terms alphabetically: A
J K L M N O P Q R S T U V W X Y Z
Compensation for loss or injury suffered
by one party to a contract as a result of the other party's
It implies the hazardous goods and is
used extensively in international trade
It refers to purchasing by many agencies
within an organisation rather than one central agency looking
after all purchasing
It's the value of goods stated in the
shipping document while transported. It is used for achieving
a lower freight rate or for obtaining insurance
Inventories held between processes to
make possible the independent control of two processes
A carrier document indicating that the
shipment was delivered once signed by the consignee. It's also
called delivery challan
Conditions in a contract relating to
carrier and routing , freight charges, place and time of
Delivery to point of use
Items delivered directly to the end user
bypassing the inspection process / route
A method of forecasting where a panel of
experts is polled repetitively in writing to develop a
consensus prediction of future environmental conditions
The sensitivity of demand to price
A fee charged by a carrier to compensate
for the detention of the carrier's equipment in excess of
allowable free time for loading, unloading , reconsigning or
stopping in transit
Derived from or contingent upon the
demand for another component or a finished product.
A complete description of an item such
as size, shape , capacity ,dimensions, tolerances etc.
A decline in the value of a country's
currency vis a vis the currencies of other countries
Differential Exchange Rates
Different exchange rates imposed by a
country's government , depending upon the nature of the goods
A security attachment to an electronic
message to verify the identity of the sender and enable the
receiver of the message to reply. Digital certificates are
issued by third parties known as certification authorities
Short units of
data bearing mathematical relationships to the data in the
document's content that are transmitted using public key
cryptography programs. These programs create a pair of keys
(one public key, one private key). And what the private key
encrypts only the public key can decrypt
These are costs that can be identified
with individual units of outputs. These costs are usually
treated as variable and do not include general overhead or
common cost allocations
Direct Materials Cost
Expenses for the materials that become
part of finished products, i.e raw materials , components etc.
A selling situation in which a supplier
offers similar or identical items for sale, in identical
quantities to different purchasers at different prices
The process of removal of inventory
items from an organisation's premises
A carrier service that permits changing
the destination or consignee of a shipment that is en route,
either with or without an additional fee. This is performed
only at the request of the owner of the goods
Dock to Stock
Goods and materials purchased from
certified suppliers that skip incoming inspection and go
directly into inventory upon delivery
Door to Door
Delivery of a good directly from the
consignor to the consignee's specified location
A lease agreement for a piece of
transportation equipment that does not include the provision
of fuel or crew for its operation. It's often found in the
During the fact control
Methods used to monitor and manage
quality during the production process
A tariff imposed by a government on
imported goods, exported goods, or the use of goods
The practice of selling a product
overseas at prices below those in its home market
The proactive compilation of requirements information
regarding demand (i.e., customers, sales, marketing, finance)
and the firm's capabilities from the supply side (i.e.,
supply, operations and logistics management); the development
of a consensus regarding the ability to match the requirements
and capabilities; and the agreement upon a synthesized plan
that can most effectively meet the customer requirements
within the constraints imposed by supply chain capabilities
The process of identifying, aggregating, and prioritizing,
all sources of demand for the integrated supply chain of a
product or service at the appropriate level, horizon and
The sales forecast is comprised of the following concepts:
1. The sales forecasting level is the focal point in the
corporate hierarchy where the forecast is needed at the most
generic level, i.e. Corporate forecast, Divisional forecast,
Product Line forecast, SKU, SKU by Location.
2. The sales forecasting time horizon generally coincides with
the time frame of the plan for which it was developed, i.e.
Annual, 1-5 years, 1- 6 months, Daily, Weekly, Monthly.
3. The sales forecasting time interval generally coincides
with how often the plan is updated, i.e. Daily, Weekly,
Monthly, and Quarterly.
Demand Planning Systems
The systems that assist in the process of identifying,
aggregating, and prioritizing, all sources of demand for the
integrated supply chain of a product or service at the
appropriate level, horizon and interval.
The triggering of material movement to a work center only
when that work center is ready to begin the next job.
It in effect eliminates the queue from in front of a work
center, but it can cause a queue at the end of a previous work
Techniques such as market research, surveys, focus groups,
and performance/cost modeling used to identify emerging
Demand Supply Balancing
The process of identifying and measuring the gaps and
imbalances between demand and resources in order to determine
how to best resolve the variances through marketing, pricing,
packaging, warehousing, outsource plans or some other action
that will optimize service, flexibility, costs, assets (or
other supply chain inconsistencies) in an iterative and
Demand Time Fence (DTF)
1) That point in time inside of which the forecast is no
longer included in total demand and projected available
inventory calculations; inside this point, only customer
orders are considered. Beyond this point, total demand is a
combination of actual orders and forecasts, depending on the
forecast consumption technique chosen.
2) In some contexts, the demand time fence may correspond to
that point in the future inside which changes to the master
schedule must be approved by an authority higher than the
master scheduler. Note, however, that customer orders may
still be promised inside the demand time fence without higher
authority approval if there are quantities
available-to-promise (ATP). Beyond the demand time fence, the
master scheduler may change the MPS within the limits of
established rescheduling rules, without the approval of higher
authority. See: planning time fence, time fence.
The concept of a continuously rotating wheel of
plan-do-check-action (PDCA) used to show the need for
interaction among market research, design, production, and
sales to improve quality. Also see: Plan-Do-Check-Action
In marketing, dividing potential markets by
characteristics of potential customers, such as age, sex,
income, and education.
The carrier charges and fees applied when rail freight
cars and ships are retained beyond a specified loading or
unloading time. Also see: Detention, Express Denied Party List
(DPL): A list of organizations that are unauthorized to submit
a bid for an activity or to receive a specific
example, some countries have bans for certain products
such as weapons or sensitive technology.
A physical characteristic of a commodity measuring its
mass per unit volume or pounds per cubic foot; an important
factor in rate making, since density affects the utilization
of a carrier’s vehicle.
A rate based upon the density and shipment weight
Revisions or complete elimination of economic regulations
controlling transportation. The Motor Carrier Act of 1980 and
the Staggers Act of 1980 revised the economic controls over
motor carriers and railroads, and the Airline Deregulation Act
of 1978 eliminated economic controls over air carriers.
Derived Demand: Demand for component products that
arises from the demand for final design products. For example,
the demand for steel is derived from the demand for
Ganging of smaller shipments to cut cost, often as
directed by a system or via pooling with a third party
The carrier charges and fees applied when rail freight
cars and ships are retained beyond a specified loading or
Models where no uncertainty is included, e.g., inventory
models without safety stock considerations.
A discount offered by a carrier that faces a service time
disadvantage over a route.
Electronically generated, digitized (as opposed to graphically
created) authorization that is uniquely linkable and traceable
to an empowered officer.
Direct Production Material
Material that is used in the manufacturing/content of a
product (example: Purchased parts, solder, SMT glues,
adhesives, mechanical parts etc. Bill-of-Materials parts,
Direct Store Delivery (DSD)/ Door Delivery
Process of shipping direct from a manufacturer’s plant or
distribution center to the customer’s retail store, thus
bypassing the customer’s distribution center. Also called
A calculation based on the available-to-promise figure in
the master schedule. For the first period, the ATP is the sum
of the beginning inventory plus the MPS quantity minus backlog
for all periods until the item is master scheduled again. For
all other periods, if a quantity has been scheduled for that
time period then the ATP is this quantity minus all customer
commitments for this and other periods, until another quantity
is scheduled in the MPS. For those periods where the quantity
scheduled is zero, the ATP is zero (even if deliveries have
been promised). The promised customer commitments are
accumulated and shown in the period where the item was most
recently scheduled. Also see: Available-to-Promise
Discrete manufacturing processes create products by
assembling unconnected distinct parts as in the production of
distinct items such as automobiles, appliances, or computers.
Discrete Order Picking
A method of picking orders in which the items on one order
are picked before the next order is picked.
The carrier activities involved with controlling
equipment; involves arranging for fuel, drivers, crews,
equipment, and terminal space.
Inventory that is geographically dispersed. For example,
where a company maintains inventory in multiple distribution
centers to provide a higher level of customer service.
Outbound logistics, from the end of the production line to
the end user. 1) The activities associated with the movement
of material, usually finished goods or service parts, from the
manufacturer to the customer. These activities encompass the
functions of transportation, warehousing, inventory control,
material handling, order administration, site and location
analysis, industrial packaging, data processing, and the
communications network necessary for effective management. It
includes all activities related to physical distribution, as
well as the return of goods to the manufacturer. In many
cases, this movement is made through one or more levels of
field warehouses. Synonym: Physical Distribution.
2) The systematic division of a whole into discrete parts
having distinctive characteristics.
Distribution Center (DC)
The warehouse facility which holds inventory from
manufacturing pending distribution to the appropriate stores.
One or more companies or individuals who participate in
the flow of goods and services from the manufacturer to the
final user or consumer.
Distribution On Demand (DOD)
The order fulfillment state a distribution operation
achieves when it can respond, closest to real time, to changes
in demand while shipping 100 percent customer compliant orders
at the least cost.
The planning activities associated with transportation,
warehousing, inventory levels, materials handling, order
administration, site and location planning, industrial
packaging, data processing, and communications networks to
Distribution Requirements Planning (DRP)
A system of determining demands for inventory at
distribution centers and consolidating demand information in
reverse as input to the production and materials system.
Distribution Resource Planning (DRP II)
The extension of distribution requirements planning into
the planning of the key resources contained in a distribution
system: warehouse space, workforce, money, trucks, freight
A warehouse that stores finished goods and from which
customer orders are assembled.
A program by which specific quality and
packaging requirements are met before the product is released.
Pre-qualified product is shipped directly into the customer's
inventory. Dock-to-stock eliminates the costly handling of
components, specifically in receiving and inspection and
enables product to move directly into production.
A receipt that indicates an export shipment has been
delivered to a steamship company by a domestic carrier.
Domestic trunk line carrier
An air carrier classification for carriers that operate
between major population centers. These carriers are now
classified as major carriers.
A route over which a carrier failed to provide service 5
days a week for 13 weeks out of a 26-week period.
A motor carrier operation involving two trailers being
pulled by one tractor.
Double Order Point System A distribution inventory
management system that has two order points. The smallest
equals the original order point, which covers demand during
replenishment lead time. The second order point is the sum of
the first order point plus normal usage during manufacturing
lead time. It enables warehouses to forewarn manufacturing of
future replenishment orders.
Referring to the demand side of the supply chain. One or
more companies or individuals who participate in the flow of
goods and services moving from the manufacturer to the final
user or consumer. Opposite of Upstream.
To take the title of the product but not actually handle,
stock, or deliver it, e.g., to have one supplier ship directly
to another or to have a supplier ship directly to the buyer’s
A motor carrier that has both common and contract carrier
Dual rate system
An international water carrier pricing system where a
shipper signing an exclusive use agreement with the conference
pays a lower rate (10% to %15) than non-signing shippers for
an identical shipment.
Selling goods below costs in selected markets.
The packing material used to protect a product from damage
Generally, any goods whose continuous serviceability is
likely to exceed three years (e.g., trucks, furniture).
Dynamic Lot Sizing
Any lot-sizing technique that creates an order quantity
subject to continuous re-computation.
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