Term
| acceptable quality level (AQL) |
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Definition
| a predetermined level of defective products that a company permits to be sold. |
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Definition
| a simplified approach for cost flow accounting that uses trigger points to determine when manufacturing costs are assigned to key inventory and temporary accounts. |
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Definition
| creating better customer value for the same or lower cost than can competitors or equivalent value for lower cost than can competitors. |
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Definition
| the length of time that a product serves the needs of a customer. |
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Definition
| providing the same or better value to customers at a lower cost than offered by competitors. |
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Definition
| the difference between what a customer receives (customer realization) and what the customer gives up (customer sacrifice). |
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Definition
| the stage in a product’s life cycle when the product loses market acceptance and sales begin to decrease. |
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Term
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Definition
| an approach that strives to increase customer value by increasing what the customer receives. |
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Term
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Definition
| activities that define the processes of an organization. |
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Term
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Definition
| the relationship of a firm’s activities within its segment of the value chain with those activities of its suppliers and customers. |
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Definition
| selecting or emphasizing a market or customer segment in which to compete. |
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Term
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Definition
| the stage in a product’s life cycle when sales increase at an increasing rate. |
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Term
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Definition
| the linked set of value–creating activities from basic raw materials to end–use customers. |
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Term
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Definition
| relationships among activities within a firm’s value chain. |
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Term
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Definition
| a product life–cycle stage characterized by preproduction and startup activities, where the focus is on obtaining a foothold in the market. |
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Term
| just–in–time (JIT) manufacturing |
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Definition
| a demand–pull system that strives to produce a product only when it is needed and only in the quantities demanded by customers. |
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Term
| just–in–time (JIT) purchasing |
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Definition
| a system that requires suppliers to deliver parts and materials just in time to be used in production. |
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Term
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Definition
| assessment assigning costs and benefits to environmental consequences and improvements. |
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Term
| life–cycle cost management |
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Definition
| actions taken that cause a product to be designed, developed, produced, marketed, distributed, operated, maintained, serviced, and disposed of so that life– cycle profits are maximized. |
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Term
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Definition
| a plant layout containing machines grouped in families, usually in a semicircle. |
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Term
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Definition
| the stage in a product’s life cycle when sales increase at a decreasing rate. |
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Term
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Definition
| day–to–day activities performed as a result of the structure and processes selected by an organization. |
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Term
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Definition
| those factors that drive the cost of operational activities. |
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Term
| organizational cost drivers |
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Definition
| structural and procedural factors that determine the long–term cost structure of an organization. |
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Term
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Definition
| the costs of using, maintaining, and disposing of a product incurred by the customer after purchasing a product. |
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Term
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Definition
| the time a product exists—from conception to abandonment; the profit history of the product according to four stages: introduction, growth, maturity, and decline. |
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Term
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Definition
| the time a product generates revenue for a company. |
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Term
| strategic cost management |
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Definition
| the use of cost data to develop and identify superior strategies that will produce a sustainable competitive advantage. |
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Term
| strategic decision making |
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Definition
| choosing among alternative strategies with the goal of selecting a strategy or strategies that provide a company with reasonable assurance of long–term growth and survival. |
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Term
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Definition
| the process of selecting the optimal mix of cost leadership, differentiation, and focusing strategies. |
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Term
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Definition
| choosing the market and customer segments, identifying critical internal business processes at which the firm must excel to increase customer value, and selecting the individual and organizational capabilities required to achieve the firm’s internal, customer, and financial objectives. |
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Term
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Definition
| activities that determine the underlying economic structure of the organization. |
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Term
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Definition
| the difference between the sales price needed to achieve a projected market share and the desired per–unit profit. |
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Term
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Definition
| the complete range of tangible and intangible benefits a customer receives from a product. |
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Term
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Definition
| an approach to managing quality that demands the production of defect–free products. |
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Term
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Definition
| identifying and exploiting internal and external linkages with the objective of strengthening a firm’s strategic position. |
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