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Glossary of Purchasing and Warehouse Inventory Terms

Standard Terminology and Definitions Relating to Purchasing and Warehouse Inventory Systems

Access Space-An aisle used to gain access tofacings, slots or stacks. Accountable Stock-Materialsdesignated for inventory and some control of issueand/or access. The responsible agent determines level

of accountability.

Active Block-A uniform block after one or moreelements have been removed, i.e., a block that isbeing worked.

Address-A number, or a combination of numbersand/or letters, used to designate a particularwarehouse location facing or slot.

Administrative Code-A regulation or rule having theeffect of law and promulgated by an agency to make alaw specific. Such regulations are subject to

Legislative approval prior to enactment.

Advice of Shipment-Notification to the purchaser thatshipment has been made. Agency-A department oradministrative division of a government authorized totransact certain business.

Agent-An individual authorized by an administrator orsuperior to perform as in public procurement.

Agreement-A bargain between parties in dealing withone another such as may be applied in procurement to

define terms and performance.Aisle-Any passageway within a storage area.

All-Or-None Bid-An invitation to bid for more thanone, or a list of items or services for which a partialaward would not be made.

Alternate Bid-(1) A bid offering alternative goods orservices. (This type of offer may suffice whenrequirements may be met with various items orservice. (2) A bid submitted which offers goods orservices in substitution of those requested. Such an

award would be considered only if the bid conditionsallow and if the offer is acceptable.

Alternative Request for Proposals -A Request forProposals inviting innovative proposals which wouldmeet the needs of the using agency(ies).

Antitrust Legislation-Laws(s) enacted to preventnoncompetitive trade, supply monopolies or marketcontrol by a limited number of producers.

Appropriation-A Legislative designation of a budgetor funding which may only be expended for a certainpurpose.

Approved Brand or Equivalent Specification-Aspecification referencing a certain brand and model ofa product that meets the quality and performancesrequired. This type of specification may allow biddingof other manufacturer's brands which comply with thestandards called for. Also, known as a "QualifiedProduct".

Approved Brand Specification-A specification

referencing a brand and model or certainmanufacturer's product. This specification does notallow equivalent brands.

Arbitration-A process to resolve a dispute betweentwo parties by a decision presented by one or moredisinterested and uninvolved parties.

Archival Quality-Paper products manufactured towithstand a specified time period retaining a requiredintegrity of the original characteristics.

As Is-An indication or notice that the seller of goodswill not be responsible for the condition or performanceif the purchaser accepts them.

Assignment -A subcontract or a transfer of claims,rights or interests of goods, services or property.

Authorized Price List-A list of goods or servicesresulting from a contract which provides agreed uponprices and the necessary information to place orders.

Award-A notification that a bid or proposal isaccepted.

Back-Door Selling-Enticements by vendors foragencies to purchase goods or services withoutseeking competitive offers or bidding.

Back-Order-An unfilled request for issue ofwarehouse stock. The term requires the generation ofa purchase order for stock replenishment if not already

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ordered. Back-order filling is a matter for policystatement.

Bale-Compressible articles or material assembled in ashaped unit and usually bound with cord or metal tiesunder tension. May be wrapped in paper or textilematerial or combinations thereof.

Bay-Designated area within a section of a storage

area, or a shop, outlined by marking on columns, postsor floor. Usually, a specific area within a section, suchas 20' x 20' squares. Best Interest of the State (orPolitical Subdivision-A procurement action taken whenacceptance of a superior offer is made and a definiteadvantage is determined.

Bid Award File-A fi le maintained on certain bidders orcommodities to provide comparable information forfuture bidding or to indicate if collusion may beexpected.

Bid Bond-An agreement by a third party financier that

a certified amount of money is insured and payable if abidder refuses to accept a contract.

Bid Deposit-The deposit of a specified amountsubmitted by a bidder to a purchaser which would beforfeited should the bidder fail to accept the contract ifawarded.

Bid Opening-The timely process of opening bidsmade to an invitation and making them available toreview for the first time.

Bid Sample-An exact example of a product offered bya bidder as a requirement. Such samples may becompared and/or tested to determine compliance withbid specifications.

Bidders List (or Vendors List)-A list of vendorsmaintained by a purchasing agency designatingsources for certain goods and services that would berequired by bid solicitation.

Bill-See Invoice.

Bill of Lading-A document by which a transportation

line acknowledges receipt of freight and contracts forits movement.

Bill of Materials-A listing of materials required by asupplier to complete or produce a specified productrequired by an agency (as required by certain bids or aRequest for Proposal).

Claim-A demand for compensation due to non-compliance, damages or injury as authorized bycontract or Law.

Client Agency -A using agency benefiting by apurchase made or a contract established by aprocurement administration.

Code of Ethics-A written publication of behavioral

aspects required of appointed, elected or individualsunder the employment of a jurisdiction. Collusion-Analliance between bidders or persons designed tointerfere with just accomplishment of a purpose or afair opportunity to bid.

Column-Two or more units tiered on top of oneanother.

Commercial Law-Law regulating Commerce andtrade activities. Such Laws provide direction forpurchasing personnel as well as suppliers. Reference"Uniform Commercial Code".

Commodity-Any tangible item of property purchased,leased or otherwise obtained by the State and itsagencies. Includes deferred payment interest onpurchase of tangible personal property and letting ofpublications upon contract. Commodity does notinclude goods/property purchased for resale.

Competitive Quotations-A purchasing method usedto obtain competitive pricing for goods when theanticipated cost is less than the amount required forformal or competitive sealed bids. This method is usedonly for small purchasers and should be documented

or recorded by written statements from the suppliers.

Competitive Sealed Bidding-A method of acquiringgoods above a certain dollar amount when varioussources are available. This procurement processallows for levels of quality, terms and conditions to bedefined while obtaining competitive pricing.Competitive Sealed Proposals-A method ofestablishing a contract for source selection by issuinga request for competitive offers whereby negotiationand changes in the offers may be allowed to securethe most advantageous and cost effective terms forthe purchaser.

Confidential Information (also, ProprietaryInformation)-Any information conveyed to a publicemployee, due to position in the procurement process,by a manufacturer of firm such as, product testing ortrade secret which would not be available as generalknowledge.

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Conflict of Interest-Interests or involvements that apublic employee or a commerce representative mayhave which would weaken a decision process and notbe fair and impartial to business negotiations.

Contaminant-A term used in the paper making orrecycling meaning any undesired substances such asfood, food containers, plastics, metal, ink or siliconwhich may degrade the end product.

Contingency-An allowance made to provide for orprotect desirable conditions in the future. Suchconditions that may be threatened by causes or eventsunforeseeable in the future.

Contract Administration-The management andmonitoring of legal agreements to ascertain that thecontractor's commitments to the purchasing entity arebeing fulfilled according to contract.

Convenience Termination Clause-A condition statedin a contract that allows the purchasing entity to cancel

the agreement partly or entirely and settle any validclaims with the contractor as appropriate andaccording to the conditional clause.

Converter-A manufacturing firm which constructs fromone usable material a product to be used for a differentpurpose. For example: processing sheet or roll papersto manufacture envelopes.

Cooperative Purchasing-The assessment ofconsumer needs between government agencies inorder to centralize a procurement process. Thisendeavor would contribute to a reduction of

administration as well as provide lower costs byvolume purchasing.

Cost of Money-The amount of interest that would beearned if the dollar value of inventory were invested atthe State's current investments earning rate.

Course-A single layer of units making up a unit load.Also tier.

Course Pattern- The arrangement of a group of unitsin a course (See uni-block multi-block pinwheel andirregular patterns).

Crate-A rigid shipping container of framed constructionjoined together with nails, bolts, or any equivalentmethod of fastening. The framework may or may notbe enclosed with sheathing.

Credit Transaction-The return of a commodity toinventory from a cost center, increasing the value ofinventory and restoring budget dollars to the cost

center. Only allowed for commodities that are unusedand usable for the intended purpose (i.e. have notexceeded the manufacturer's recommended use dateor expiration date).

Critical Stock-A commodity that must be maintainedin inventory, though little used, to respond toexpressed need. These commodities do notnecessarily meet the criteria to be classified as

emergency stock but are required to keep equipmentor programs operating.

Cross Aisle-A passageway at right angles to mainaisles, used for the movement of supplies, equipmentand personnel.

Cross Stacking- The placing of a layer of containersat right angles to those just below to increase thestability of the stack.

Cross Tie-Cross layers of supplies as in crossstacking except that only an occasional layer is

crossed and not every other one.

Crossdocking-The acquiring of commodities by adistribution center using just-in-time scheduling, sothat products can be moved from the receiving areathrough staging, and onto a transport vehicle withoutever having to be put away.

Cube Utilization-The ratio determined by counting thetotal cubic feet of materials stored in the warehouseand expressing this number as a percentage of thetotal cubic dimensions of the warehouse.

Custodian-In the sense of inventory control, theperson responsible for the custody and distribution ofstoreroom or warehouse stock.

Customer Service Level-The minimum level ofsupport deemed acceptable by the warehouseoperations management. Includes the availability ofstock items when required and in the quantity required.

Cycle Count - The systematic counting of a portion ofthe total inventory on a periodic basis, such that allinventory lines are counted and reconciled in thecourse of a complete fiscal year.

Default -Non-Compliance of a firm to provide goods orservices according to contractual terms.

Defect -A regularity or non-conformity which is notallowable by specifications.

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Degradable (As bio-degradable)-A product which willundergo a process of deterioration. The degradingprocess of bio-degradable items must be adeterioration unaided by the addition of chemicals orapplication of other destruction measures.

Deinking-A process of removing ink or toner fromprinting and writing papers in order to reprocess andrecycle.

Delivery Terms-A contractual designation of locationof delivery, the time of delivery and shipping costs.

Delivery Time- The time during the day and for thedays of the week, during which the receiving unit willspot and unload trucks and rail cars.

Demurrage-An assessment against the shipper orconsignee as a penalty for the detention of a commoncarrier's equipment beyond the period of free timeallowed for loading or unloading.

Descriptive and/or Technical Literature-Informativeproduct information. Designs, pictures, charts,illustrations, descriptions and technical parameters aswould be necessary to evaluate the bid specificationrequirements.

Design Specification- A generic specification whichwould describe a particular configuration. A method oftesting or inspection may be included.

Discount Schedule-A price listing based uponquantity selections of items. Savings realized byincreased volumes.

Disposition (Surplus Property)- The disposal ofgoods and inventory that are in excess or longerrequired. Methods of transferring, trading in or sellingsuch items are commonly used.

Dock Leveller-A hinged bridge between the docksurface and different load bed heights of vehicles.Levellers automatically adjust to different vehicleheights and the rise of vehicle springs as it isunloaded.

Drive-In Rack-A structural framework open at the frontand blocked at the back by cross bracing. The shelvesconsist of rails connected to the uprights. Warehousingunits may be placed two or more rows deep byentering the rack from the front and driving the fork lifttruck between the rails. Careful consideration shouldbe given unit clearance requirements, both vertical andhorizontal.

Drive-Through Rack-Similar to drive-in rack exceptthat the cross bracing is distributed across the top ofthe rack structure, thus permitting the fork lift truck todrive through the rack structure from one side to theother.

Dunnage-Any material, such as boards, planks,blocks, or metal bracing, used in transportation and instorage to support and secure supplies, to protect

them from damage or for convenience in handling.Economic Order Quantity (EOQ)-A level of quantityor inventory indicating that a re-order to replenishshould be made in order to maintain or control a safeinventory.

Emergency Purchase-A purchase made whenunpredictable needs must be met. This type ofpurchase is most often made when health, safety orconservation risks are imminent or when otherimperative needs arise.

Emergency Stock-The quantity of a commodity thatmust be maintained on hand at all times to provide forinitial response to an unplanned catastrophic event.

End-Use-Commodities delivered to a using locationand no longer accountable as inventory. End-useitems may also be subject to issue control at the usinglocation.

End-Use Stores-Merchandise purchased for theexclusive use of a specific cost center which pays forthe commodity on delivery to the warehouse. Thematerial is then kept in inventory for the convenience

of the purchasing cost center and is not chargeable tothe inventory general ledger or any trust account.

Equal Employment Opportunity-A priority to hiredisadvantaged or minority persons in the workplace.

Equal or Equivalent-Terms to indicate that similarproducts or other brands may be acceptable forpurchase if specifications are comparable andfunctional requirements are proven.

Equipment Maintenance and Depreciation-Actualamount of depreciation based on acquisition cost anduseful life and actual maintenance costs.

Evaluation Committee-An appointment of advisorsand information examiners to assist in thedetermination to award a contract.

Expediting-Following up on orders placed to insuretimely shipment and delivery. Requires communicationwith shippers and carriers on a routine basis.

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Express Warranty-A promise made by the sellerrelating to quality, performance or other considerationswhich would encourage a decision to purchase.

Extension-A contract condition that provides for anoption to continue the contract to a later date shouldadditional time be needed, after the expiration date, tosolicit competitive bids and establish a new contract.

Fair Market Value-A price that would be acceptableon the open market for items or property of equivalentcomparison.

Field Purchase Order-A document used to ordergoods from a supplier for purchases limited to acertain dollar amount with purchasing authoritydelegated by a central procurement off ice.

Finger Dock-A raised loading dock set at an acuteangle of 80 degrees plus, so that trucks can be eitherside-loaded or end-loaded in the conventional manner.

Fire Aisle-A passageway established to aid in fightingor preventing the spread of fire or for access to firefighting equipment.

Firm Bid-A bid may that constitute a contract with adefinite expiration date.

Fixed-Price Contract-A contract requiring that pricesremain firm. During the term of such contracts thecontractor must absorb any increases which wouldreduce the profit.

Fixed-Price Contract with Economic PriceAdjustment-A contract which allows price increase orreductions. The price increases should be based on aperiodical percentage or an allowable index stated inthe contract.

Fixed Price Sale-A sale that is firm; cannot benegotiated.

Fixed Slot-A slot reserved for a specific stock keepingunit.

Floating Slot-A slot that becomes available for any

stock keeping unit just as soon as it is empty.

Floor Slot-Space occupied by a column or stack in ablock.

Forecasting-The systematic development of anestimated future requirement determined from pastexperience, usage trends, technology advances,

planned activity and any other factors deemedrelevant.

Formal Advertising-A legal notification made publicto advise that a government agency is requesting bidswith a certain intention of purchase. Such advertisingmay be placed in newspapers or other publicationsmeeting legal requirements.

Forward Procurement-Purchasing in larger volumeswhich exceed current needs. A method used whenitems may sometimes be in limited supply orunavailable; or to realize volume discounted pricing.

Fuel-Actual cost of fuel for material handlingequipment and delivery vehicles.

Functional or Performance Specification-Aspecification which would place emphasis ondescribing a result or capability to be accomplished bya commodity or service. A method of inspection ortesting may be included.

Goods-An purchase which does not include realestate, real property or services.

Goods Purchased For Resale-By definition impliesthat goods are intended to make a profit. Thisdefinition does not include raw materials purchased byan agency for conversion to a finished product with theintent to recoup cost of materials and overhead only.

Guarantee-A warranty or statement of performanceassurance, quality standards or other promises relatedto a purchase.

Honeycombing-Condition resulting from thewithdrawal of warehousing units from a uniform block,producing an active block.

Horizontal Occupancy Ratio-Ratio of exposed floorspace in the occupiable space to floor space occupiedby warehousing units.

Horizontal Separations-Space consumed by palletsin a column or unit clearances in racks, bins andshelves. Also space consumed by beams, rails

shelves or other horizontal supports.

Identical Bid-A bid which is essentially the same asanother with regard to products bid.

Ineligible Bidder-A non-responsible bidder or asupplier who has demonstrated a poor record ofperformance or proven to be financially unstable.

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Otherwise a bidder who has been removed from theprospective vendors list for non-compliance.

Informal Bid-A telephone quotation or an unsealedpricing offer. A bid for a purchasing intention that isless than the dollar amount required for formal sealedbids.

Inspection Report-To inform a procurement entity

that an examination or testing of commodities oncontract has taken place. Such a report would furtherinform the authority of the quality or condition of suchgoods.

Interlocking Load Pattern-A method of arrangingevery other course in a unitized load to stabilize theload. Every other course is turned 90 degrees whenuni-block patterns are used. Every other course isreversed using multi-block, pinwheel or irregularpatterns.

Inventory-(1) The aggregate of all commodities in

stock at a given time. (2) The quantity of a givencommodity on hand at a point in time. (3) Also used todescribe the function when the storeroom stock iscounted and reconciled.

Inventory Error-(1) Net Error (net book to physicaldifference): expressed as dollars or percent ofinventory using the sum of all inventory loss and allinventory gains. (2) Absolute error: the sum of allerrors without regard to sign. May be expressed as apercentage of inventory or in dollars as appropriate.

Inventory Turnover (AKA Turnover, Turnover Rate,

Stock Turn)-The mathematical determination of thenumber of times there has been a completereplacement of inventory stock in a years time.Usually determined on a dollar value basis.

Invoice (Bill) -A list of charges or costs presented bya vendor to a purchaser, usually enumerating theitems furnished, their unit and total costs, and astatement of the terms of the sale.

Issue-Deliver to user.

Latent Defect-A flaw, defect or condition notobservable at the initial inspection but obviouslyoccurring over a period of time.

Lead Time-Time from date of inventory review orrequisition date to delivery date, usually expressed asan average.

Lease Agreement-A contract to make periodicpayments for the use of a property for a certain length

of time. Such rentals may include additional variableuser costs which cannot be predetermined such ascost per copy when leasing copiers.

Lease-Purchase Agreement-An agreement wherebythe periodic payments may also be applied asinstallments toward ownership of a property if theleaser decides to assume the option to own. Suchoptions may be stated as a purchase option or a

conditional sales contract.Legal Notice-Advertising in newspapers or otherlegally acceptable publications. May include publicposting of an intent to award a contract.

Let Down-Handling a unitized load from its position inthe stack or storage rack down to a location wherepartial withdrawals can be made.

Liability and Fire Insurance-Actual cost of insurancecoverage for the warehouse and warehouse functions.

License-A permission granted by government to aperson or to business owners to participate in aparticular type of enterprise. Such enterprises whichwould be regulated by law.

Life Cycle Costing-The total cost of owning aproperty for a designated period of time. The timeperiod is usually based upon need or the expected lifeof the property. This is a purchasing method that takesinto account all expenses of ownership such as:Purchase price, maintenance, operating costs andremaining value at the end of ownership.

Line Item-A listing of items in a bid for which a biddermay be expected to provide separate pricing. Whensuch itemization is required individual or separateawards may be made on certain items.

Loading Area-The surface or plane on which a courseis laid. The surface may be the floor or a pallet. Whenthe loading area used is a pallet or platform, the planemay be larger than the pallet or platform surface. Forexample, a pallet surface measuring 48 x 40 inchesmay carry a load measuring 49 x 41 inches. In thiscase, the loading area is considered to be the plane.

Loading Area Efficiency-The percentage of theprescribed loading area occupied by the containers inthe first course.

Locator System-A record which shows the exactlocation of supplies within a storage activity.

Lot-A stock keeping unit that must be stored apartfrom other like stock keeping units. Multiple lots of the

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same stock keeping unit produce excessivehoneycombing of the storage space unless the lots arelarge. One of the hidden costs of warehousing.

Main Aisle-A passageway wide enough to permit theeasy flow of equipment, supplies, and personnel; itgenerally runs the length of the building.

Manufacturer-One who produces a product through

assembly or combination of raw materials orcomponents. In some instances the manufacturer maynot engage in the production except to control andspecify the method and design of the item.

Market Place-The commerce sources whichdetermine availability of goods and services and thecosts that are derived from the rate of trade with thosesources.

Materials Management-The planning of acquisition,maintaining inventory and disposition. This process isbased upon scheduling according to need and

anticipated usage.

Medium Lot Storage-A medium lot is generallydefined as a quantity of material which will require oneto three pallet stacks stored to maximum height. Thus,the term refers to relatively small lots as distinguishedfrom definitely large or small lots.

Merit System-The system of employee promotion thatis based upon an evaluation of abilities andaccomplishments rather than personal favoritism orpolitical appointment.

Mill Broke-Waste paper that is generated in the papermanufacturing process and then recycled orintroduced again into the development or repulpingprocess.

Minimum Inventory-The amount of stock on handthat has been designated as safety stock.

Minority Business-A business that is owned orcontrolled by a person or persons who are certified tohave minority status.

Monopoly-An unfair advantage or control of themarket place with regard to the trade of certain goodsor services. This type of exclusive marketingadvantage serves to restrict competition in thatparticular activity.

Multiple Award-Awarding contracts to more than onebidder for the same types of goods or similar items.This would be appropriate under circumstances when

a single contractor would not be able to adequatelyserve the entire area that needs to be provided for.

Multi-Block Course Pattern-An arrangement ofwarehousing units in which two uni-block patterns areused.

Multi-Step Competitive Bidding- A competitivepurchasing method requesting that bidders submit a

technical proposal as the initial process. Negotiationsmay take place with regard to technicalities and jobcompletion processes. Following the first step acompetitive price bid is requested. The price bid is notnegotiable.

Negotiated Sale-An offer without a fixed price. Theowner withholds the right to accept or reject offers.

Net Price-The remainder of the amount after anydiscounts have been subtracted.

No Bid-A bid reply indicating that the vendor chooses

not to bid.

Non-Recyclable-A substance which cannot beintroduced as usable for remanufacturable material.

Non-expendable Inventory- Any tangible items with ashelf-life or usefulness beyond one year and costingover a certain dollar amount.

Non-responsive Bid (also, unresponsive)-A bid oroffer that does not comply with the requirements asstated.

Obsolescence or Obsolete-Goods that are no longerusable for their intended purpose through expiration,contamination, or change of need.

Occupiable Space-The space remaining in thewarehouse for storing warehousing units afterallocating space for service aisles, access aisles, andother utility space.

Occupied Space-Occupiable space actually occupiedby warehousing units or other warehousing elements.

Oligopoly-Where market availability is held by alimited number of firms.

Open-End Contract-A contract in which the term orquantity is not defined.

Open Market Purchases-Purchasing without contractor negotiation. Such practice may exist in anemergency situation when a contract is not in place.

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Open Storage-A condition in which all lots may bewithdrawn or partial withdrawals made from lotswithout disturbing another lot.

Option to Renew-A contract may stipulate that thepurchasing authority has the option to reinstate foranother term.

Order Level-The level of stock of any item at which an

order is initiated for more supplies of that item.

Order Picker-A warehouseman assigned to thefunction of making withdrawals of warehousing units.

Order Processing Time-The amount of time,determined by the inventory manager, needed to carryout all of the steps of issue and reconciliation ofmerchandise.

Order Selector-Same as order picker.

Overhang-The condition created by using a planeloading area that is larger in area than the pallet orplatform surface upon which the first course is laid.

Overhead-Includes all of the factors other than directlabor and materials included in the cost of goods sold.This figure is usually expressed as a percentage ofdirect labor cost, a dollar amount per production unit,and several other ways.

Packaging-A preparation of a commodity fordistribution or bulk packing in quantities suitable forfilling a carton with a prescribed number of units.

Packing List-A document that itemizes in detail thecontents of a particular package or shipment.

Pallet-A rectangular support for unitized lots. Subjectto standards of length and width for storage inpredetermined places. Construction is such that thereis air space between the bottom of the pallet and theload bearing surface of the pallet sufficient to allow theinsertion of lifting forks of a pallet truck or forklift.Pallets may be constructed of wood, steel, plastic, rigidpaperboard, or aluminum; and may be subject todemurrage charges or disposed of as scrap. In some

cases carriers will require equal exchange ofserviceable pallets.

Partnership-An agreement between parties to operatea business with stipulations regarding the sharing ofprofits and losses.

Patent-A right given to an inventor to manufacture andmarket an invention for a specified period of time. Agovernment patent off ice grants such authorizations.

Penalty-A charge against a contractor for non-compliance that if not paid within a certain period oftime would result in default of contract. A clausestating this condition must be included in the contract ifthis action is exercised.

Performance Bond-A guarantee submitted by acontractor, certifying that if the contractor is unable tofulfill the obligation the amount will be paid to thepurchaser to compensate any loss.

Performance Record-A documentation of thecontractors ability to comply with the requirements of acontract during the term.

Performance Specifications-This type ofspecification places emphasis on describing acapability or result to be accomplished with a

commodity or service. A testing or inspection may beincluded.

Perishable Commodities-Commodities that have ashort shelf-life and may be expect to spoil if not placedin direct use.

Pick Line-An arrangement of SKUs in some orderlysystem to facilitate selecting or picking warehousingunits to satisfy orders.

Planography-A scale drawing of a storage areashowing the approved layout of the area, location ofbulk bin, rack and box pallet areas, aisles, assemblyareas, walls, doorways, directions of storage, officespace, washrooms, and other support and operationalareas.

Political Subdivision-Cities, counties, towns or anydivision of government within a state which is belowthe state level, but with delegated authority to functionas a local government.

Post-Consumer Materials-Any goods that have beenexpended by the consumer and directed to a recyclingprocess rather than to a landfill or solid wastedepository.

Pre-Bid Conference-A meeting to clarify an invitationto bid that has been issued.

Pre-Solicitation Conference-A meeting withprospective bidders to obtain information for biddingand invite recommendations.

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Price Agreement-A price decided upon between thepurchaser and the vendor(s). Price Competition-Acontract that is awarded solely upon priceconsideration.

Price Fixing-A collusion among vendors to market acommodity or certain goods at the same price, therebyrestricting competition.

Price Maintenance-The regulation of a base price thatmay not be undersold by supplier or manufacturer.

Price Protection-An agreement between the buyerand the seller to furnish goods at a predeterminedprice without increase for the term of the contract. Anagreed upon index of periodical increases may beincluded in such contracts.

Price Schedule-A negotiated or predetermined listingof commodities for a certain price.

Principal-One who designates another to action her or

his behalf. The designee would be controlled by theprincipal.

Privatization-The redirection by a government of aprogram or government function to be carried on by aprivate organization.

Procurement Cycle-The entire cycle of purchasingfunctions and duties which occur during acquisition ofcommodities.

Procurement Officer-A person who is authorized toenact and administer contracts and issuedeterminations in that regard.

Proposal Evaluating Criteria-Facts and informationsuch as: Management capabilities, performance plansand technical proficiencies. These factors may beweighted or given a numerical value.

Proprietary Commodity-A commodity for which themanufacturer and/or supplier has been granted anexclusive right to market.

Protest-A registered complaint, made by a bidder or

interested party, with regard to a bid decision made bythe purchaser for which a remedy or resolution isexpected.

Publication Commodity-Public printing added tostoreroom stock and not yet charged to a cost center.

Punitive Action-An action taken against a contractor,according to contract stipulation, for non-compliance ofcommodities supplied or performance rendered.

Quality Assurance-A program planned to provide thatgoods purchased may be inspected and/or tested sothat compliance with specifications may bedetermined.

Quality Control-A monitoring of a manufacturingprocess that determines the level of quality of thegoods to be supplied.

Quarantine Stock-Stock being withheld from normaldistribution due to product recall, inadequatedocumentation, contamination or other good reason.

Rack-Wood or metal framework upon which units orunitized loads are plank.

Rack Slot-The position occupied by a warehousingunit in the rack. The slot may be one or more units

high, or one or more units deep. Rack slots may befixed or floating. Fixed slots are usually located at thefirst and second level. Using modern stock picking lifttrucks, all slots can be fixed slots. The advantage ofthe stock picker is that you can substitute moving upand down for travel distance, a fact that is oftenoverlooked in evaluating stock picking trucks.

Rack Unit Clearance-Space allowed for handlingclearance between warehousing units stored on ashelf in a shelf rack, between the warehousing unitand the up rights or on either side of the warehousingunit and the uprights in a drive-in or drive-through rack.

Receiving Report-A form used by the receiving unit toinform others of the receipt of goods purchased.

Rectangular Pinwheel Course Pattern - Anarrangement of warehousing units in which two pair ofuni-block patterns are arranged in an unbalancedpinwheel.

Recyclable Materials-Goods that may be collected forreuse as material to manufacture new products. Rent-Actual rental cost for space used for warehouse andinventory control functions including office space. Forowned buildings a fair market rental value ordepreciation should be used.

Reorder Point-The level of inventory of a givencommodity at which a purchase requisition is initiated.It is a combination of expected usage during the leadtime period plus a safety stock.

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Reorder Quantity-The number of units, determined bylogical factors, scheduled for reorder when the reorderpoint is reached.

Requisition-Internal document by which a usingagency requests the procurement office to initiate apurchase. May also be a form used to obtain suppliesfrom a storeroom or warehouse.

Resolution-To arrive at an appropriate disposition of acomplaint or protest through administrative action.

Responsible Bidder-A bidder who is known to havethe necessary capabilities and assets to perform andprovide all requirements of an intended contract.

Responsive Bidder-A bidder who tenders a bid whichmeets all requirements of the invitation to bid.

Restrictive Specification-A specification that makesrequirements for technical aspects of a commoditywhich eliminates competitive or generic bidding.

Re-warehousing-The practice of rehandling lotsalready in storage in order to make room orconsolidate lots. Re-warehousing is a continuousprocess that involves handling due to the manner inwhich withdrawals are made from lots. Re-warehousing also occurs in making letdowns from theupper rack tiers or stacks to facilitate makingwithdrawals. One of the major hidden costs in re-warehousing.

Rolling Average Inventory-An average inventorycount or value based on the immediate past 12 monthperiod. Rows-Two or more columns beside oneanother.

Rule-A policy statement or regulation which may beissued, with appropriate authority, by an administrativegovernment agency to interpret or clarify a statute.

Safety Stock-The level of stock, over and above theexpected usage between the time a replenishmentorder is processed and replenishment actually occurs,that is held in reserve to try to prevent stock-out,should there be a delay in delivery of stock by thevendor.

Salvage-Property or equipment which has served theuseful life, but still has value as a source for parts orscrap.

Scheduled Purchases-A regulated bidding to becarried out at pre-determined intervals to coincide withthe volume acquisition needs of user agencies.

Scrap-Commodities that are deemed worthless to theowner and are only valuable to the extent they can berecycled.

Sealed Bid-A bid submitted as a sealed document, bya prescribed time. The contents of the bid will not beknown to others prior to the opening of all bids.

Selection Line-(See Pick Line)

Service Aisle-An aisle used to reach access aisles.Service aisles may also be used to gain access tostorage lots. Utilizing the service aisle to gain facingsor slots is often overlooked in making layouts.

Shelves-Board fixed horizontally and supported by aframe or uprights. May be of metal or wood. Shelvesmay be fixed or adjustable. Used for small stores.

Shrinkage-Back door losses and losses by issueerror.

Slot-The position in a block occupied by a lot.

Small Lot Storage-A small lot is generally consideredto be a quantity of less than one pallet stack stacked tomaximum storage height. Thus, the term refers to a lotconsisting of from one container to two or more palletloads, but is not sufficient quantity to form a completepallet column.

Sole Source-A purchase made without issuance ofcompetitive bids for a commodity that is known to beavailable from only one source.

Spot-The placing of a truck or boxcar where it isrequired for loading or unloading. Square PinwheelCourse Pattern-An arrangement of warehousing unitsin which four, uni block like patterns are arranged in apinwheel. Stack-Two or more columns in back of oneanother.

Stacking Efficiency-A ratio expressed as apercentage of the potential stacking height used by thewarehousing units in the stack after making alldeductions for pallets or other horizontal separation.

Stacking Height-Same as Working Head Room.

Standard-Performance levels and characteristics thathave been determined as a general expectation for agiven commodity.

Standard Pallet Rack-The term used to designate theone-deep shelf type rack. Originally designed forpallets but also used for shelf storage of large units,

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usually, one or two of a kind. The rack consists ofuprights and beams and may be bolted or adjustable.Great care should be exercised in loading racks toavoid overloading. Such racks should be secured tothe floor or rows positioned back to back and securedto each other with spacer bars or spacer rods. Beamsare usually designed to accept dunnage or crossbracing to prevent loads from falling between thebeams.

State Use Laws-Laws that are enacted in many statesrequiring state agencies to purchase from prisonindustries and physically disadvantaged workorganizations.

Stock-The commodity or commodities on hand in astoreroom or warehouse to support operations.

Stock Control-Determining the usage rate of aninventory and controlling the level of ordering andinventory accordingly.

Stock Keeping Unit-A warehousing item (SKU) thatmust be stored and accounted for separately. A singlestockkeeping unit may have to be stored in differentlots for the purpose of quality control, maintainingstock rotation, isolation or quarantine. It may also benecessary to split stock between reserve storage andpick-line when the entire stock cannot be maintained inthe pick-line.

Stock-out- The condition existing when a supplyrequisition cannot be fi lled from stock. Stock-out Rate-The number of stock-outs per hundred line itemspicked.

Storeroom-A secure place for storage of things. Astoreroom may be a designated separate secure areawithin a warehouse or a designated storage room in aworkplace and may contain warehouse stock or end-use items.

Supplies-All items that are consumable. Generally,these would be commodities with a shorter life while inuse than items that would remain in inventory afterissuance or assignment for use.

Supply Requisition-A form used by a cost center to

request the issue of a commodity or commoditiescarried in storeroom stock.

Surplus-Commodities that are not returnable to thevendor for credit, but are useful for some purpose andare excess or obsolete for the cost center owning thegoods.

Suspension-No longer qualified as a prospectivebidder and may be removed from the list of vendors toreceive bids.

Tier-A single layer of units forming part of a unit load,column, stack row or block.

Term Contracting-Establishing a source from whichto acquire goods or services for a specific period of

time.

Testing (Commodities)-To perform a laboratoryanalysis of products purchased from a contract todetermine if the quality and performance agreed to bythe contractor remains in compliance.

Trademark-A symbol, initialing, lettering, etc., whichhas been adopted as a positive identification of asupplier. A trademark, to be valid, must be properlyregistered with legal rights assigned to only one user.

Turnaround Time-The length of time for completing a

process usually expressed as an average but can bedetermined for individual items (i.e. time from placingrequisition to issue of goods or time from requisition toissuance of a P.O.).

Underhang-The condition resulting from laying acourse with smaller dimensions of length and/or widththan the dimensions of the pallet or platform on whichthe course is laid.

Uni-block Course Pattern-An arrangement ofwarehousing units in which all lengths are laid in onedirection.

Uniform Block-Any uniform combination ofwarehouse elements, i.e., units, tiers, rows, stacks,columns, bins, shelves or racks.

Unit Clearance-Space allowed for handling clearancebetween columns or stacks, or between tiers in racks,shelves or bins.

Unit Load Pattern-The arrangement of the courses ina unitized load.

Utilities-Actual electricity, telephone, etc., costsdirectly incurred by the warehouse.

Utility-A value established for commodities or serviceswhen amounts, quality and costs are determined.

Value- The exchange worth rate for goods andservices on the open market. Value Analysis- Theanalytical evaluation of a purchase, whereby the total

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cost of purchasing, maintaining and using theprocurement is determined for throughout the usefullife.

Vendor File-A file maintained that lists vendors. Thefile should contain all information pertinent to thevendor, i.e., application information, commoditiessupplied and performance record.

Vertical Occupancy Ratio-Ratio of occupancy in theoccupiable space measured by counting thewarehousing units in an active block and comparingthis count with the capacity of its correspondinguniform block.

Vertical Separations-Space consumed by unitclearance between columns, stacks, posts, walls orother warehousing elements.

Void-Honeycomb in a unitized load caused by failureto utilize the loading area at 100 percent efficiency.

Waiver of Bids-A purchasing method, whereby thebidding process is omitted and goods are purchasedfrom available sources. Government agencies must beduly authorized by law (or rule) to make this type ofpurchase.

Waiver of Irregularity-Noting, but disregardingnoncompliance within a bid which may be due to error.Such waiver or disregard must not unfairly affect thecompetitive process.

Warehouse-(1) A structure designated for storage ofthings. (2) Used as a verb indicates the act of storingthings, as in, "We will warehouse these electricalsupplies".

Warehouse Requisition-A request from thewarehouse to Purchasing to initiate a purchase orderto restock one or more commodities.

Warehouse Security-The combined total effort toexclude intrusion into a warehouse by unauthorizedpersons, destructive pests, and other events beyondman's control (i.e. windstorm, lightning, and flood).Includes records keeping, access control, building

design, and maintenance and housekeeping functions.Warehousing Unit-This may be a single largepackage handled as a unit load or a group ofpackages palletized on a pallet or otherwise unitized.

Waste-Materials no longer suitable for their intendedor any other purpose.

Working Clearance-The space allowed between thetop of a stack or column and the lowest overheadobstruction. For example, ceiling joists, beams,sprinkler heads, steam pipes, etc. This allowance will

vary depending upon local fire codes.

Working Headroom-The distance as measured fromthe floor to a point twelve inches or more below thelowest overhead obstructions. Working headroom isusually controlled to avoid coming into contact withoverhead obstructions in the storage area and tomaintain the unit clearances required by local fireregulations or ordinances.

Zone Contracting-The award of contracts accordingto district or region designation. This type of awardissuance is generally applied when the potential for

service by a single vendor to an entire area