Product Suite

Supply Chain Glossary - L

Supply Chain Glossary - L

lease

A rental agreement lasting an extended period.

A method of curve fitting that selects a line of best fit through a plot of data to minimize the sum of squares of the deviations of the given points from the line. See: regression analysis.

A dynamic lot-sizing technique that calculates the order quantity by comparing the setup (or ordering) costs and the carrying cost for various lot sizes and selects the lot size where these costs are most nearly equal. See: discrete order quantity, dynamic lot sizing.

A dynamic lot-sizing technique that adds ordering cost and inventory carrying cost for each trial lot size and divides by the number of units in the lot size, picking the lot size with the lowest unit cost. See: discrete order quantity, dynamic lot sizing.

The governmental restrictions placed on an organization regarding the goods and services provided by the business, for example, environmental regulations, export/import restrictions, safety regulations, and mandated deregulations.

Either a small shipment that does not fill the railcar or a shipment of not enough weight to qualify for a carload quantity rate discount.

Either a small shipment that does not fill the truck or a shipment of not enough weight to qualify for a truckload quantity (usually set at about 10,000 lbs.) rate discount, offered to a general commodity trucker.

An assurance by a bank that payment will be made as long as the sales terms agreed to by the buyer and seller are met. This method of payment for sales contracts provides a high degree of protection for the seller.

Every part or assembly in a product structure is assigned a level code signifying the relative level in which that part or assembly is used within the product structure. Often times the end items are assigned level 0 with the components and subassemblies going into it assigned to level 1 and so on. The MRP explosion process starts from level 0 and proceeds downward one level at a time.

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