{"id":1610,"date":"2017-12-25T19:37:08","date_gmt":"2017-12-25T19:37:08","guid":{"rendered":"https:\/\/www.aiminsight.com\/?p=1610"},"modified":"2017-12-25T20:12:35","modified_gmt":"2017-12-25T20:12:35","slug":"supply-chain-and-operations-management-glossary-b","status":"publish","type":"post","link":"https:\/\/www.aiminsight.com\/blog\/uncategorized\/supply-chain-and-operations-management-glossary-b\/","title":{"rendered":"Supply Chain and Operations Management Glossary (B)"},"content":{"rendered":"

B2B:<\/strong>\u00a0Business to Business. This is a transaction between two businesses.<\/p>\n

B2C:<\/strong>\u00a0Business to Consumer. This is a transaction between a business and a consumer.<\/p>\n

Backhaul:<\/strong>\u00a0A return trip, carrying goods perhaps at a lower rate, after making the primary delivery. See also deadhead.<\/p>\n

Backlog:<\/strong>\u00a0very similar to back order. Product ordered by customer but not yet delivered.<\/p>\n

Back order:<\/strong>\u00a0unsatisfied product demand for which customer is willing to wait for shipment later, rather than cancel the order.<\/p>\n

Backup Agreement:<\/strong>\u00a0A purchasing arrangement between a supplier and a retailer that bundles the purchase of given number of nonreturnable units, with the option to buy a given number of additional units for quick delivery at a specified price. For example, the retailer might purchase outright 80 units at $150 each, bundled with 20 options at $15 per option, to purchase an additional 20 units at $140 each. Compared to a conventional agreement, a backup agreement spreads the forecasting risk between the supplier and the retailer. A conventional agreement that allows full refund of unsold units puts all the forecasting risk on the supplier (and the retailer will tend to order too much). A conventional agreement with no refunds puts all the forecasting risk on the retailer (and the retailer will tend to order too little).<\/p>\n

Bait-and-switch:<\/strong>\u00a0A situation where a vendor advertises two types of products, a cheap one, Type Y, and a more expensive one Type A. There are two classes of customers: Class II customers are only willing to buy product Y, whereas class I customers prefer product Y but are willing to buy product A if Y is out of stock. An interesting inventory management problem is how many units of product Y to stock. If a small quantity of Y is stocked, then class I customers may arrive hoping to buy Y but end up buying the more expensive (and profitable to the vendor) type A product. This is very similar to revenue management as practiced in the airlines. Ethics\/long term customer good will suggests that the vendor should be clear in the advertising of Y that \u201climited quantities available, no rain checks\u201d.<\/p>\n

Balanced Scorecard:<\/strong>\u00a0Traditional accounting measures are mainly designed for measuring performance as seen by the stockholders. Robert Kaplan of Harvard Business School popularized an extension of accounting measures, consisting essentially of the following steps: 1) Identify the company’s stakeholders (e.g., customers, employees, communities in which the company operates, stockholders). 2) For each stakeholder, identify metrics for the company’s performance. E.g., order fill rates, product return rates; wage rates, employee turnover; charitable gifts, pollution levels; stock price. 3) Measure and report the company\u2019s performance on each of these measures.<\/p>\n

Baldrige Award:<\/strong>\u00a0An award that recognizes quality achievement by U.S. organizations, see http:\/\/www.quality.nist.gov. It is named after former Commerce Secretary, Malcolm Baldrige, who was killed in a rodeo accident in 1987. Annual awards may be given in four categories: manufacturing, service, small business, and education\/health services.<\/p>\n

Balking:<\/strong>\u00a0The action of an arriving customer in a service system to not join a waiting queue because the queue is too long. This results in a lost sale. Contrast with reneging.<\/p>\n

Bar code:<\/strong>\u00a0A machine readable marking on a product or box. It typically contains 10 to 12 digits of information about the contents of the box. A major manufacturer of barcode printers, Zebra Technologies, takes its name from the appearance of these bar codes. More recent two-dimensional codes may contain as much as 100 characters. See also UPC, RFID. The general public is familiar with bar codes for the use in checkout of purchases at a cash register. Bar codes are also very important in warehouses\/DC\u2019s in that they facilitate automated sorting.<\/p>\n

Barge:<\/strong>\u00a0a vessel used mainly in inland water transportation. It typically is not powered. A set of barges, perhaps a half dozen or more, may be grouped into a \u201ctow\u201d which is propelled by a tugboat. The advantage of a barge is that, like a trailer in a tractor-trailer combination, it can be left at a loading or unloading point to be loaded or unloaded over a period of hours or days while the tugboat moves on to other activities.<\/p>\n

Base stock policy:<\/strong>\u00a0An inventory policy whereby, whenever a demand occurs, an order is immediately made to replace the amount sold. It is a Q,r policy with Q = 1. See JIT.<\/p>\n

Bathtub curve:<\/strong>\u00a0A typical shape for the failure rate curve for many pieces of equipment (i.e., the conditional probability of failure in the next hour) is to start high due to the \u201cbirth defects\u201d new equipment may have, decrease to a low fairly constant rate for a long period of time, and then increase again as the equipment reaches \u201cold age\u201d. See also failure rate curve, MTBF, IFR, and DFR.<\/p>\n

Bay:\u00a0<\/strong>an open area in a building such as a warehouse, unimpeded by pillars. Thus, a building with n rows of interior pillars would have n+1 bays. If an overhead crane is used for moving material, it can usually move only within one bay.<\/p>\n

Beer game:<\/strong>\u00a0A business game composed of a four level supply chain. Early members of the chain (e.g., the manufacturer) do not see final demand directly, but only indirectly via the information, mainly in the form of orders received from their immediate downstream customer. Small fluctuations in retail demand typically cause big fluctuations in demand seen by the manufacturer, illustrating the bull-whip effect.<\/p>\n

Bill of Lading:<\/strong>\u00a0A binding legal contract between a shipper and a carrier for each load picked up by the carrier from the shipper. It lists the items picked up and the address to which they are to be delivered. It is the shipper\u2019s receipt from the carrier.<\/p>\n

Binomial distribution:<\/strong>\u00a0Suppose your product is in use by n customers. On any given day, any given customer will generate a service call request with probability p, independent of other customers. A service call request requires a trip to the customer, which takes a full day. Then, the number of service requests in a day has a binomial distribution with parameters n and p. The probability of exactly k service requests in a day is pk(1-p)n-k n!\/(k!(n-k)!). The mean of the distribution is np, the variance in the number of service requests is np(1-p). For example, if n = 6 and p = .1, then the probability of k = 0 service requests is .96 = .531441. The probability of 1 request is .1*.95*6!\/5! = .354294. The probability of 2 requests is .12*.94 *15 = .098415. The binomial distribution with parameters n and p, converges to the Poisson distribution with mean np, as n gets large and p gets small. The binomial converges to the Normal distribution if p is close to .5 and n gets large.<\/p>\n

BOM (Bill of Material):<\/strong>\u00a0A listing for each product or sub-assembly of all the components or subassemblies that go into it and how many are required. See also MRP.<\/p>\n

Bonded storage:<\/strong>\u00a0secure storage for product for which taxes, such as excise tax, may become due when product leaves storage, depending upon its destination. The warehouse owner guarantees to tax\/tariff collecting agencies that product will not be released without payment of any taxes due depending upon where the product is shipped.<\/p>\n

Box car:<\/strong>\u00a0A covered rail car, typically loaded and unloaded via forklift through doors on either side. This is typically forty to fifty feet long. In contrast, see flat, hopper and tank car.<\/p>\n

Braess\u2019s paradox:<\/strong>\u00a0The observation, supposedly made by Braess of traffic in Stuttgart, that for some traffic networks, if new link capacity is added to the network, the total traffic delay at user equilibrium may in fact get worse. The paradox arises because, when individuals optimize individually, they do\/may not take into account the impact of their decisions on other parties. For example, when making the decision to take a car vs. a train, or a particular route, we tend to not take into account the additional delay that we may cause other commuters as a result of this decision. There is a strong form and a weak form. The strong form is that every traveler\u2019s travel time is no worse, with some of them experiencing reduced travel time. The weak form is only that total travel time is reduced. The use of \u201cmetering\u201d lights at the on-ramps to some expressways is a way to avoid situations very similar to Braess\u2019s paradox. Traffic engineers have discovered that by restricting capacity on the on-ramp total delay is reduced. See also: Wardrop\u2019s Principle.<\/p>\n

Break bulk:<\/strong>\u00a0Disaggregate a big shipment from a single source (e.g., a manufacturer) into smaller quantities to be shipped as needed to multiple customers (e.g., retailers).<\/p>\n

BTU (British Thermal Unit):<\/strong>\u00a0A common measure of performance for energy producing or energy consuming products, defined as the energy in heat form needed to raise the temperature of one pound of water by one degree Fahrenheit. See calorie.
\n
\nBucket Brigade:<\/strong>\u00a0A method for coordinating workers along a pick or production line. Workers remain in sequence as each moves forward with her job along the line. When the last worker completes her job, she takes over the job of her predecessor, who then takes over the job of her predecessor, and so on. Until the first worker introduces a new job to the line.<\/p>\n

Bull whip effect:<\/strong>\u00a0the observation in multi-echelon inventory systems that a small fluctuation in the demand per period at the retail end may result in a dramatic fluctuation in the amount demanded at the manufacturer, analogous to how a small flick of the wrist will cause the tip of a bull whip to move a great distance. The fluctuations in demand by the retailer on the supplier may be due to a number of reasons (e.g., order batching by the retailer if it uses a Q,r inventory model with a large Q, price changes by either the supplier or the retailer, or generally poor information sharing between the retailer and the supplier, so that the supplier is surprised by the large retailer demand when the retailer does a promotion).<\/p>\n

Bundle pricing:<\/strong>\u00a0A vendor does bundle pricing if the vendor sells two or more products as a bundle for a price lower than the sum of the individual product prices. The vendor can sometimes increase revenues thereby. As an example, suppose customer A is willing to pay $800 for product X and $400 for product Y. Customer B is willing to pay $400 for product X and $800 for product Y. If the vendor sets a single market price for each product individually, the most he can make is $1600. If, however, the vendor sells the two products only as a bundle for $1200, he can make $2400.<\/p>\n

Burn rate:<\/strong>\u00a0term used, typically in consulting, for the rate at which cash is being spent, usually on personnel involved in implementation of some system.<\/p>\n

By-product:<\/strong>\u00a0a joint-product of small value relative to the other joint-products.<\/p>\n","protected":false},"excerpt":{"rendered":"

B2B:\u00a0Business to Business. This is a transaction between two businesses. B2C:\u00a0Business to Consumer. This is a transaction between a business and a consumer. Backhaul:\u00a0A return trip, carrying goods perhaps at a lower rate, after making the primary delivery…. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-1610","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/posts\/1610","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/comments?post=1610"}],"version-history":[{"count":3,"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/posts\/1610\/revisions"}],"predecessor-version":[{"id":1616,"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/posts\/1610\/revisions\/1616"}],"wp:attachment":[{"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/media?parent=1610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/categories?post=1610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aiminsight.com\/blog\/wp-json\/wp\/v2\/tags?post=1610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}