Decentralized Purchasing, Demurrage, Direct Materials Cost, Dock to Stock

 

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Detailed terminology list , in pdf form, will soon be available

 
 

Damages
Compensation for loss or injury suffered by one party to a contract as a result of the other party's breach

Dangerous Goods
It implies the hazardous goods and is used extensively in international trade

Decentralised Purchasing
It refers to purchasing by many agencies within an organisation rather than one central agency looking after all purchasing

Declared Value
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  Decoupling Inventories
Inventories held between processes to make possible the independent control of two processes

Delivery Receipt
A carrier document indicating that the shipment was delivered once signed by the consignee. It's also called delivery challan

Delivery Terms
Conditions in a contract relating to carrier and routing , freight charges, place and time of delivery

Delivery to point of use
Items delivered directly to the end user bypassing the inspection process / route

Delphi Method
A method of forecasting where a panel of experts is polled repetitively in writing to develop a consensus prediction of future environmental conditions

Demand Elasticity
The sensitivity of demand to price changes

Demurrage
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

Dependent Demand
Derived from or contingent upon the demand for another component or a finished product.

Design Specifications
A complete description of an item such as size, shape , capacity ,dimensions, tolerances etc.

Devaluation
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 imported

Digital Certificate
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

Digital Signature
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

Direct Costs
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.

Discriminatory Price
A selling situation in which a supplier offers similar or identical items for sale, in identical quantities to different purchasers at different prices

Disposal
The process of removal of inventory items from an organisation's premises

Diversion
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

 
 
 
 
DIFOT

In Logistics, D.I.F.O.T. stands for Delivery In Full On Time. It is a KPI measurement of a supplier's delivery performance.

For example, a Purchasing department may run regular DIFOT reports to measure the performance of suppliers' deliveries to their warehouses.

Freight companies in particular like to use their DIFOT percentage (eg: 98% DIFOT) to win over potential customers.

Some also offer a DIFOT report so customers can see how many of their deliveries are being 'delivered in full and on time'.

direct charge

Direct Charge Purchasing refers to the purchasing of non-inventory items. These purchases bypass the inventory and go directly onto the cost of a project/job/repair etc.

For example, a warehouse officer at a mining site raises a requisition for a hose assembly which is not in the inventory system. The Purchasing Officer responsible for direct-charge purchasing would need to source and order the item.

The opposite of direct charge purchasing would be inventory/stock purchasing.

Direct Procurement

Direct Procurement is the procurement of goods/services that are directly related to the 'product' being manufactured/resold.

For example, with an engineering firm designs and builds hydraulic pumps, the direct procurement spend would include the machined parts, check valves, pulse timers, casings etc, that go into the pumps.

On the other hand, Indirect Procurement is the procurement of goods/services that are not directly related to the 'product'.

Using the previous example, the indirect procurement spend would include consumables (rags, gloves, earplugs), lubricants, testing equipment etc

documentary credit

In international trade, a Letter of Credit document is an irrevocable promise of payment, and its purpose is to lower the transaction risk between the buyer and the seller, by the exchanging of approved documents.

As an example of the process:

An Australian company orders $80000 of computer cable from China.  After agreeing on terms and conditions, the Australian company applies to their bank for an irrevocable letter of credit, who then send the approved credit documents to the seller's bank. 

The seller's bank then advises the seller of the approved letter of credit. The goods are shipped in exchange for a bill of lading, which the seller presents to their bank.

Upon receiving the bill of lading, the seller's bank pays the seller; the buyer's bank reimburses the seller's bank; and the buyer's bank debits the buyer.  The buyer then receives the original documents (including the original bill of lading), so they can collect their cable.

Downstream

Where Upstream is the business activities at its initial stages leading up to production, Downstream refers to business operations and activities in the later stages, closer to the point of sale.

For example, in the natural gas industry, Downstream includes the refining, distribution, marketing, storage, and transportation activities.

duress

In Contract Law, what is meant by the terms Duress and Undue Influence? Simply, Duress is when someone is pressured into a contractual agreement, and Undue Influence is when someone is tricked into a contract. If a court finds there has been Duress and Undue Influence, they can void the contract.

 
 
 

Get terms alphabetically:  A 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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