Appendix B - Glossary



A single part or item that is a portion of an assembly for the bills of material.

Direct Cost

The cost of labor to produce a particular product or operation. Direct cost includes only the actual labor cost without any additions for overhead.

Direct Rate

The dollars per hour for labor that a particular operation costs.

Estimated Yield

An estimate of the percentage of finished goods that are completed for a particular work order by the end of the manufacturing process. Estimated yields are calculated based on past performance and are used to increase the demand for components or raw materials.

Finished Good

The final finished product for a sales order.

Indented Bill of Materials

A multi-level bill of materials showing all levels of assembly, together with the components that make up each level indented to the right. Any subassembly components are then indented further to the right.


The components, items, and raw material purchased or produced for resale or used to support production.

Inventory Master File

The main work file for the Inventory Control module.

Lot Size

The quantity normally manufactured for an item.

Move Time

The amount of time allocated by the scheduling system after an operation but before the products are ready to move to the next operation. It may represent cooling time, drying time, or any time required before an item can be physically moved.


Materials Requirements Planning. A way of calculating material requirements for the timely completion of a product.

Net Hours

The actual hours applied to an operation for each finished item.


A process in the production of an item, component, or finished good. 

Operation Code

A code that you assign to the operation that describes the type of work to be completed. An operation code can describe the actual operation, the machine it is processed on, or the work center. In the simplest of systems, one operation code called Labor will be defined.


Overhead reflects charges that are not attributable to a specific job. Overhead will include charges such as rent, utilities, and depreciation and those costs are allocated to jobs by an hourly rate.


A bill of materials coding technique that provides for utilizing similar groups of components in multiple bills. These groups of components are defined once, but used many times. A phantom is like a subassembly that is never stocked.


The technique of backflushing where materials are relieved prior to production. The manufactured item is not received when this methodology is used.


The technique of backflushing where materials are relieved after production is complete. The manufactured item is received when this methodology is used.

Queue Time

A record of the average amount of time material will wait in line for the next operation.

Raw Material

The purchased materials that are consumed in the manufacture of an item.

Run Time

The actual processing time for an operation after setup is complete. Run time is expressed in hours per piece or pieces per hour depending on the item being produced.

Scrap Factor

An amount that will increase the net quantity needed to compensate for anticipated scrap.

Setup Time

The amount of time necessary to setup a machine or an operation for processing. Setup time occurs only once for an entire operation and may include time to change a specific machine to prepare it for the next job.

Standard Cost

The sum of the materials, operations, and subcontracts, together with their costs, that make up the standard cost for an item.


A menu of tasks that are specifically related to a single masterfile entry.

Unit of Measure

The unit of which an item is stocked or consumed. Examples are each, case, dozen, foot, etc.

Work in Process

An accounting term that describes the value of the inventory on the shop floor. Work in Process is also used to generally describe the inventory that has some value added to it in the form of labor, but that is not complete. AddonSoftware only considers items to be Work in Process while a work order is open and not complete.






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