SUPPLY CHAIN JARGONS Pegging In MRP and MPS, the capability to identify the sources of its gross requirements and/or allocations for the given item. Pegging can be thought of as active where-used information. ABC Inventory Control An inventory control approach based on the ABC classification. According to this classification, the groups of items are placed in the decreasing order of annual dollar volume (price multiplied by projected volume) or some other criteria. This array is then split into three classes, called A, B, and C. The A group usually represents 10% to 20% by number of items and 50% to 70% by projected dollar volume. The next grouping, B, usually represents about 20% of the items and about 20% of the dollar volume. The C class contains 60% to 70% of the items and represents about 10% to 30% of the dollar volume. The ABC principle states that effort and money can be saved through applying looser controls to the low-dollar-volume class items than will be applied to high-dollar-volume class items. The ABC principle is applicable to inventories, purchasing, sales, etc. Available Inventory The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called beginning available balance Safety Stock The level of inventory desired at any time to counterbalance the many uncertainties met in a supply chain. Cycle count An inventory verification method that uses periodic, scheduled counts of inventory and associated locations to determine accuracy. Count schemes may be designed based on usage volume, all parts in specific warehouse rows, or other methods and normally involve the use of trained count personnel. WIP (Work in Process) The inventory under assembly in an assembly plant Backlog All the customer orders received but not yet shipped. Sometimes referred to as open orders or the order