The incoterm CIF is when the supplier pays the costs,
insurance, and freight to deliver the goods to the port of
discharge. The buyer then assumes the costs for customs
clearance. CIF applies to sea-freight only.
You may find that the supplier has either factored the cost
into price of the goods, or will have the charges separately
on their invoice.
CIP and CIF
In short, they have identical meanings in practice, only
differing in their usage...
Insurance Paid To) Its appropriate usage is for all
other modes of transport except seafreight.
CIF (Cost, Insurance,
Freight) its appropriate usage is for sea-freight only.
In contract formation, Capacity could almost be
considered the 5th element, following the other elements of
Offer, Acceptance, Consideration, and Intention to Create a
Capacity is a person/company's ability or power to
enter into a contract. For example, a person under the age of
18 does not have the legal capacity to enter into a contract.
Officers and directors of a company would be assumed to have
the capacity to enter into contracts on behalf of their
company, but the capacity would diminish as you went further
down the chain of authority. For example, it is unlikely a
storeman or receptionist would have the legal capacity or
power to enter into a multi-million dollar contract on behalf
of their company.
Capital Expenditure (CAPEX) is the money spent in the
acquisition of a long-term (more than one accounting period)
For example, a fibre-optic cable company buys a machine for
their warehouse for reeling and de-reeling the cable.
When a business' spend is broken down into categories, and
these categories are managed as their own strategic business
unit, this is known as Category Management.
Category Managers perform activities within their
unit such as implementing commercial arrangements, data and
demand analysis, strategic sourcing, reducing total cost of
ownership, and more.
Categories vary from industry to industry, but if we look
at the mining industry for example, categories could include:
Underground Equipment, Plant Equipment,
Mining Services, Mining Projects, Materials Handling,
Transport, IT, Facilities...
certificate of origin
In importing/exporting terms, the Certificate of Origin
is a document approved by certain authorities (eg: Chamber of
Commerce) to certify that the goods contained within a
shipment are of the declared origin.
Cloud Computing allows a company to have all of
their Procurement applications (eg: ERP system, Desktop
Applications) and other data (contracts, tenders, emails,
folders) provided as an online service from anywhere with an
internet connection (computers, phones, tablets etc), through
off-site dedicated servers (known as a cloud).
For example, a Procurement Officer starts a new job at a
company that uses cloud computing. To use the ERP System, the
officer is simply given a login/password to the 'cloud', and
is up and running. There is no need for time/cost wasters such
as software installations, software upgrades, license
requests, on-site servers etc, as it is all delivered as a
service (usually subscription) from a cloud computing
provider, through an internet protocol.
Upgrades to computer speed and technology is also required
less due to the majority of burden being bared by the cloud
servers. Current concerns with cloud computing include privacy
and security of information.
A Co-Destiny supplier relationship is where two
companies align their destinies for mutual benefit, to the
point where they will both succeed or fail together.
Consideration is a vital ingredient in the formation of a
contract, and is essential for it to be binding. If another
party makes a Offer/Promise (eg: to supply a service), the
Consideration is the price at which you buy the Offer/Promise,
which is in most cases a dollar value.
As a silly and basic way of explaining, here is a story to
John promised his neighbor Frank that he would clean his
car on the weekend, and Frank accepted this offer. A week
passed and John still hadn't cleaned the car. Angrily, Frank
knocked on John's door and yelled "You promised to clean my
car and you didn't! I'm taking you to court!" John replied,
"By law of contract formation I didn't have to, because there
was no consideration (eg: money) coming from you to bind the
verbal contract, (not to mention there was no intention to
create a legal relationship)".
Consumables items are goods that are 'used up', and in the
process lose their identity and/or are 'destroyed' in the
Examples of consumables include workshop rags, printer
cartridges, nuts and bolts, paper etc.
Cost Avoidance is the actions taken by a Procurement
professional to avoid future costs. It is less tangible than
direct cost savings.
An example of Cost Avoidance is locking in material
rates with a supplier to avoid a future price increase.
Another example is negotiating free freight with a supplier to
avoid future freight costs.
In contract law, the rule of 'Contra Proferentum'
asserts that when a contract term is ambiguous, a court will
interpret it to the disadvantage of the party attempting to
rely on it.
contract management main stages
Contract Management can be split into two stages.
Upstream: the activities that occur leading up to
the awarding of the contract, and Downstream: the
activities that take place after the contract is awarded.
Corporate Governance is the systems, policies, structures, and
processes that inform a business day-to-day direction and
cost reimbursement fixed price
In Construction Procurement, there are two main payment
methods utilized in contracts. These are Cost Reimbursement
and Fixed Price. Cost Reimbursement is charging
the client for the true costs as they incur on the project,
and Fixed Price is a cost worked out before starting a
job, and is based on an estimation.
cubic weight vs dead weight
When you are freighting a package, remember that transport
companies can charge you on either the dead weight of the
package, or the cubic weight, whatever is the greatest. The
dead weight is how much the item weighs if you were to put it
on the scales, whereas the cubic weight takes into account the
size of the package.
For example, if you were freighting a small pallet of cable
that weighed 60kgs, and the dimensions were 1.1m (length) x
1.1m (width) x 0.5m (height), and the freight company's
multiplier rate was 250.
Dead Weight = 60kgs
Cubic Weight = 1.1m x 1.1m x .5m = 0.605.
0.605 x 250 = 151.25kg
Therefore you would be charged based on 151.25kg, which is a