Office of Operations Freight Management and Operations

5. Glossary of Terms

As-is Process Cost
The current cost of performing a process over a specified period prior to introducing the technology change being considered.
Benefit-Cost Ratio
A method used to help understand whether a new project or technology is economically feasible. The ratio is calculated by dividing the quantified benefits by a measure of the cost. A result greater than one means the project/technology is feasible; less than one means the project/technology is not feasible.
Business Process
A collection of activities that have definable starting and ending points and that achieve something of value to one or more organizations. For example, the business process of delivering a shipment can be described as a series of activities whose value is transferring the possession of goods.
Business Process Mapping
A tool used to understand business processes and a means to help meet one of several possible goals, such as measuring process performance or understanding how a business process would change if a new technology was applied. Business process maps generally include documenting specific activities or steps in the process, who performs them, and which activities are dependent on previous activities being completed.
Cost Driver
A factor related to an activity or a process that changes the volume or characteristics of that activity or process, and in doing so changes its costs. Activities and processes can have multiple cost drivers.
Cost Driver Value
The numeric value of the cost driver, including the units of that value.
Expert Panel
A group of domain experts who have the expertise and the authority to subjectively assess the impact of a particular technology on business processes and associated performance measures.
Internal Rate of Return (IRR)
Measures the attractiveness of an investment decision or proposed new project. IRR is the rate of return that would make the present value of future cash flows plus the final market value of an investment equal the current market price of the investment.
Net Present Value (NPV)
A measure used in capital budgeting to assess the profitability of a proposed investment or project. It is the difference between the sum of a project's benefits over time and the sum of the costs over time. To do this, monetary values are assigned to each benefit and cost. The calculation also recognizes the time value of money: that is, $1 today is not worth the same as $1 five years from now.
Payback Period
The length of time required to recover the cost of an investment. For example, if a $1million investment generates a positive return of $500,000 per year, then the payback period would be 2 years.
Performance Attribute
A characteristic of a performance measure.
Performance Class
A classification of performance measures in terms of attribute units, such as time and dollar value.
Performance Measure
A qualitative or quantitative measure of outcomes, outputs, efficiency, or cost-effectiveness. In general, measures should be related to an organization's mission and programs, and should not merely measure one-time or short-term activities.
Process Category
A high-level grouping of business processes. A category can be developed using a phase of the process flow, such as planning processes, execution processes, or enabling processes.
Process Category ID
An identifier used in FTAT that uniquely refers to a process category. Users should consider using a letter of the alphabet to identify a process category. For example, the letter "P" should be used to identify the "Plan" process category.
Process Definition
A brief description of the process that FTAT displays to users. The definition may include a summary of the kinds of activities included in the process and what organization is responsible for performing the process.
Quality Function Deployment
A structured method used to help connect user needs (or requirements) to the design features of a project proposed to address those needs. This method is particularly useful in accounting for needs that are not easily articulated or precisely defined.
Supply Chain
A collection of activities and organizations involved in moving products (for example, raw materials) from one point (such as a manufacturer's facility) to another (such as a customer's distribution center). It includes the exchange of both material and associated information flows (for example, shipment notices).
Technology Class
A term used to categorize the technology, such as software or hardware.
Technology Definition
A brief description of a specific technology, including some indication of the business application of that technology.

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