Distribution Requirements Planning -  Materials Management Vocabulary



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Demand Supply Balancing
The process of identifying and measuring the gaps and imbalances between demand and resources in order to determine how to best resolve the variances through marketing, pricing, packaging, warehousing, outsource plans or some other action that will optimize service, flexibility, costs, assets (or other supply chain inconsistencies) in an iterative and collaborative environment.
Demand Time Fence (DTF)
1) That point in time inside of which the forecast is no longer included in total demand and projected available inventory calculations; inside this point, only customer orders are considered. Beyond this point, total demand is a combination of actual orders and forecasts, depending on the forecast consumption technique chosen.
2) In some contexts, the demand time fence may correspond to that point in the future inside which changes to the master schedule must be approved by an authority higher than the master scheduler. Note, however, that customer orders may still be promised inside the demand time fence without higher authority approval if there are quantities available-to-promise (ATP). Beyond the demand time fence, the master scheduler may change the MPS within the limits of established rescheduling rules, without the approval of higher authority. See: planning time fence, time fence.
Deming Circle
The concept of a continuously rotating wheel of plan-do-check-action (PDCA) used to show the need for interaction among market research, design, production, and sales to improve quality. Also see: Plan-Do-Check-Action
Demographic Segmentation
In marketing, dividing potential markets by characteristics of potential customers, such as age, sex, income, and education.
The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. Also see: Detention, Express Denied Party List (DPL): A list of organizations that are unauthorized to submit a bid for an activity or to receive a specific product. For example, some countries have bans for certain products such as weapons or sensitive technology.
A physical characteristic of a commodity measuring its mass per unit volume or pounds per cubic foot; an important factor in rate making, since density affects the utilization of a carrier’s vehicle.
Density Rate
A rate based upon the density and shipment weight
Revisions or complete elimination of economic regulations controlling transportation. The Motor Carrier Act of 1980 and the Staggers Act of 1980 revised the economic controls over motor carriers and railroads, and the Airline Deregulation Act of 1978 eliminated economic controls over air carriers.
Derived Demand: Demand for component products that arises from the demand for final design products. For example, the demand for steel is derived from the demand for automobiles.
Destination-Enhanced Consolidation
Ganging of smaller shipments to cut cost, often as directed by a system or via pooling with a third party
The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. 
Deterministic Models
Models where no uncertainty is included, e.g., inventory models without safety stock considerations.
A discount offered by a carrier that faces a service time disadvantage over a route.
Digital Signature
Electronically generated, digitized (as opposed to graphically created) authorization that is uniquely linkable and traceable to an empowered officer.
Direct Production Material
Material that is used in the manufacturing/content of a product (example: Purchased parts, solder, SMT glues, adhesives, mechanical parts etc. Bill-of-Materials parts, etc.)
Direct Store Delivery (DSD)/ Door Delivery
Process of shipping direct from a manufacturer’s plant or distribution center to the customer’s retail store, thus bypassing the customer’s distribution center. Also called Direct-to-Store Delivery
Discrete Available-to-Promise
A calculation based on the available-to-promise figure in the master schedule. For the first period, the ATP is the sum of the beginning inventory plus the MPS quantity minus backlog for all periods until the item is master scheduled again. For all other periods, if a quantity has been scheduled for that time period then the ATP is this quantity minus all customer commitments for this and other periods, until another quantity is scheduled in the MPS. For those periods where the quantity scheduled is zero, the ATP is zero (even if deliveries have been promised). The promised customer commitments are accumulated and shown in the period where the item was most recently scheduled. Also see: Available-to-Promise
Discrete Manufacturing
Discrete manufacturing processes create products by assembling unconnected distinct parts as in the production of distinct items such as automobiles, appliances, or computers.
Discrete Order Picking
A method of picking orders in which the items on one order are picked before the next order is picked.
The carrier activities involved with controlling equipment; involves arranging for fuel, drivers, crews, equipment, and terminal space.
Distributed Inventory
Inventory that is geographically dispersed. For example, where a company maintains inventory in multiple distribution centers to provide a higher level of customer service.
Outbound logistics, from the end of the production line to the end user. 1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Synonym: Physical Distribution.
2) The systematic division of a whole into discrete parts having distinctive characteristics.
Distribution Center (DC)
The warehouse facility which holds inventory from manufacturing pending distribution to the appropriate stores.
Distribution Channel
One or more companies or individuals who participate in the flow of goods and services from the manufacturer to the final user or consumer.
Distribution On Demand (DOD)
The order fulfillment state a distribution operation achieves when it can respond, closest to real time, to changes in demand while shipping 100 percent customer compliant orders at the least cost.
Distribution Planning
The planning activities associated with transportation, warehousing, inventory levels, materials handling, order administration, site and location planning, industrial packaging, data processing, and communications networks to support distribution.
Distribution Requirements Planning (DRP)
A system of determining demands for inventory at distribution centers and consolidating demand information in reverse as input to the production and materials system.
Distribution Resource Planning (DRP II)
The extension of distribution requirements planning into the planning of the key resources contained in a distribution system: warehouse space, workforce, money, trucks, freight cars, etc.
Distribution warehouse
A warehouse that stores finished goods and from which customer orders are assembled.
Dock-to-Stock A program by which specific quality and packaging requirements are met before the product is released. Pre-qualified product is shipped directly into the customer's inventory. Dock-to-stock eliminates the costly handling of components, specifically in receiving and inspection and enables product to move directly into production.
Dock receipt
A receipt that indicates an export shipment has been delivered to a steamship company by a domestic carrier.
Domestic trunk line carrier
An air carrier classification for carriers that operate between major population centers. These carriers are now classified as major carriers.
Dormant route
A route over which a carrier failed to provide service 5 days a week for 13 weeks out of a 26-week period.
Double bottoms
A motor carrier operation involving two trailers being pulled by one tractor.
Double Order Point System A distribution inventory management system that has two order points. The smallest equals the original order point, which covers demand during replenishment lead time. The second order point is the sum of the first order point plus normal usage during manufacturing lead time. It enables warehouses to forewarn manufacturing of future replenishment orders.
Referring to the demand side of the supply chain. One or more companies or individuals who participate in the flow of goods and services moving from the manufacturer to the final user or consumer. Opposite of Upstream.
Drop Ship
To take the title of the product but not actually handle, stock, or deliver it, e.g., to have one supplier ship directly to another or to have a supplier ship directly to the buyer’s customer.
Dual operation
A motor carrier that has both common and contract carrier operating authority.
Dual rate system
An international water carrier pricing system where a shipper signing an exclusive use agreement with the conference pays a lower rate (10% to %15) than non-signing













shippers for an identical shipment.
Selling goods below costs in selected markets.
The packing material used to protect a product from damage during transport.
Durable Goods
Generally, any goods whose continuous serviceability is likely to exceed three years (e.g., trucks, furniture).
Dynamic Lot Sizing
Any lot-sizing technique that creates an order quantity subject to continuous re-computation.

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