Glossary Terms Archive

Carrying Costs: Formula, Benchmarks, and How Lean Six Sigma Reduces Them

Carrying costs — also called inventory holding costs — are the total annual expenses a business incurs for keeping inventory on hand. They cover the capital tied up in stock, the physical cost of storing it, insurance and taxes, and the risk that products will become...

Arrow Diagram Guide: AOA vs AON Network Methods

Project managers worldwide rely on visual tools to transform complex schedules into clear, actionable roadmaps. Among these essential tools, the arrow diagram stands as one of the most powerful techniques for mapping project activities, dependencies, and critical...

Six Sigma Executive Committee: How to Build One That Works

A Six Sigma executive committee is the senior leadership body responsible for governing a Lean Six Sigma deployment. It approves the improvement portfolio, allocates budget and staff, removes cross-functional barriers, and reviews project results against strategic...

Economic Order Quantity

What is the Economic Order Quantity (Economic Order Quantity)? The economic order quantity (EOQ), also known as the optimal quantity, is the number of units that a company should order to meet its demand and minimize inventory expenses such as holding...

Deming cycle

What is a Deming Cycle? The Deming Cycle (or Plan-Do-Check-Act (PDCA)) is a four-step iterative technique used to solve problems and improve organizational processes. Dr. Walter A. Shewhart, the renowned physicist and statistician from Western Electric and Bell Labs,...