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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 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.
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 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 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.
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.