A3 Method: The A3 system is a means of describing a business process in a compact form. It was originally created by the Toyota Motor Corporation and was named for the paper size on which it was printed: A3 (11” x 17”). Toyota used the A3 methodology to help develop its famed Toyota Production System(TPS).

Abandonment: (1) The decision ofa carrier to give up or to discontinue service over a route. Railroads must seek ICC permission to abandon routes. (2) As in the phrase “call abandonment”. This refers to people who, being placed on hold in an incoming call, elect to hang up (“abandon”) the call.
Call centers monitor closely the “abandonment rate” as a measure oftheir inefficiency.

ABB:See: Activity Based Budgeting

ABC: See:Activity Based Costing

ABC Classification: A method ofclassifying inventory items relative to their impact on total control.

ABC typically uses movement and cost data to calculate the value ofstock usageover the prior period, and uses the result as an element in ranking items under an 80/20 Pareto rule for cycle counting purposes. The group is divided into classes called A, B, and C (and sometimes D) with The A group represents the highest value with 10 to 20% by number ofitems. The B, C and D (ifused) groups are each lower values but typically higher populations. Items with higher usage value are (the 20%) are counted more frequently. Specific bars to be used in setting ABC levels will vary by organization as they will impact the financial control applied to inventory and thelevel ofeffort spent counting. See: Cycle Counting

ABC Costing: See: Activity Based Costing

ABC Frequency of Access:Location method where thedetermination ofa product’s location within the warehouse, ordistribution center, is based on 1)product’s ABC Classification and 2) thenumber oftimes or rate ofwhich theproduct is accessed.

ABC Inventory Control: A method ofinventory control which divides items into categories based on valueofusage, something like a Pareto division where the items which constitutethe highest dollar value are tracked more closely than thosewith lowervalue movement. In this method an
itemwith high volumes ofmovement, but low cost, such as a small cheap fastener, would likely be counted less frequently than a slower mover which has a very high cost. Items are typically divided by a company defined set ofvalues into “A”,“B” and “ C”groups, and sometimes even a“D” group. The count frequencies are then applied to thegroups. For example“ A” class items may be counted weekly,“B” monthly,“C” quarterly, etc. as a part ofa cycle counting program.

ABC Model: In cost management, a representation of resource costs during a time period that are consumed through activities and traced to products, services, and customers or to any otherobject that creates a demand for the activity to be performed.

ABC System: In cost management, a system that maintains financial and operating data on an organization’s resources, activities, drivers, objects and measures. ABC models are created and maintained within this system.

ABM: See:Activity Based Management

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