Knowledge Center

A B C D E F G H I J K L M N O P U V W Y
Capacity

Maximum throughput or capability of a process, machine or locality.

Capacity Requirement Planning – CRP

What is Capacity Planning (CRP)? Capacity Planning is pre-planning done by a company in which it figures out how much it needs to produce, and determines if it is potential enough to meet those production goals. Capacity Planning, also termed as Capacity Requirement Planning (CRP), also refers to the outlining the estimation for each process […]

Carrying Costs

Definition Carrying costs of inventory are all the expenses associated with holding inventory including maintenance, storage costs, warehouse costs, and scrap costs. Also called inventory costs, it is the cost incurred over a period of time by holding and storing inventory. This also includes insurance, opportunity costs, loss from theft and/or damage. An important profit […]

Composite Forecast

What is Composite Forecast? Composite Forecast is a combination of blended forecasting methods (such as times series, casual, and/or judgmental) for a particular brand, product category or product, from different forecast streams. Forecast carried out following composite forecasting technique is based on the same historical data, but uses a different method. You cant always rely […]

Configure to Order

Definition Configure to order is a manufacturing process where products are assembled and configured according to customer requirements. In today’s competitive market, consumers are demanding products that are tailored according to their own unique requirements. How does Configure to Order Work? The configure-to-order process is based on the concept of configure to order. This means […]

Consignment Inventory

A consignment inventory is a specific stock that is in the possession of the customer or seller (the consignee) but yet owned by the supplier (a vendor or wholesaler). Here, the supplier sets up an inventory for the seller which remains at the supplier’s warehouse only (only when the product is sold on an eCommerce […]

Cost of Capital

Accounting term used to describe annual Inventory holding costs

Cost of Goods Sold (COGS)

Cost of Goods Sold (COGS) is a direct cost of the production of the goods or products sold from an inventory. This amount includes the additional material charges as well which are used for the delivery and packaging of the goods. Methodically, COGS = Beginning Inventory + Purchases made during the period – Ending Inventory […]

Cumulative Lead Time

‘Lead Time’ is the amount of time between the initiation and completion of an operation or a process. So as the word ‘cumulative’ suggests, ‘Cumulative Lead Time’ is the longest length of time consumed to accomplish the activity in question. Let’s define cumulative lead time for order processing and manufacturing: Cumulative lead time for orders: […]

Cycle Count

Definition Cycle counting is an alternative method of auditing inventory and an important aspect of inventory management. While cycle counting, instead of doing a complete stocktake of the entire inventory in the warehouse, managers count smaller sections of inventory on a specific day. The difference between an inventory audit and cycle count is that the […]