Materials Management Vocabulary

 

Materials Management has a language of its own. It has numerous terms knowing which communicating among the interested parties becomes easier. Practitoners of this profession, in any capacity, will find the terms and their explanation useful. Below are given the alphabetical series and each series contains many professional terms. Click the series letter to get the terms starting with that letter. You are welcome to suggest more terms so that the same can be put here for the benefit of others too.
 

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ABC Analysis
Applied in the context of inventory, it's a determination of the relative ratios between the number of items and the currency value of the items purchased on a repetitive basis. 10-20% of the items ('A' class) account for 70-80% of the consumption, the next 15-25% ('B' class) account for 10-20% of the consumption and the balance 65-75% ('C' class) account for 5-10% of the consumption. 'A' class items are closely monitored
ABC Inventory Control
An inventory control approach based on the ABC volume or sales revenue classification of products (A items are highest volume or revenue, C—or perhaps D—are lowest-volume SKUs)
Absolute Advantage
A competitive strength enjoyed by a party as a result of a natural endowment or other natural gifts that other parties do not have
Acceptance
The intentional indication of an offeree to be bound by the terms of an offer
Acceptable Sampling Plan
In quality management, a specific plan that indicates the sampling sizes and the associated acceptance or non-acceptance criteria to be used.
Acceptance Testing
A statistical quality control technique used to evaluate the overall condition of a given lot by inspecting only a sample, drawn randomly from the lot
Accessorial Charges
Costs that carriers usually charge in addition to the transportation cost. They include single shipment, inside delivery, loading ,unloading , notification and storage and redelivery charges.
Accessibility
The ability of a carrier to provide service between an origin and a destination.
Administered Price
A price determined by certain policies rather than by the competitive forces of the marketplace. For example, prices of sugarcane etc. in India is determined by the government rather than the market forces of demand and supply
AD Valorem Rate
Customs duty charged in terms of percentage on the value of goods that are dutiable, irrespective of quality, weight, or any other considerations. The ad valorem rates of duty are ascertained from the invoice
Activity Based Costing
A method for calculating indirect costs, based on the activities that drive cost. This is in contrast to the classical accounting methods which pool and arbitrarily allocate indirect cost
Accounting System
The grouping of records and procedures that find out, record, classify and report information about the financial position and operations of an organisation
Acculturation
The process of becoming familiar with another culture. It helps in conducting transnational businesses
Acknowledgement
A written communication used to inform the buyer by the supplier that the supplier has accepted the purchase order placed on him. An acknowledgement thus creates a bilateral contract as long as the terms of the acknowledgement are not significantly different from those of the purchase order
Acquisition Cost
Acquisition costs are the total costs associated with the acquisition of a material. Such costs include costs towards ordering, transportation, handling , inventory holding etc. It is noted in the context of the Economic Order Quantity (EOQ)
Acquisition Process
The sequential activities involved in obtaining necessary inputs for an organization is the Acquisition process. It includes determination of need, communication of need, identification of potential sources, invitation and consideration of bids, placement of the Purchase Order, receipt and inspection and making payment
Advance Payment
Payments in advance of delivery for a mutually agreed amounts or for specified percentage of the purchase price that buyer shall pay to the seller
Advance Shipping Notice
A standardized Electronic Data Interchange form detailing an inbound shipment to a receiving location (consignee)
Advanced charges
The amount of freight or other charges on a shipment advanced by one carrier to another, or to the shipper, to be collected from the consignee
Agency
It's a legal entity denoting the legal relationship that exists between two parties by which one is authorised to perform or transact specified business activities for the other
Agent
A person or an organisation authorised to act for another person or organisation in dealings with a third party.
Air Waybill
A document used for shipment of air freight by national and international air carriers and declares therein  the commodities shipped, shipping instructions and shipping costs.
Anticipated Inventories
Those stocks that are accumulated for a well defined future need. they differ from buffer (safety) stocks in that they are committed to specific future plans
ASP
Application Service Provider is an organisation that provides software applications over the internet.
Application Package
A system of programs designed to assist in specific applications
Approved list
It is a list of vendors maintained by an organisation for those vendors which meet the set criteria of the organisation for supply of materials and/ or services. It's also known as list of registered vendors
Arbitrage
It implies purchasing a security , commodity or currency in one market with the intention of financial gain. In international currency transactions, profits can be made by simultaneous buying and selling one or more than one currency. In arbitrage it's the aberrations in the market that is taken advantage of
Arbitration
A means of settling disputes between parties in which an outsider acts as a an arbitrator who acts as a fact finder and decision maker. The parties agree to abide by the decision of the arbitrator
ASEAN
Association of Southeast Asian Nation is an organisation formed in 1967 to promote economic growth, social progress, cultural development and peace in southeast Asia. Member countries include Brunei, Darussalam, Cambodia, Indonesia, Laos, Malayasia, Mayanmar, Phillipines, Singapore, Thailand and Vietnam
Assignment
A transfer of a right or title to another party. It is commonly used with a bill of lading that involves transfer of rights, title and interest by means of endorsement. Such endorsement gives, to the party named, the title to the property covered by the bill of lading
 

 

 

 

 

 

 

 

 

 

 Get terms alphabeticallyA B C D E F G H I J K L M N O P Q R S T U V W X Y Z

 

 

 

 

 

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