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Definition
| a set of characteristics or procedures that provide a basis for resources and production decisions. |
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| Reflect the quality level and characteristics important to the target customer. |
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| brief, written descriptions of materials, procedures, dimensions, and performance for a particular style; |
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| properties and characteristics desired for a particular product. |
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| international, national, industry, firm |
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| International Organization of Standardization |
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Definition
| Comprises the national standards from 163 countries. Provides International Standards for Business, Government and Society. |
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| ___certification is recognized world wide and required to sell goods internationally. |
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| American Society for Testing and Materials (ASTM) |
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Definition
| The worlds largest source of voluntary standards for thousands of different types of products. |
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| American Association for Textile Chemists and Colorists (AATCC) |
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Definition
| The world’s leading not-for-profit association serving textile professionals providing test method development, quality control materials, and professional networking for thousands of members in 60 countries throughout the world. |
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| ------- must be built into the product from the beginning it cannot be added at the end of the construction process. |
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| Reflect the overall intrinsic quality level the firm seeks to achieve. |
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| Provide consistency between products and product lines |
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| Bases for product development decisions, specifications development, and quality control. |
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| Affect the costs, intrinsic quality, materials used, methods of production |
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| ------- --------- is commitment to quality, all employees participate, based on defect prevention |
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| ----- ------ are original pattern pieces that are kept intact and copied and manipulated to produce patterns for garment styles. They contain fitting ease, but no seam allowances |
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| are developed to reflect the size and fit requirements of a firms target customer |
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| provide consistency among sizes for a variety of styles |
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| is the process of scaling the sample size of a garment to other sizes in the range for production. |
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| are the amount s added or subtracted from each measurement to mark changes from one size to another. |
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| Companies doing business with the European Union |
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| are required to use European sizing charts and state in metric units any measurements included on apparel |
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| Must meet the needs of both the customer and the firm |
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| Types of performance standards are used in product development |
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| Standards related to the performance of materials |
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| Types of performance standards are used in product development |
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Definition
| Standards for performance of finished product |
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| Used to communicate standards and provide control of products during production |
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| Basis for negotiation of bids and contracts between suppliers and buyers |
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| Determine acceptability of materials and finished goods |
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| Help to ensure products meet the firms quality, fit and performance standards |
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| are previously developed style, pattern, and measurement specifications that can be reused to save time and money |
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| Quality, Appearance, Dimensions, Basis for product evaluation |
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| establish minimum requirements and allowed variance for acceptability of materials and material performance, procedures for production, characteristics of finished garments, size dimensions, and measurements and placement of components. |
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| use generic terms and identify only the properties that are needed allowing for flexibility in sourcing. |
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| limit the product to a specific brand or vendor. |
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when the specified value exceeds the lowest acceptable level or the specification is really not needed. |
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the allowed variation from the specification. Difference between the allowable minimum and maximum on a process or finished measurement. |
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| a products compliance with specifications |
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Definition
| will determine if it is considered first quality, a second or rejected. |
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Definition
| checked to assure compliance with specifications. |
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| How the garment (style) conforms to or differs from the body |
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| Determined by the design team |
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| Begins with the basic block but exhibits fashion elements |
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| set of pattern pieces for the simplest garment of a particular type that reflects a set of measurements and fit for the sample size |
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| a garment’s physical equilibrium on the body. |
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| difference between garment measurements and body measurements. |
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| placement of design lines, trims, and components. |
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| Shoulder seams, side seams, and CF & CB |
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Definition
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Definition
| perpendicular to the floor |
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Definition
| built into basic block, fit standards. Impacted by body movement, fabric characteristics, style of garment, type of fit, and customer preferences |
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Definition
| Fabric, thread, trim, and findings used in garments |
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| Wages of employees who work on the product |
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| Indirect labor, occupancy costs, other overhead |
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| Difference between cost of good sold and net sales |
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| Amount available to cover general operating expenses and profit |
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| General Operation Expenses |
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| Indirect labor—other than indirect factory labor |
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| General Operation Expenses |
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| General Operation Expenses |
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Definition
| Occupancy costs for headquarters |
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| General Operation Expenses |
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| Justification for adoption |
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| Justification for equipment purchases |
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| price of the product - cost of goods |
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| Is based on variable/direct costs of the product production labor, material costs, sales commission |
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Definition
| Makes is possible to compare the cost of producing each products and its contribution to nonvariable selling, administrative costs and profit. |
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Definition
| Considers all manufacturing (V/N.V) costs to be product costs. |
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| overhead application rate |
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Definition
| applied to measurable direct labor hrs/ machine time. (overhead application = total factory overhead/ total direct labor) |
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| Risk of overhead inflating the direct cost |
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| Risk of not being accurate. |
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| Activity-Based Costing ABC |
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Definition
| Determines cost of all activities |
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| Activity-Based Costing ABC |
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Definition
| Overhead costs are assigned to styles and customers |
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| Activity-Based Costing ABC |
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Definition
| Provides most realistic information of actual product costs |
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| Costing Individual Styles |
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Definition
| Product development costs |
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| Costing Individual Styles |
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Definition
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| Costing Individual Styles |
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Definition
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| Costing Individual Styles |
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Definition
| Breakdown: sequential list of all operations |
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| Costing Individual Styles |
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Definition
| Production Standard for each operation |
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| Costing Individual Styles |
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Definition
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| Costing Individual Styles |
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Definition
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| Product Development Costs |
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Definition
| Include all the activities needed to prepare a new product for the line |
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| Product Development Costs |
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Definition
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| Product Development Costs |
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Definition
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| Product Development Costs |
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Definition
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| Product Development Costs |
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Definition
| Selecting and sourcing materials |
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| Product Development Costs |
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Definition
| Establishing assembly methods |
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| Product Development Costs |
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Definition
| Determining stitch and seam types |
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| Product Development Costs |
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Definition
| Determining placement of zippers, snaps, labels |
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Definition
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Definition
| Checking fit and garment measurements |
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Definition
| Checking each set of graded patterns to verify seam alignment and notch placement |
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| Specification development |
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| Data entry for bill of materials |
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| Verifying new style number and the line in computer system |
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| Customer approval of artwork |
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| the largest part of product costs |
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Definition
| Begins with the Bill of Materials |
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| list of all the materials and quantities of each used in one of one style. |
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| Based on sample development |
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| Specific products to be used |
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| Compensation for producing the firm’s product line |
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| Base rate: $ compensation for one hour of work |
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Definition
| Plant efficiency: volume of production relative to # of work hours |
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| % plant efficiency x number of work hours x weighted average base rate |
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Definition
-complexity of a design -materials used -amount of change in product -degree of specialization required |
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| Factors Affecting Direct Labor Costs |
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Definition
| Labor Intensity of a product |
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| Factors Affecting Direct Labor Costs |
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Definition
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| Factors Affecting Direct Labor Costs |
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Definition
| Automated vs. non automated operations |
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| Factors Affecting Direct Labor Costs |
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Definition
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| Factors Affecting Direct Labor Costs |
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Definition
| Quantity (volume) produced |
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| Factors Affecting Direct Labor Costs |
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Definition
| # of operators x hours per week x weeks per year x average hourly earnings |
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| standard labor cost + excess labor costs |
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| compensation for time spent on the job but not producing a product |
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| Total Direct Labor cost, direct labor costs, excess labor costs |
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| increase as volume decreases. |
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Definition
| when revenue from sales equals the cost of producing a specific product. Point when a style begins to turn a profit. |
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| Cost-based and Demand-based |
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Definition
| Determine manufacturing costs and add markup to determine wholesale price |
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Definition
| wholesale price is determined by multiplying unit cost by some reasonable markup. (dose not account for variations at different levels of output) |
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| return on investment (ROI) |
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Definition
| the amount earned in direct proportion to the amount invested. (target amounts usually 10 – 20% after taxes) |
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Definition
| Prices based solely on costs, rather than the value customer places on product |
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| list price may be set well above cost of production. |
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| market penetration pricing |
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Definition
| prices are set slightly above costs to maximize sales volume. |
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Definition
| prices are set to match competitors. |
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| Legal Restrictions on Pricing |
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Definition
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| Legal Restrictions on Pricing |
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| trade, quantity, seasonal, payment terms |
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| advertising, shipping, chargebacks |
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| Includes all costs: materials, labor, transport to and loading to primary carrier |
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| Loading is the point of ownership change |
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| Manufacturer takes responsibility up to the shipping point |
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Definition
| FOB, quota cost, agents commission (% of FOB), tariffs (based on weight and value), freight and insurance, customs clearance |
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| products and materials that are used in the production of other goods. |
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| end products produced by manufacturers and distributed by retailers. |
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| owns textile machinery and makes yarn and/or fabric. |
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| finishers. They buy greige goods from a mill, apply finishes, dyes, and prints. |
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| made in shorter runs, more expensive to produce. Can be made to customers specifications. |
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| made year round little change from year to year. |
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| mills, converters, involved in making and transforming the fabric. |
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| firms involved in resale. jobbers, brokers, wholesalers. |
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Definition
| buy fabric from mills, converters and apparel manufacturers in small quantities. |
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Definition
| facilitate transfer of ownership from textile mill to apparel manufacturer. |
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Definition
| purchase a large assortment of fabrics from textile mill and sell at smaller quantities to apparel manufacturers. |
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Definition
| Traditionally used for basic goods. Relates sales forecasts to inventory levels. Firm maintains a large investment in inventory of finished goods. |
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Definition
| Goal is to not maintain a finished goods inventory. The goal is to have zero inventory at the beginning and end of sales season. |
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Definition
| Designers, buyers, merchandisers, sourcing specialists or purchasing agents may be involved in the process. |
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| Include fibers, yarns, fabrics and findings. |
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| Is a statement of compliance with specifications. |
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| Includes documentation of flaws and their locations. |
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| Reports textile tests performed and results. |
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| Identifies the lab and when tests were conducted. |
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| Documentation of purchase order numbers, lots, markings on materials |
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Definition
| materials have shorter lead time and are usually lower priced than goods made to the apparel firm’s specifications. |
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Definition
| may be developed for a line. Textile print may be designed by the firms designers, purchased from a fabric design studio or free-lance designer. Print can be copy written. |
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Definition
| when a firm purchases the full production run of a textile design from a mill or converter. |
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| how fabric is folded or rolled |
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| less than 40 yards in length. Often purchased by jobbers. |
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| less than 10 yards in length. |
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| less than 30 yards, rolled on flat bolt. Available at fabric stores like JoAnn’s |
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| Weave massive quantities of basic fabrics and sell the raw goods to garment producers or converters |
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| Produce a commodity product with no differentiation |
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| Fabric produced for a world market |
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| design produced at the same time as the fabric is woven |
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| More expensive; more permanent design than applied designs; specialized looms required |
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| Marketed to garment manufacturers and producers of consumer goods |
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| Mills specialize in specific kinds of fabric because of the equipment specialization |
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| Sold by sales reps, swatch cards, trade shows |
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| appear after laundry or wet processing |
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Definition
| Shrinkage Bleeding Crocking Color fading |
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Definition
| Shading Bowing/skewing Fabric flaws: runs, holes, slubs, broken yarns, knots Width variation |
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Definition
| concerned with the size or length of defects and the number of defects in the lot. |
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| Each system places emphasis on different aspects of defects |
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| Must specify the system to be used |
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Definition
| purchase the materials and have the production done by a contractor |
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| Full-package program (FPP) |
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Definition
| have the contractor source materials and produce finished goods |
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| Half-package program (HPP) |
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Definition
| purchase or provide materials and have product development and production done by a contractor |
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Definition
| generate part of the production and contract the rest |
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Definition
| purchase the finished goods from a manufacturer |
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| Used as a method of payment by the sourcer (buying firm) to the contractor in an international sourcing operation. |
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| Outlines the purchase arrangement and the agreements between the parties. |
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| The contractor can use to secure funds from the local bank to obtain working capital. |
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| Provides the terms of agreement such as the purchased products, sizes, colors, delivery dates, first cost, any special processing, quality criteria, need for quality certification, documents need for entry into the U.S., purchase terms and consignee. |
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| North American Free Trade Agreement (NAFTA) included |
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Definition
| the U.S., Canada, and Mexico |
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Definition
| Trade Partnership Act (CBTPA) |
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Definition
| and Opportunity Act (AGOA) |
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| Office of Textiles and Apparel (OTEXTA) |
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Definition
| Part of the International Trade Administration of the U.S. Department of Commerce. |
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| Office of Textiles and Apparel (OTEXTA) |
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| Provides data on U.S. imports, production, market, import production ratio and domestic market share for textile and apparel product categories. |
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| Office of Textiles and Apparel (OTEXTA) |
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Definition
| Harmonized Tariff Schedule |
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Definition
| will develop a bid package for potential contractors |
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Definition
| makes a pre production sample |
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| may be required by some firms |
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Definition
| will monitor styles as they are produced |
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| An independent quality audit may take place |
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| last step in agent process |
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Definition
| Finished goods are transported to desired country for sale. |
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Definition
| are used to move containers to ocean ports and factories |
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| Quota rent or quota premium |
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Definition
| The economic rent received by the holder of the right (or license) to import under a quota. |
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| Quota rent or quota premium |
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Definition
| Equals the domestic price of the imported good, net of any tariff, minus the world price, times the quantity of imports. |
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Definition
| additional taxes paid to import or export goods |
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Definition
| becomes the basis for determining whether to produce domestically or offshore. Rule of thumb has been if producing over 1,000 units of same style offshore is more cost effective. |
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