Supply Chain and Operations Management Glossary (T)

T1 line (Trunk level 1): A data transmission capacity of 1,544,000 bits per second. This is a standard measure of telephone line capacity in North America. Historically, enough to carry 24 voice channels. Higher levels are: T2: 96 voice channels. T3: 672 voice channels. T4: 4032 voice channels.
Tank car: Rail car for carrying fluids. In contrast, see box, flat, and hopper car.

Tare weight: weight of empty vehicle, perhaps with driver, used for computing weight of delivered product.

TEU (Twenty foot Equivalent Unit): A unit of measure for maritime freight containers. The majority of maritime containers are either 20 feet or 40 feet long, 8.5 feet high, and about 100 inches wide. A 40 ft container is 2 TEU.

TIGER (Topologically Integrated Geographic Encoding and Referencing): a set of files available from the U.S. Bureau of the Census ( that give the latitude and longitude of major physical objects in the U.S. These include a) line objects such as roads, railroads, rivers, and utility lines; b) boundaries of objects such as counties, school, and congressional districts; and c) landmarks such as churches, schools, parks, cemeteries, buildings and factories. Address ranges for most streets are also available.

TMS (Transportation Management System): Software for helping manage the transportation, typically outbound from a distribution system. If, for example, outbound shipments are LTL, the TMS might provide the route. That is, the sequence of stops, and the order in which material is to be loaded onto a truck.

TOC (Theory of Constraints): A managerial philosophy that stresses the importance of identifying the capacity bottlenecks of a production process and then either eliminating these bottlenecks and/or finding ways to better utilize these bottleneck facilities. Although it is not computational, in spirit it is somewhat similar to LP.

TOFC (Trailer on flatcar): See piggy back.

Tolling: Contract manufacturing. Hiring some other manufacturing firm to do part or all of the manufacturing of your product. The contract manufacturer never owns the product.

Tornado diagram: A method for displaying the effects of various uncertain parameters on an output measure such as profit. If we are contemplating the development of a new product, uncertain parameters might be market size, production cost per unit, selling price, and development cost. For each parameter, you estimate three values: a most likely value, a lowest plausible value, and a highest plausible value. If there are n parameters, you then evaluate 2n + 1 cases, namely, the base case in which all parameters are set to their base value, and then for each parameter i, while holding all other parameters at their base value, evaluate total profit when parameter i is at its low value and when it is at its high value. Finally, you display the results as a horizontal bar graph in which profit is plotted horizontally and the parameters are listed vertically. For each parameter, a bar is displayed showing the range in total profit. If he parameters are sorted from top to bottom by greatest range in output to smallest range, then the diagram looks like a tornado or funnel cloud. A limitation of a tornado diagram is that it does not reveal interactions between parameters.

Tote: a container or box, small enough to be carried by a person, into which a picker places items as they are picked in the warehouse, typically one order per tote.

TQM (Total Quality Management): A philosophy of management of quality that takes a comprehensive, high-level view of quality improvement.

Tradeoff curve: A curve showing the tradeoff between two measures of goodness (e.g., low inventory vs. number of stockouts). See also efficient frontier.

Transactions based costing: See ABC (activity based costing).

Transfer price: an internal price used when one profit center of a firm provides goods or services to another profit center of the firm. The purpose of transfer prices is to motivate the individual profit centers to behave optimally with respect to the whole firm. See also: incentive compatible. Roughly speaking, when a production facility is running at capacity, the transfer price of its output should be the cost of buying the equivalent output in the outside market. When a production facility is running under capacity, its transfer price should be the marginal cost of production. Tax considerations may also play a role when the two parties involved in a transfer are in different taxing jurisdictions. Very similar to dual or shadow prices in an LP.

Transhipment: movement of product between two facilities at the same level in a supply chain, as when one automobile dealer supplies another dealer with a car.

TSP (Traveling Salesperson Problem): The problem of finding the shortest tour of a set of cities such that each city is visited exactly once. It is NP-hard. The same kind of problem arises in production changeovers among various products (e.g., in a paint booth).

Tunnel scanner: A tunnel scanner has individual scanners on top, both sides, and perhaps even the bottom of a conveyor, so that a package label can be read regardless of its orientation. This reduces the amount of labor required to make sure a package is properly oriented as it enters a sortation system. Turnover: outside the .S., it is the sales, typically measured in monetary units. In the U.S., it is usually short for turnover rate of inventory the number of times per year that old inventory is replaced by new inventory = (sales per year)/inventory.

Two dimensional code: A code for marking product in which dots over an area, rather than bars in a row, are used to code information. It can hold much more information (e.g., 200+ digits or 100+ characters, vs. typically 12 digits for a bar code).

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