ERP & MRO Glossary

Collection of prioritizing practices to give varied levels of attention to different classes of inventories. For example, Class A items typically make up 15 to 25 percent of stock items but 75 to 85 percent of inventory value. Class C items, might be 60 percent of stock items but only 10 percent of the inventory value. Class B items would be somewhere between A and C items.

The systematic planning and control of a physical asset resource throughout its economic life; the systematic planning and control of a physical resource throughout its life. This may include the specification, design, and construction of the asset, its operation, maintenance and modification while in use and its disposal when no longer required.

The physical resources of a business, such as plant equipment, facilities, building systems, fleets, or their parts and components.

A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component’s upper-level parent item based on what should have been used as specified on the bill of material and allocation records. This approach has the disadvantage of a built-in differential between the book record and what is physically in stock. Syn:explode-to-deduct,post-deduct inventory transaction processing. See: pre-deduct inventory transaction processing.

The application of costs based on the output of a process. Backflush costing is usually associated with repetitive manufacturing environments.

A financial statement showing the resources owned, the debts owed, and the owner’s share of a company at a given point in time.

A double-entry record system that shows the balance of inventory items on hand and the balances of items on order and available for future orders. Where a reserve system of materials control is used, the balance of material on reserve is also shown. Also see: demand planning

A financial statement showing the resources owned, the debts owed, and the owner’s share of a company at a given point in time. Also see: license plate.