APICS CPIM Exam 1 Study Guide
ABC classification - ANS Process of classifying items in descending order based on
annual dollar volume or some other criteria. The list is then split into 3 classes - A, B,
and C. A represents 10-20% of items but 50-70% of dollar volume; B represents 20% of
items and 20% of dollar volume; C represents 60-70% of items but 10-30% of dollar
volume. This principle states that effort and money can be saved by applying looser
controls to the low dollar volume items (C class) than the higher dollar volume items (A
& B classes) and applies to inventory, purchasing, sales, etc.
Advance ship notice (ASN) - ANS Electronic data interchange (EDI) notification of
shipment of goods
Andon - ANS Electronic board that provides visibility of floor status and gives info to
help coordinate efforts linked to work centers; green light = running, red light = stop,
yellow light = needs attention
Anticipation inventories - ANS Any additional inventory above basic pipeline stock
to cover projected trends of increased sales, planned promo programs, seasonal
fluctuation, plant shutdowns, and vacations
Assemble-2-order - ANS Production environment where a good or service can be
assembled after receipt of a customer's order. The key components (or ingredients)
used in assembly or finishing process are planned and stocked in anticipation of a
customer order. Receipt of order initiates assembly of the customized product. Useful
strategy when a large number of end products can be assembled from common
components
Available inventory - ANS On-hand inventory balance minus allocations,
reservations, backorders, and quantities held for quality problems
Backflush - ANS Method of inventory bookkeeping where the book inventory is
automatically reduced after completion of activity on component's upper-level parent
item based on what should have been used as specified on the BOM and allocation
records; disadvantage is difference between book inventory and physical OH inventory
Backhauling - ANS Process of transportation returning from original destination
point to point of origin; can be full, partial, or empty load
Backlog - ANS All customer orders received but not yet shipped (open orders or
order board)
Backorder - ANS Unfulfilled customer order or commitment. An immediate (or past
due) demand against an item whose inventory is insufficient to satisfy the demand
