Glossary

The means by which goods or materials are transported, such as trucks, trains, ships, and planes.

A material handling device that moves materials, packages, or items from one place to another. Most often used in warehouse operations.

Private business organizations that are owned and controlled by the people and businesses who use its products, supplies or services.

The use of two or more carriers of different modes to transport a shipment. Often done to improve efficiency or save money.

A capability or expertise of a business that is fundamental to its success and often provides a competitive advantage.

The critical capability that is central to a company’s competitive strategy.

Internal (not GAAP-compliant) managerial accounting system designed to evaluate company costs for the purpose of improving productivity and increasing profit.

The process of identifying, accumulating, and assigning costs incurred by activities and distributing them to appropriate accounts.

A business unit within an organization that does not generate profit but still costs money to operate.

In accounting, an event (one or more) that triggers a change in the cost of an activity such as the consumption of a resource, or that influences quality or cycle time.

In accounting, the review and explanation of the effects of cost drivers. Often used to improve quality, throughput, and reduce cost.

In accounting, the cost of a resource that is consumed by an activity. The concept is used in activity-based costing.

The control of actual or forecasted costs incurred by a business. Includes collecting information, reviewing, reporting, controlling, and monitoring costs.

The interrelationship between variables where a change in one affects the costs of other variables. A reduced cost in one variable may increase costs in another.

The difference between the cost actually incurred and the budgeted or planned amount of cost that should have been incurred.

Seller arranges and pays for transport of goods to the destination port but risk transfers from seller to buyer once the goods are loaded on board at the origin port.

The minimum return that would be necessary in order to justify undertaking a capital budgeting project. Includes the weighted cost of both equity and debt.

The missed profits companies associate with stockouts.

Seller is responsible for the cost, the marine insurance, and the freight charges on an ocean shipment of goods to the destination port. An Incoterm abbreviated CIF.

The total costs used to create a product or service, which has been sold. Includes direct labor, materials, and overhead. Excludes indirect costs such as marketing.

Weighs the costs associated with a decision against the benefits arising from that decision. Often used to decide whether to proceed with a course of action or not.

Professional organization with a mission to connect, educate, and develop the world’s supply chain management professionals throughout their careers.

A barter type of transaction between two or more parties in which goods or services are traded for other goods or services, instead of for money.

Tariffs or other duties that a government levies on imported goods to offset subsidies provided to the exporters of those goods.

The final destination for goods. Identifies the country of the customer or receiver of the goods.