Backsourcing

The process of recapturing and taking responsibility internally for processes that were previously outsourced to a contract manufacturer, fulfillment, or other service provider is called backsourcing. Backsourcing typically involves the cancellation or expiration of an outsourcing contract and can be nearly as complex as the original outsourcing process.

Balanced Operational Performance Goals

A strategic performance management tool used for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy. By focusing not only on financial outcomes but also on the operational, marketing, and developmental inputs to these, the Balanced Scorecard helps provide a more comprehensive view of a business, which, in turn, helps organizations act in their best long-term interests. Also, see Scorecard.

Balanced Scorecard

A strategic performance management tool used for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy. By focusing not only on financial outcomes but also on the operational, marketing, and developmental inputs to these, the Balanced Scorecard helps provide a more comprehensive view of a business, which, in turn, helps organizations act in their best long-term interests. Also, see Scorecard.

Balance of Trade

The surplus or deficit results from comparing a country's exports and imports of merchandise only.

Balance to Ship (BTS)

Balance or remaining quantity of a promotion or order that has yet to ship. Also, see Backorder.

BAM

A term which refers to capturing operational data in real-time or close to it, making it possible for an enterprise to react more quickly to events. This is typically done through software and includes features to provide alerts/notifications when specific events occur. See also: Supply Chain Event Management.

Bar Code

A symbol consisting of a series of printed bars represents values. It is a system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging.

Barcode scanner

A device to read barcodes and communicate data to computer systems.

Barge

The cargo-carrying vehicle used primarily by inland water carriers is the barge. The basic barges have open tops, but there are also covered barges available for both dry and liquid cargoes.

Barrier to Entry

Reasons that companies perceive will stop them from participating in a particular market include the cost of entry, significant competition, limited knowledge, etc.

Base Demand

The level of demand for a product is based on actual history and/or known customer contracts. Synonym: Baseload Demand.

Baseline

A baseline for comparison is set by monitoring the initial performance of a process. The baseline is used as a reference point to evaluate performance improvement efforts.

Base Stock System

An inventory system in which a replenishment order is issued each time a withdrawal is made, and the order quantity is equal to the amount of the withdrawal, is referred to as a par-stock system (bringing stock back to par level).

Basing-Point Pricing

A pricing system that includes transportation costs from a particular city or town in a zone or region, even though the shipment does not originate at the basing point.

Basis point (BPS)

A basis point is a unit that is equal to 1/100th of 1%, and it is often used instead of percentages when discussing interest rates, rates of return, and other percentage-based performance metrics that can occur as fractions of a percent. A 1% change equals 100 basis points, and 0.01% equals 1 basis point.

Batch Control Totals

The result of grouping transactions at the input stage and establishing control totals over them is to ensure proper processing. These control totals can be based on document counts, record counts, quantity totals, dollar totals, or hash (mixed data, such as customer AR numbers) totals.

Batch Number

A sequence number is associated with a specific batch or production run of products and is used for tracking purposes. It is synonymous with the term 'Lot Number.

Batch Picking

An order picking method where orders are grouped into small batches, an order picker will pick all orders within the batch in one pass. Batch picking is usually associated with pickers with multi-tiered picking carts moving up and down aisles, picking batches of usually 4 to 12 orders. However, batch picking is also very common when working with automated material handling equipment such as carousels. Also, see Discrete Order Picking, Order Picking, Zone Picking.

Batch Processing

A computer term which refers to the processing of computer information after it has been accumulated in one group, or batch. This is the opposite of 'real-time' processing, where transactions are processed in their entirety as they occur.

Batch Release

Orders are released to be fulfilled or picked at specific times during the course of a day. The accumulation of orders before release results in a batch. Please see 'Batch Picking' for more information.

Baud

A computer term describing the rate of transmission over a channel or circuit, the baud rate is equal to the number of pulses that can be transmitted in one second, often the same as the number of bits per second. Common rates are now 1200, 2400, 4800, 9600 bits, and 19.2 and 56 kilobytes (Kbps) for 'dial-up' circuits, and may be much higher for broadband circuits.

BCP

Business Continuity Plan

Beginning Available Balance

Also called net inventory, this is the quantity of stock that is available to use after considering allocations, reservations, backorders, and quantities set aside to compensate for quality problems. It is also known as net inventory. Synonyms include Available-to-Promise.

Belly Cargo

Air freight is carried in the belly of passenger aircraft.

Benchmark

A measured, 'best-in-class' achievement; a reference or measurement standard for comparison; this performance level is recognized as the standard of excellence for a specific business process. Any metric that is being used to compare actual performance against.

Benchmarking

The process of comparing performance against the practices of other leading companies for the purpose of improving performance is called benchmarking. Companies also benchmark internally by tracking and comparing current performance with past performance. Benchmarking seeks to improve any given business process by exploiting 'best practices' rather than merely measuring the best performance. Best practices are the cause of the best performance. Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage.

Benefit-cost ratio

An analytical tool used in public planning: a ratio of total measurable benefits divided by the initial capital cost.

Bespoke

An individual or custom-made product or service is traditionally applied to custom-tailored clothing. However, the term has been extended to information technology, especially for custom-designed software, as an alternative to commercial (COTS) software.

Best-in-Class

An organization, usually within a specific industry, is recognized for excellence in a specific process area.

Best Practice

A specific process or group of processes that has been recognized as the best method for conducting an action. Best practices may vary by industry or geography, depending on the environment being used. The best practices methodology may be applied with respect to resources, activities, cost objects, or processes.

Beta Release

A pre-released version of a product is sent to customers for evaluation and feedback.

BI

The set of skills, technologies, applications, and practices used to help a business acquire a better understanding of its commercial context in order to make better business decisions.

Bilateral Contract

An agreement in which each of the parties to the contract makes a promise or promises to the other party.

Bill of Activities

A listing of activities required by a product, service, process output, or other cost object. The bill of activity attributes could include the volume and/or cost of each activity in the listing.

Bill of lading (BOL)

Sometimes abbreviated as B/L, this transport agreement is issued by the carrier. It serves three essential functions: proof of transport, proof of receipt, and title of ownership.

Bill of Lading (BOL)

A transportation document that is the contract of carriage containing the terms and conditions between the shipper and the carrier.