Letter of credit, Logistics Management, Last In, First Out (LIFO)


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


The cargo carried in a transportation vehicle

Laid-down cost
The sum of the product and transportation costs. The laid-down cost is useful in comparing the total cost of a product shipped from different supply sources to a customer’s point of use.

Landed Cost
Cost of product plus relevant logistics costs such as transportation, warehousing, handling, etc. Also called Total
Landed Cost or Net Landed Costs
Last In, First Out (LIFO)
Accounting method of valuing inventory that assumes latest goods purchased are first goods used during accounting period

Lead Logistics Partner (LLP)
An organization that organizes other 3rd party logistics partners for outsourcing of logistics functions. Also see: Fourth Party Logistics

Lead Time
The total time that elapses between an order's placement and its receipt. It includes the time required for order
transmittal, order processing, order preparation, and transit.

Less-Than-Carload (LCL)
Shipment that is less than a complete rail car load (lot shipment).

Less-Than-Truckload (LTL) Carriers
Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points.

Letter of credit
An international business document that assures the seller that payment will be made by the bank issuing the letter of credit upon fulfillment of the sales agreement

Life Cycle Cost
In cost accounting, a product’s life cycle is the period that starts with the initial product conceptualization and ends with the withdrawal of the product from the marketplace and final disposition. A product life cycle is characterized by certain defined stages, including research, development, introduction, maturity, decline, and abandonment. Life cycle cost is the accumulated costs incurred by a product during these stages.

Logistics Channel
The network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods.

Logistics data interchange (LDI)
A computerized system to electronically transmit logistics information.

Logistics Management
As defined by the Council of Supply Chain Management Professionals (CSCMP): “Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.
Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers.

To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service.
It is involved in all levels of planning and execution—strategic,



operational, and tactical. Logistics management is an integrating function which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions, including marketing, sales, manufacturing, finance, and information technology.”

lean manufacturing

Lean Manufacturing is a methodology that focuses on the elimination of waste, and therefore increasing value for the end user.

letter of 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.


A company can put a contractual Lien on a debtor's property that is in their possession, which means they have the right to hold/sell the goods in the event of an unsatisfied debt.

For example, a shipping company may include a lien clause in their contract to the effect of the following:

'The Company will have a general lien on the property of the debtor which are in, or come into possession of the company. The Company has the right to sell the property at auction if the debt has not been satisfied within 14 days notice of exercising of the lien....."

life cycle costing

When looking to procure a Capital Item, Life-Cycle Costing helps determine the total cost of acquiring, operating, maintaining, and disposing the item.

liquidated damages

'Liquidated Damages'
is a pre-estimated rate that is enforced when a breach of contract occurs (eg: $5000 liquidated damages for each day over the deadline of a building project). This is displayed in a contract as a liquidated damages clause.

If the claim for damages is challenged in a legal process, the rate needs to hold up as a genuine estimation of loss/damages, otherwise it will be classed as a 'penalty'. 


In the Supply Chain field, Logistics is the transporting, tracking, warehousing, and managing of goods from its manufacturing source through to the end user.





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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