1) Job Shop : It is a type of operations process where small amounts of custom

products are made. Each of the product has like a unique setup or its own
processing sequence. It is like a firm which produces unique products or just
one/very few quantity of each product.
2) Life cycle costing : It is an analysis to choose the most cost effective option
over its entire useful life and not just its initial purchase price. It takes into
consideration to purchase, own, operate, maintain and finally dispose of the
product and not not just the initial construction cost.
3) Material Release : It is an order issued to the supplier to notify that the
materials have to be shipped. The supplier already has the purchase contract for
the goods to be supplied and may choose to manufacture it in anticipation of the
release or may do so after receiving the order.
4) Overhead : It includes all manufacturing costs except direct materials and direct
labour. They refer to the expense of operating the business and hence is also
called operating cost.
5) Plant Rate : It a comparison of the manufacturing overhead costs to its
production costs. It can sometimes be an amount per machine or labour. Thus it
is the total value added by the plant divided by the total direct labour cost.
6) Shop Rate : It is the direct labour costs plus the manufacturing overhead
divided by the total labour hours. It is the cost of the labour per billable hour.
7) Shrinkage : It is the difference between the actual and recorded inventory. It
directly affects the margin or profit a retailer hopes to get. It may be due to
unrecorded scrap parts etc which were discarded without updating the inventory.
8) Takt Time : It the rate of production scheduling required to meet the pace at
which a customer requires a product. So it is the average unit production time
required to meet customer demand.
9) Terminal Value : It is the anticipated value of an operation at the end of the
time period considered. It is used in discounted cash flow analysis where it is the
entity value considering all future cash flows at a certain time in the future.
10)
Toyota Production System : It is a business system developed by toyota
comprising its philosophy and practices, giving excellent productivity and quality.
It involves continuous reduction of waste, respect for employees and customer
satisfaction.
11)
Variable Manufacturing Cost : It includes the operational costs which
depends on the volume of production unlike fixed costs.
12)
Backroom Costs : It includes costs which are not directly involved in the
production of the product. For example matching computer inventory to actual
inventory. Thus it does not add any direct value to the product.
13)
Contribution Margin : It is the selling price minus the variable cost per
unit. Thus it is the contribution of the sales to the fixed cost of production.
14)
Control Charts : It is used to study how a process changes over time. It
can be analysed to see if a process is currently under control and identify chronic
faults in the process.
15)
Direct Labour : It denotes the labour force directly involved in the
manufacturing of the product and not involved in the administration or
management.
16) Distribution : It is the process of delivering the product from the manufacturing
unit to its ultimate customer. It can be a complicated process involving direct and
indirect means with intermediaries.