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Turnaround Time

The total amount of time it takes for a product or service to go through the entire system, from order entry/receipt, through delivery. This includes any delays due to demand exceeding availability, processing delays, movement, queues, etc.

See also Lead Time


Two-Bin System

An example of both Visual Management and the Pull System, where two bins or containers are used to trigger a reorder of parts or materials. Each bin contains enough parts to last during the delivery lead time. Once one bin is empty it is time to reorder the two-bin quantity.

See also Kanban


Type 1 Error

In Hypothesis Testing, rejecting the Null Hypothesis (no difference) when it is in fact true (e.g. convicting an innocent person).

TYPE 1 Errors are those where a relationship is assumed where none existed. Production Risk: Rejecting a good part.

See also Alpha Risk, Producers Risk, and Type II Error


Type 2 Error

In Hypothesis Testing: failing to reject a false Null Hypothesis (e.g., failing to convict a guilty person).

TYPE 2 Errors are those where it is assumed no relationship exists, when in fact it does.

See also Beta Risk, Consumer Risk, and Type I Error


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