Average Payment Period (for materials) is the average time from receipt of production-related materials and payment for those materials. Production-related materials are those items that are classified as material purchases and are included in the Cost of Goods Sold (COGS) as raw material purchases. (An element of Cash-to-Cash Cycle Time).

Understanding the Average Payment Period for materials. Streamline your Cash-to-Cash Cycle Time. Click to learn more with Cogoport today!

Optimize Cash Flow with Average Payment Period

Average Payment Period (for materials)

Average Inventory is the calculation used to estimate the number or value of a set of goods or a particular good during two or more specified time periods (also known as the sampling period). To take an example, daily inventory levels over a two-week period of time, hourly inventory levels over one day, and so on. The average inventory for the same total period of time can fluctuate widely depending upon the sampling period being used.

The concept of Average Inventory to optimize your stock levels and drive efficient operations. Click here to learn how to manage inventory better!

Average Inventory Explanation

Average Inventory

The average cost per unit is the estimated total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced. It is equal to the total cost of production divided by the number of units produced, also known as the unit cost. Over a longer duration, the average cost normalizes the cost per unit of production.

Average Cost per Unit

Accounts payable is the money that a company owes to its creditors shown on the liabilities side of a company's balance sheet.‍An accounts payable turnover ratio is a ratio that is calculated on the basis of the average number of times a company pays its creditors over an accounting period. It measures the short term liquidity of a business. The payable turnover ratio is calculated by dividing net credit purchases by average accounts payable.‍A variety of expenses come under account payables, including product material related expenses.‍Accounts payable generally show a credit balance as is expected of a liability account. Hence when an invoice is recorded, accounts payable is credited, and another account is debited. When a payment is made, however, the accounts payable will be debited, and cash will be credited. Thus, as per double-entry accounting, the credit balance in accounts payable must be equal to the invoices received from the vendors.‍Under the accrual method of accounting, the company receiving goods or services on credit must report the liability no later than the date they were received. The same data would be used to record the debit entry to an expense account. Hence, accountants say that under the accrual method of accounting, expenses are stated when they are incurred (not when they are paid).‍The analysis of accounts payable requires enormous effort in reviewing the details and accounts in order to ensure that accurate and legitimate amounts are entered into the accounting system. The requisite information will be found in the following documents.<ul><li>Purchase orders issued by the company</li><li>Receiving reports issued by the company</li><li>Invoices from the company's vendors</li><li>Contracts and other agreements</li></ul> The legitimacy and completeness of a company's financial statements are dependent on the accounts payable process. A well-run accounts payable process must include<ul><li>The timely processing of accurate and legitimate vendor invoices,</li><li>Accurate recording in the appropriate general ledger accounts, and</li><li>The accrual of obligations and expenses that have not yet been completely processed.</li></ul> A company's cash position is affected by how effectively and efficiently an account payable process takes place in addition to credit ratings and its relationship with its suppliers.

Accounts Payable

Available to Sell (ATS) refers to the units of the total products or goods that are allocated or committed for sale but have not yet been shipped. These products are not held in orders that are not yet shipped (or not yet exported for shipment). This includes the current inventory at a location and any open purchase orders.

Available to Sell (ATS)

Available to Promise (ATP) is the uncommitted portion of a company’s inventory and planned production maintained in the master schedule to support customer-order promising. It allows a business to keep the minimum amount of a given product within their warehouses so that the use of the inventory space is efficient. The ATP quantity is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP includes on-hand inventory, fewer customer orders that are due and overdue.&nbsp; There are three methods of calculation that are used:&nbsp;<ul><li>Discrete ATP - Also known as Incremental Available-To-Promise, is a calculation that is based on the available-to-promise figure in the main schedule. For the first period, the ATP is the sum of the starting inventory added to the MPS quantity minus backlog for all periods until the item is master scheduled again. For all the other periods, if a quantity has been scheduled for that particular time period, then the ATP is this quantity minus all customer commitments for this and other periods until another quantity is scheduled in the MPS. So, for those periods where the quantity scheduled is zero, the ATP is zero (even if deliveries have been promised). The promised customer commitments are accumulated and shown in the period where the item was most recently scheduled.&nbsp;</li><li>Cumulative ATP with a look ahead - The cumulative with look-ahead ATP equals the ATP from the previous period plus the MPS of the period minus the backlog of the period minus the sum of the differences between the backlogs and MPSs of all future periods until, but not to include, the period where point production exceeds the backlogs.&nbsp;</li></ul>‍Cumulative ATP without look ahead - The cumulative without look-ahead procedure equals the ATP in the previous period plus the MPS, minus the backlog in the period being considered.

Available to Promise (ATP)

Available Inventory is the count of all on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems, often called "beginning available balance". Basically, Available = Total – Allocated.

Available Inventory

Rescheduling done by the computer to automatically change due dates on scheduled receipts when it detects that due dates and need dates are out of phase.

Automatic Rescheduling

A set of inventory bookkeeping methods that automatically adjusts computerized inventory records based on a production transaction. Examples of automatic relief methods are back flushing, direct-deduct, pre-deduct, and post-deduct processing.

Automatic Relief

An Automated Storage and Retrieval System (AS/RS) is a high-density rack inventory storage system with unmanned vehicles to automatically store and retrieve materials as needed with speed, precision, and accuracy under a defined degree of automation.

Automated Storage-Retrieval System (AS-RS)

The Automated Manifest System (AMS) is an electronic information transmission system launched by U.S. Customs and Border Protection (CBP). It was launched to gain detailed information about cargo imported into the country. The air and ocean shipments coming into the U.S. require an AMS filing with detailed information about the cargo, as a security measure. The required information is expected to be uploaded 24 hours before the ship sails from the port of loading.&nbsp;

Automated Manifest System (AMS)

An automated guided vehicle (AGV) is a portable robot that uses radio waves, vision cameras, magnets, or lasers to maneuver along specified long lines or wires on the floor. It consists of one or more computer-controlled, wheel-based load carriers running without an onboard operator or driver. They are machines performing simple tasks.&nbsp;‍AGVs have been integrated into many non-distribution and manufacturing industries over the past decade, including retail, military, and even healthcare. In industrial applications, they are mostly used for transporting heavy materials around a large industrial building, such as a factory or warehouse.&nbsp; <h3>There are different types of AGVs ranging from :</h3><ul><li>Masted vehicles&nbsp;</li><li>Unit load&nbsp;</li><li>Conveyor</li><li>Tow or tuggers</li><li>Carts</li></ul>‍<h3>Advantages: </h3>‍There are many advantages of AGV, from reducing labor costs, increasing safety, accuracy, productivity, and modularity. The advantages offered by AGVs have created a buzz and put them at the forefront and center of the minds of warehouse managers and supply chain executives who consider automation.&nbsp;‍But the simple truth is they aren't well suited for all businesses. It has potentially high initial investment, maintenance costs. It is also not suitable for the non-repetitive task and decreases the flexibility of operations. Automation comes in many forms and technologies that are to boost your operation's efficiency and profitability. Some potential alternatives to AGVs that you may want to consider are conveyor systems, automated storage &amp; retrieval systems (AS/RS), overhead trolley conveyor, and autonomous mobile robots (AMRs). Of these options, AMRs may be the most closely-aligned with AGVs in terms of use and intent.

Automated Guiding Vehicle System (AGVS)

The Automated Commercial Environment (ACE), previously known as Automated Commercial System (ACS), is a U.S. Customs and Border Protection (CBP) system designed to facilitate legitimate trade while increasing border security. ACE will improve the processing of information, collection, and sharing submitted to CBP and government agencies.

Automated Commercial Environment (ACE)

A nationwide electronic payments system, which more than 15,000 financial institutions use, on behalf of 100,000 corporations and millions of consumer in the U.S. The funds transfer system of choice among businesses that make electronic payments to vendors, it is economical and can carry remittance information in standardized, computer process able data formats.

Automated Clearing House (ACH)

A feature of large call center or “Customer Interaction Center” telephone switches that routes calls by rules such as next available employee, skill-set etc.

Automated Call Distribution

<h2>What is ABI?</h2>The Automated Broker Interface is a part of the ACS or the Automated Commercial System that permits qualified participants to file import data electronically with CBP (US Customs and Border Protection). ABI is a voluntary program available to brokers, importers, carriers, port authorities, and independent service centers.&nbsp;‍In simple terms, ABI speeds up the process of the release of goods to the trade community. It is a primary system for processing entries and entry summaries. The ABI arranges for customs brokers, importers, and authorized agents with direct connectivity to CBP and other partner government agencies. ABI not only facilitates cargo clearance and streamlines processing for filers; it also helps track cargo movement and serves as a repository for shipment data. <h2>What does ABI do?</h2>ABI serves many purposes:Users can not only use ABI to transmit, validate, edit and confirm entries and entry summaries, but also query trade data such as cargo release, entry summary status, and visa requirements along with processing payment for multiple entries with one transaction, and processing payment of customs duties, taxes, and fees through the Automated Clearinghouse (ACH).‍Qualified participants can also authenticate duties, taxes, and fees, communicate with CBP, receive real-time status alerts, and receive reports and administrative messages like notices of liquidation, extension, and suspension. Additionally, they can look up tariff updates and generate error statistics reports.‍Most participants prefer using either an in house ABI software or one that is provided by a third party. It is essential to use updated software due to continued evolvement and addition of functionalities to the software. Third-party software is usually more popular because of cost-effectiveness, provided that it is approved by CBP. Such software helps participants overcome changing requirements and streamline electronic paperwork.&nbsp; <h2>&nbsp;How to select ABI software?</h2>All information exchange between ABI users and CBP is done through ACE(Automated Commercial Environment), CBP’s single window for communication. To expedite the process, ABI software connects directly to ACE with the submission of entries and other essential electronic data. CBP also provides a published list of approved vendors of ABI services and other IT services.‍&nbsp;Before signing a contract with any vendor though, a company must evaluate their needs and frequency of filing, number of transactions, and number of users and then settle on software that fulfills their needs.&nbsp;For example, for smaller businesses or brokerage firms, ABI software installed on their computer or a web-based application might be enough. Cloud-based ABI solutions are common because they allow users to access files and data on any device at any time. Cloud-based ABI software removes the need for costly installation and maintenance and gives users more control over their data.

Automated Broker Interface (ABI)

Determining the correct transportation charges due the carrier: auditing involves checking the accuracy of the freight bill for errors, correct rate, and weight.

Auditing

Manual or computerized tracing of the transactions affecting the contents or origin of a record.

Audit Trail

Audit Ability is a characteristic of the modern information system, that is gauged by the ease with which data can be substantiated by tracing it to the source documents and the extent to which auditors can rely on pre-verified and monitored control processes.

Audit Ability

<h2>What is an Audit?</h2>The inspection and examination of a process or quality system to ensure compliance with requirements. An audit can apply to an entire organization or be specific to a function, process, or production step.‍The audit can be carried out internally by an employee or externally by an outside firm or an independent authority. The purpose is to check and verify by an independent authority to ensure that the firms' accounts are being managed fairly and in accordance with the law.&nbsp;‍There are four steps in the Auditing process:<ol><li>Define the auditor's role and terms of engagement</li><li>Plan the audit</li><li>Compiling the information for the audit</li><li>Reporting the result</li></ol> <h2>Different types of Audits:</h2><ol><li>Internal Audit: Internal audits take place within your business. As the business owner, you initiate the audit while someone else in your business conducts it.&nbsp;</li></ol><ol start="2"><li>External Audit: An external audit is conducted by a third party, such as an accountant, the IRS, or a tax agency. The external auditor has no connection to your business (e.g., not an employee). And, external auditors must follow generally accepted auditing standards (GAAS). Like internal audits, and external audit's main objective is to determine the accuracy of accounting records.</li></ol><ol start="3"><li>Audit report: When your business is audited, external auditors usually give you an audit report. Audit reports include details of the audit process and what was found. And the report includes whether your financial records are accurate, missing information, or inaccurate.</li></ol><ol start="4"><li>Tax Audit: IRS tax audits are used to assess the accuracy of your company's filed tax returns. Auditors look for discrepancies in your business's tax liabilities to make sure your company did not overpay or underpay taxes.</li></ol><ol start="5"><li>Financial Audit: This is an analysis of the fairness of the information contained within an entity's financial statements. It is conducted by a CPA firm, which is independent of the entity under review. This is the most commonly conducted type of audit.</li></ol><ol start="6"><li>Compliance Audit: This is an examination of an entity or department's policies and procedures to see if it is in compliance with internal or regulatory standards.&nbsp;</li></ol><ol start="7"><li>Operational Audit: This is a detailed analysis of the goals, planning processes, procedures, and results of a business's operations. The intended result is an evaluation of operations, likely with recommendations for improvement.</li></ol><ol start="8"><li>Investigation Audit:&nbsp; This is an investigation of a specific area or individual when there is a suspicion of inappropriate or fraudulent activity.</li></ol> <h2>Benefits of Audit:</h2><ul><li>Compliance. An audit provides complete peace of mind for business owners and shareholders that the organization is 100% compliant with all of its current statutory obligations</li><li>Credibility. provides invaluable credibility and confidence to your organization's customers/clients, stakeholders, investors or lenders, and even potential buyers</li><li>An audit helps to identify weaknesses in the accounting systems and enables us to suggest improvements. The process keeps our partners informed of areas/situations where advice is useful</li><li>Boost your business's bottom line stay organized</li></ul>

Audit

A label used to provide additional classification or information about a resource, activity, or cost object. Used for focusing attention and may be subjective. Examples are a characteristic, a score or grade of product or activity, or groupings of these items, and performance measures.

Attributes

Attachment, also known as Maritime Attachment, allows a claimant to obtain a personal judgment on the full sum due against the owner of the seized property and the owner still remains liable for the balance of the judgment if the property seized isn't sufficient to satisfy it.

Attachment

Assumed Receipt is the principle of assuming that the contents of a shipment are the same as the ones presented on a delivery or a shipping note. In this case, the shipping and receiving personnel do not check the delivery quantity. This practice is used in conjunction with an EDI-delivered ASN and bar codes to eliminate invoices and facilitate rapid receiving.

Assumed Receipt

<h2>What is the Association Of American Railroads?</h2>The Association of American Railroads, AAR, is an organization representing the major freight railroads of North America and some other regional commuter railroads. When required, the AAR represents its members' interests to the public at large and to Congress and government regulators in particular. American freight railroads make sizable investments across the country that enable an efficient freight rail network in moving the goods that make modern life possible, and connecting American businesses to markets from coast to coast and beyond.&nbsp; <h3>What do they do?&nbsp;</h3>Some of their functions are: <ol><li>Policymaking: The AAR, along with the requisite authority, makes public policies in the interest of the industry to make it a more efficiently running system.</li><li>Standard-setting: The AAR has the authority to establish safety, security, operating standards that provide seamless operations across the country.&nbsp;</li><li>Industry Data, Reports, and Publications: AAR prepares weekly, quarterly, and annual statistical reports to provide comprehensive insight into the operations of North America's freight railroads.&nbsp;</li><li>Research and Technology Initiatives: The AAR has two subsidiaries, The Transportation Technology Centre, Inc. (TTCI), and Railinc. These subsidiaries research and development projects to increase the safety, security, and efficiency of the railroad industry. Railinc provides the rail industry's leading resource for rail data, information technology, and information services, and uses one of the world's largest data networks to track customer shipments.</li></ol>‍The AAR ensures that standards are maintained throughout the railroad network. They constantly update these standards in alliance with elected officials and leaders. These are a comprehensive set of guidelines that are followed in order to maintain an efficiently running system throughout the country. The AAR also plays a significant role in contributing to the economy by lowering transportation costs that might, if freight trains did not exist, be a costly affair.&nbsp;

Association of American Railroads

Assignment refers to the transfer of a shipment's title, interest, and rights to a consignee or receiver. This is most regularly used in relation to ocean freight when the "Conditions of Assignment" have been fulfilled, and the Bill of Lading is endorsed to the consignee.

Assignment

Assemble-to-order is a production environment where a commodity or service can be assembled after receiving a customer's order. The key components (bulk, semi-finished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where many end products can be assemble-based on selecting options and accessories from common components.

Assemble-to-order

Arrival Notice is a document sent by the ocean freight forwarder, freight carrier, or agent to the consignee or Notify Party indicating the shipment's arrival date at a specific location (normally the destination). The concerning parties that are notified about the arrival are generally listed as the consignees in the <a href="https://www.cogoport.com/blogs/types-and-usage-of-bill-of-lading-meaning" target="_blank">Bill of Lading</a>.

Arrival Notice

Approved Vendors List (AVL), also known as Approved Supplier List (ASL) in some circles, is a list of the suppliers approved for doing business. The AVL is usually created by procurement or sourcing and engineering personnel using a variety of criteria such as technology, the functional fit of the product, financial stability, and past performance of the supplier.

Approved Vendor List (AVL)

Appraisal costs are a component associated with the formal evaluation and audit of quality in the organization. The cost of quality includes the costs that are associated with maintaining the quality of a product or evaluating an organization's ability to maintain a level of quality in the products.

Appraisal Costs

Any Quantity Rate (AQ) means that the same freight rate applies to any size shipment tendered to a carrier; no discount rate is available for large shipments.

Any Quantity Rate (AQ)

<h2>What is the Anticipation Inventory?</h2>Every company keeps its stock in relation to its customer demand. Anticipation Inventory is the stock a company keeps expecting a change in customer demand in the near future. This stock would provide benefits to companies by satisfying their customers if there is a surge in demand.&nbsp;‍ We can take the example of a cold drinks retailer. The retailer would stock more cold drinks in summer than in winter. This is because he anticipates more customer demand for cold drinks in Summer. <h3>Advantages:</h3><ul><li>Anticipation inventory enables a business to meet changing consumer demands. For example, during Halloween times, there is a high demand for pumpkins. So if more pumpkins are stocked during this time, it will prove fruitful for the business person.</li><li>It ensures that the retailer is able to provide consistent output and a stable workforce throughout the year without stock-outs during varying consumer demand.</li><li>Protection against uncertainty is one of the biggest benefits of stocking products in an extra amount by estimating their future demand. The future is not certain, but if you are lucky enough to hold the products that have risen in the demands due to unforeseen circumstances, then you can cash in on the opportunity and earn more.</li></ul> <h3>Disadvantages:</h3><ul><li>It costs more money to store inventory, and the longer it sits around, the more money it will cost to the business, and the less likely a customer is to want it. The true cost of inventory includes the inventory itself, costs associated with storing the inventory, and the opportunity cost of the money that was used to purchase the inventory.</li><li>The impact of anticipated inventory stays longer than the normal inventory error. In normal inventory error, the impact lasts only till the time the stock remains, but when a stock is stored in anticipation, the chances are that the business might have a hard time selling off the products because of its quantity.</li></ul>

Anticipation Inventories

A report, normally issued by both manufacturing and purchasing to the material planning function, regarding jobs or purchase orders that will not be completed on time and explaining why the jobs or purchases are delayed and when they will be completed. This report is an essential ingredient of the closed-loop MRP system. It is normally a handwritten report.

Anticipated Delay Report

When items are exported from one nation to another at a price below market value, this is referred to as "dumping." This is an unfair business practice that may have a negative impact on global trade. Anti-dumping laws are put in place to address the situation that results from the dumping of goods and its impact on commerce. The WTO permits anti-dumping measures as a tool for fair competition. 
Anti-dumping is not a method of protecting the domestic industry per se; rather, it is a tool for maintaining fair trade. It protects the home industry from the harm brought on by dumping.
<h3>Who Can Make an Application for Anti-dumping Duty?</h3>
Applications for an investigation into alleged product dumping into India may be submitted to the Designated Authority in the Department of Commerce by or on behalf of the concerned local industry. Only those petitioners/domestic producers who expressly support the application and represent more than 25% of the total domestic output of that comparable article are eligible to submit a valid application. If the domestic producers whose combined output accounts for more than 50% of the total production of the same article produced by that segment of the domestic industry express their support or opposition, as the case may be, to the application, it is assumed that they are acting on behalf of the domestic industry.

Anti-Dumping Duty

ANSI is short for the American National Standards Institute; it is a private not for profit organization that oversees voluntary consensus standards in the U.S. ANSI is the sole U.S. representative to the International Standards Organization (ISO). This means that ANSI coordinates U.S. standards with World standards so that the U.S. products can be used worldwide. It is headquartered in Washington, D.C.&nbsp; <h2>How does ANSI work?</h2>ANSI, itself, does not accredit standards; it oversees the use and development of standards by accrediting the procedure of standards developing bodies. An ANSI accreditation signifies that these standards developing organizations have used procedures that meet the institute’s requirements.&nbsp; The importance of meeting standards could be explained in one small example, i.e., the shoe fit. You can be a size 9 for one brand and a size 9.5 with the other brand. This is because each shoe manufacturer has its own standards of measurement.&nbsp;&nbsp; It is important to develop voluntary consensus standards since it helps increase the market acceptance of various products and services; it also clarifies how one can increase the safety of the products, thus enhancing the protection for the end consumer.

ANSI Standard

Amtrak is a passenger railroad service that provides long-distance and medium intercity service in the nine Canadian cities contiguous to the United States.

Amtrak

The American Waterways Operators is the national trade association representing the US tugboat, towboat, and barge industry. AWO members operate on the rivers, coasts, Great Lakes, and harbors of the United States, moving important commodities safely, reducing air emissions, water pollution, and highway congestion.‍The US tugboat, towboat, and barge industry play a significant role in the American economy. Nearly 5,500 US-flag tugboats and towboats and more than 31,000 barges move an average of 763 million tons of cargo on the nation’s waterways each year, including raw materials and commodities as well as finished consumer products (as per a study conducted by PWC in 2017). The industry provides tug and tow services in US ports and facilitates trade between ports in the US mainland, Hawaii, Alaska, Puerto Rico, and the US Virgin Islands. Additionally, it plays a role in domestic waterborne commerce; the industry also encourages international trade by giving tugboat services to large containerships and other oceangoing vessels entering US ports.‍The study divided the impact of AWO on the American Economy into three parts:1. &nbsp; 	Direct Impact: which includes the jobs provided by AWO, the income from labor and taxes are directly attributable to the industry‍2. &nbsp; 	Indirect Impact: This includes continued employment, labor, and the taxes that have been collected throughout the history of the organization.3. &nbsp; 	Induced Impact: This includes all the income directly and indirectly earned from the US tugboat, towboat, and barge industry’s spending.‍American Waterways have a significant impact on the American economy. Energy-efficient water transport, therefore, continues to play a pivotal part in America’s transportation system and helps make America’s economy more competitive.

American Waterways Operators

The American Trucking Associations (ATA) is the most comprehensive and largest national trade association for the trucking industry.

American Trucking Association (ATA)

ASCII format is simple text based data with no formatting. The standard code for information exchange among data processing systems. Uses a coded character set consisting of 7-bit coded characters (8 bits including parity check).

American Standard Code for Information Interchange

American Society of Transportation and Logistics is the premier professional organization for transportation and logistics professionals. The ASTL certification program is used throughout various governments, academia, and businesses worldwide. professional organization in the field of logistics.

American Society of Transportation & Logistics

Established in 1943, the American Society for training and development (ASTD), the purpose of such establishment was to create an organization dedicated to raising the standards for the industrial training profession and to further the training professional's education and development. In 2014, the organization changed its name to the Association for Talent Development (ATD) to echo the global nature and wide scope of its members' work. <h2>What is ATD?</h2>ATD is a non-profit organization representing those who develop talent in the workplace. ATD encourages the training of the employees as per the requirement of the company. This training is based on a competency model.‍The components of which are as follows: <h3>Roles</h3>Roles are groups of targeted skills. An individual's job may include one or more roles, akin to different "hats" that one might have to wear. Roles, however, are not to be interpreted as "titles."‍At the top of the competency model are four roles, or lenses through which Workplace learning and Performance practitioners may view the model:<ul><li>learning strategist</li><li>business partner</li><li>project manager</li><li>professional specialist</li></ul>‍A WLP professional may take on one or more roles in his job <h3>Areas of Expertise (AOEs)</h3>AOEs are the specific knowledge/skills that an individual needs to perform in a learning and performance role. An individual might need such skills in one or more areas.‍As a part of the 2004 initiative to build a competency model for learning and performance professionals, ASTD identified nine areas of expertise, considered critical for workplace learning and performance professionals:<ul><li>career planning and talent management</li><li>coaching</li><li>delivering training</li><li>designing learning</li><li>facilitating organizational change</li><li>improving human performance</li><li>managing the learning function</li><li>managing organizational knowledge</li><li>measuring and evaluating</li></ul> <h2>Foundational Competencies</h2>Foundational competencies describe relevant behaviors for learning and performance professionals. The ASTD Competency Model offered the idea of foundational competencies. ‍These foundational competencies are categorized as follows:<ul><li>Interpersonal: how one works with, manages, and influences people, policy, and change.</li><li>Business and Management: how one analyses situations, makes decisions, and implements solutions.</li><li>Personal: how well one adapts to change and makes personal decisions to enhance their career.</li></ul>‍It is essential that WLP professionals reinforce this foundation by keeping in touch with resources that form and refresh these skill sets.

American Society for Training and Development (ASTD)

American Society for Testing and Materials (ASTM) is a not-for-profit organization that provides a forum for the development and publication of voluntary consensus standards for materials, products, systems, and services. ASTM has created a number of standards for the freight transportation sector; the most important ones are: <ul><li>Test Methods for Programmable Horizontal Impact Test for Shipping Containers and Systems</li><li>16 Standard Practice for Performance Testing of Shipping Containers and Systems</li><li>Practice for Conditioning Containers, Packages, or Packaging Components for Testing</li><li>Test Method for Random Vibration Testing of Shipping Containers</li><li>Test Method for Bridge Impact Testing</li><li>Test Method for Drop Test of Loaded Containers by Free Fall</li><li>Test Method for Performing Programmed Horizontal Impacts Using an Inclined Impact Tester</li><li>Test Method for Simulated Drop of Loaded Containers by Shock Machines</li><li>Test Methods for Mechanical Handling of Unitized Loads and Large Shipping Cases and Crates</li><li>Test Methods for Rough Handling of Unitized Loads and Large Shipping Cases and Crates</li><li>Test Method for Concentrated Impacts on Transport Packages</li><li>Test Methods for Determining the Effects of High Altitude on Packaging Systems by Vacuum Method</li><li>Test Method for Determining Compressive Resistance of Shipping Containers, Components, and Unit Loads</li><li>Practice for Performance Testing of Packages for Single Parcel Delivery Systems</li><li>Test Method for Impact Testing for Shipping Containers and Systems</li><li>Test Method for Water Resistance of Shipping Containers by Spray Method</li><li>The terminology of Packaging and Distribution Environments</li><li>Test Methods for Vibration Testing of Shipping Containers</li></ul>‍

American Society for Testing and Materials (ASTM)

The American Society for Quality (ASQ) is a not-for-profit educational organization consisting of 144,000 members who are interested in quality improvement. Founded in 1946, ASQ defines quality as "the totality of features and characteristics of a product or service that bear on its ability to satisfy given needs."

American Society for Quality (ASQ)

ANSI is short for the American National Standards Institute; it is a private not for profit organization that oversees voluntary consensus standards in the U.S. ANSI is the sole U.S. representative to the International Standards Organization (ISO). This means that ANSI coordinates U.S. standards with World standards so that the U.S. products can be used worldwide. It is headquartered in Washington, D.C.&nbsp;‍ <h2>How does ANSI work?</h2>ANSI, itself, does not accredit standards; it oversees the use and development of standards by accrediting the procedure of standards developing bodies. An ANSI accreditation signifies that these standards developing organizations have used procedures that meet the institute’s requirements.&nbsp;‍ The importance of meeting standards could be explained in one small example, i.e., the shoe fit. You can be a size 9 for one brand and a size 9.5 with the other brand. This is because each shoe manufacturer has its own standards of measurement.&nbsp;&nbsp;‍ It is important to develop voluntary consensus standards since it helps increase the market acceptance of various products and services; it also clarifies how one can increase the safety of the products, thus enhancing the protection for the end consumer. ‍

American National Standards Institute (ANSI)

The ACSI, American Customer Satisfaction Index, is an index that measures the satisfaction of U.S. household consumers with the quality of products and services offered by both foreign and domestic firms that have a significant share in U.S. markets. It works as an economic indicator that measures the satisfaction of consumers across the United States economy.‍The ACSI is a cause and effect model that measures drivers of customer satisfaction on the left side and outcomes of customer satisfaction on the right. The questions assess customer evaluations of the determinants of each parameter. These parameters are multivariable components measured by several questions that are weighted within the model.‍This national customer satisfaction level indicator is reliant on 3 critical 10 point scale questions to obtain customer satisfaction. These American Customer Satisfaction Index (ACSI) questions are categorized into Satisfaction, Expectation Levels, and Performance.‍For example, the questions would ask: <ol><li>&nbsp;How satisfied are you with the following product/service?</li><li>&nbsp;Whether the product/service met your expectations?</li><li>&nbsp;How did the product/service perform in comparison to our competitors?</li></ol>&nbsp;The ACSI then provides a formula to normalize the results achieved from these questions.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Satisfaction + Expectancy + Performance - 3) / 27 * 100 Ideally, all three parameters have different weights according to their industry as well as the state. This influences the American Customer Satisfaction Index (ACSI) customer satisfaction score calculation. This calculation is an average calculated by considering different weights for each of these parameters and also industrial standards.‍&nbsp;The methodology used by ACSI, as aforementioned, is based on three key parameters: Satisfaction, Expectation Levels, and Performance, which are further elaborated into the following: <ol><li>Customer expectations evaluate what the customer expected the product or service to be and what did they actually receive. These expectations can be formed either from word-of-mouth or prior market research or belief in an organization’s previously proven reputation.</li><li>Perceived quality is a parameter that evaluates a customer’s past experience. It depends on how competitive the market is and whether the customer has experienced the competitor products or services and also on what frequency of usage.</li><li>Perceived value is the utility of product or service in comparison to the cost paid by the customers. Value, generally, impacts the first purchase but, over a period of time, becomes less impactful when it comes to building and maintaining customer satisfaction.</li><li>Customer complaints are those customers who feel there’s a huge gap between what they expected or were promised and what they were delivered. This gap can lead to displeasure, which is important to understand customer satisfaction as higher displeasure indicates lower customer satisfaction levels.</li><li>Customer loyalty is measured on the basis of likeliness of a customer repurchasing from the same organization and irrespective of the cost linked to various products and services offered by this organization.</li></ol> The ACSI benefits businesses, researchers, policymakers, and consumers alike by serving as a national indicator of the health of the U.S. economy, as well as a tool for gauging the competitiveness of individual firms, consumer satisfaction, expenditure patterns at different income levels, ever-changing market trends and profitable markets.

American Customer Satisfaction Index (ACSI)

In a production environment, this is an optional or alternate process for manufacturing or assembly of a product, which may be employed due to the unavailability of a choice of non-standard components or a primary work centre. Alternate routing may also refer to an alternate transportation route to what would normally be taken.

Alternate Routing

A very early release of a product to get preliminary feedback about the feature set and its usability from a closed group of testers. This is then acted upon, and further improvements and changes are made to the product to better suit the user's needs and requirements.

Alpha Release

Allocation is the process of assigning product items from the inventory to shipping orders and then fulfilling the shipping orders from appropriate fulfilment sites such as drop-ship vendors, virtual sites, warehouses, or a retail store. In cost accounting, distribution of costs using calculations may be unrelated to physical observations or direct or repeatable cause-and-effect relationships. Because of allocations' arbitrary nature, costs based on causal cost assignments are more relevant for management decision-making. In order management, allocation of available inventory to customer and production orders.

Allocation

In an MRP system, an item for which a picking order has been released to the stockroom but not yet sent from the stockroom. In other words, it refers to the amount of inventory existing in the warehouse but which is already allocated for release.&nbsp; Simply Allocated Inventory is equal to Actual inventory minus the non-allocated inventory.

Allocated Item

"All risks," like the name suggests, is a type of insurance contract that covers all kinds of risks unless categorically excluded from the contract.&nbsp; In contrast to a named perils contract, all-risks insurance does not name the risks covered, but instead, it names the risks that are not covered. So, anything that is not named in the insurance is covered automatically.&nbsp; Physical loss or damage to property triggers the coverage of an "all risks" insurance. An insured must prove that physical damage or loss has happened before the burden of proof shifts towards the insurer, who then has to prove that an exclusion applies to the case.

All Risks

All-Cargo Freighter Airlines is a carrier that transports cargo only. All-cargo carriers include Evergreen, Polar Air Cargo, Kalitta, Cargolux, and Atlas Air Cargo. They generally operate in a scheduled wide-body or containerized cargo aircraft from one airport to another.<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/All Cargo Carrier.png" alt="Cargo Carrier" width="465" height="310" style="display: block; margin-left: auto; margin-right: auto;">

All Cargo Carrier

Alaskan Carrier is a for-hire air carrier that operates within the state of Alaska.

Alaskan Carrier

<h2>What is the Airport and Airway Trust Fund (ATTF)?</h2>The AATF was established in 1970; it is a fund set up to finance the Financial Aviation Administration's (FAA) investments in the airport and airway system, such as construction and safety improvements at airports and technological upgrades to the air traffic control system, additionally financing operations such as providing air traffic control and conducting safety inspections. <h2>How does it generate revenue?</h2>Its revenues are generated from aviation-related excise taxes on passengers, cargo, and fuel. The excise taxes are levied on domestic passenger tickets, domestic flight segments, international passenger arrivals and departures, and on purchases of air travel miles for frequent flyers and similar plans. Additionally, taxes are imposed on air cargo waybills and aviation fuel purchases. The largest source of excise tax revenues is generated from the transportation of passengers.‍Revenues deposited in the Trust Fund are subject to congressional appropriations and included in the federal budget. <h3>The trust fund finances four major FAA accounts </h3><ol><li>Operations: The Operations account provides for the administration, operation, repair, and maintenance of the National Airspace System (NAS) and aviation safety oversight.</li><li>Facilities &amp; Equipment (F&amp;E): The Facilities and Equipment account provides for current infrastructure and the advancement of NextGen Air Traffic Control (ATC) systems.</li><li>The Research, Engineering, and Development (RE&amp;D) account finance the research and services that ensure a safe, efficient, and environmentally compatible air transportation system.</li><li>Grants-in-Aid for Airports: The Grants-in-Aid for Airports (AIP) account funds the FAA's Airport Improvement Program (AIP), which finances the development of a nationwide system of public-use airports to meet the current requirements and the projected growth of civil aviation.</li></ol>‍The AATF has been the primary funding source for federal aviation programs since 1972. In order to avoid any anomalies, both the authority to collect aviation excise taxes and to spend from the trust fund are reauthorized periodically by Congress.

Airport and Airway Trust Fund

Airline Terminal Fee (ATF) is a fee that is charged for processing cargo for all air shipments at the bond store.

Airline Terminal Fee (ATF)

Air Waybill (AWB) is a contract of carriage or the forwarding agreement between the shipper and the air carrier. It consists of the consignee's name and address, shipper's name and address, origin airport code, destination airport code, the shipment value of goods, description of goods, gross weight, and special handling instructions, if any. It is sent along with the shipment and is duly signed by the shipper, the consignee, the carrier, or their respective representatives. An Air Waybill is a non-negotiable document i.e.; it does not state the details of the flight and delivery timelines.To read more about AWB, please <a href="https://www.cogoport.com/en-IN/blogs/air-waybill-awb-what-is-its-role-in-air-cargo-transport" target="_blank">click here</a>, and you will be redirected to a detailed blog post.<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/AWB.png" alt="AWB" width="690" style="display: block; margin-left: auto; margin-right: auto;" height="977">

Air Waybill

Air Transport Association of America (ATA), now known as Airlines for America (A4A), is the U.S airline industry trade association and lobbying group that is based out of Washington D.C. and represents the largest airline. The members of Airlines of America or the Air Transport Association of America transport approximately 90 percent of cargo and U.S. Airline passenger traffic.

Air Transport Association of America

An air taxi is an exempt for-hire small commercial aircraft that will fly anywhere on demand: air taxis are restricted to a maximum payload and passenger capacity per plane. They operate on either a scheduled or non-scheduled basis and run along short routes that aren't usually serviced by the larger airlines.

Air Taxi

A cargo container is a solid vessel made up of a storage unit to conform to the inside of an aircraft. The container should be compatible with aircraft equipment and cargo handling systems so that it can be used for air freight transportation. There are many shapes and sizes of containers. Air cargo containers fall into three categories:&nbsp;<ol><li>&nbsp;Air Cargo Pallets - These are plane or flat structures used in cargo container ships for supporting cargo goods or containers. Cargo is kept atop these, and the process is referred to as palletizing.</li><li>&nbsp;Lower Deck Containers - The containers that are designed to fit inside an aircraft. While aircraft carry passengers, lower deck containers are the ones that are placed below the cabin.</li><li>&nbsp;Box Type Containers - These containers are enclosed and are used for general-purpose transportation. They are also known as cube containers. Standard heights for dry closed containers are 8 ft, 6 in. They are manufactured with an extended height of 9 ft, 6 in., and are also referred to as high cube containers.&nbsp;</li></ol>

Air Cargo Containers

Air Freight, also known as air cargo, is the mode of transport used to transport cargo swiftly by air. Airfreight is the most valuable form of transport when shipping or transporting goods in the fastest time around the globe. Air cargo is shipped through the same gateway as the passenger or commercial airlines. General and Special are the two types of Air Cargo: General Cargo - This type of cargo consists of high-value cargo like pharmaceuticals, jewellery, and electronics. Even though air shipping is more expensive than sea transport, it is still the best mode for transporting high margin and fragile goods.‍Special Cargo - Preferred type for transporting under special conditions such as temperature control, air conditions, and special casing, usually in cases of hazardous goods or livestock

Air Cargo

Business agility refers to the way a business stays agile when markets fluctuate. Given that market volatility is high because of the various variables that constantly change, it is difficult to accurately predict market trends. Therefore businesses need to have some level of flexibility in order to deal with such disruptions.&nbsp;‍Business agility, thus, is an organizational method that incorporates the elasticity of a business. Agility deals with any unexpected internal or external changes.&nbsp;Agility generally requires two things:<ol><li>Speed of dynamic capability to move fast and respond to the changes occurring in the market or in the organization. It refers to the speed at which a company adapts to change.</li><li>Stability or a foundation that the organization can depend on in changing times. This refers to the backbone of the company that doesn’t change even when other factors are fluctuating.&nbsp;&nbsp;</li></ol> The following steps are involved in achieving agility in business&nbsp;: <ol><li>Shifting the organizational culture&nbsp;</li></ol>It’s essential to set the tone of the business in such a way that the organization allows the employee’s room to make mistakes and learn, an organization that gives more importance to feedback, fuels innovation, and differences in opinion. It’s important to have a healthy work environment where the employees feel free to contribute to the workings of the organization. This creates more flexibility in the work environment.&nbsp;‍<ol start="2"><li>The need for multiple approaches&nbsp;</li></ol>An organization needs to approach its product delivery/ any disruption from multiple approaches; there needs to be a certain amount of elasticity in the way an organization functions. This promotes agility.‍<ol start="3"><li>Inspect, adapt, and act&nbsp;</li></ol>It’s important to understand a situation and adapt to it before taking any action. If an on-going external crisis affects the functioning of the business, then the organization needs to inspect and adapt before taking any action to solve the issue. It wouldn’t help to rush into a decision without understanding the crisis first.&nbsp;‍<ol start="4"><li>Consistency&nbsp;</li></ol>Business agility requires consistent efforts in shaping the policies of an organization, setting the rules for its functionality, and creating an employee-friendly environment that promotes innovation.

Agility

Agile manufacturing is a modern approach to respond to changing customer’s needs and market demand in time. It is an approach that makes the manufacturing process more flexible. With Agile manufacturing in place, your organization would be able to cater to the market demand in a very short span, without compromising on the quality. Consumers appreciate the speed with which you tackle the market demands.For a better understanding of the word Agile manufacturing, let’s understand the term “agile.” Merriam-Webster defines “agile” as “having a quick resourceful and adaptable character,” which sums up the term almost accurately.Being connected, responsive, and prompt, you get the ability to be competitive.&nbsp;<h2>Why do you need Agile Manufacturing in your business?&nbsp;</h2>Although there are several reasons to implement an agile manufacturing plan, we will provide two of the most necessary ones. <ol><li>Technology:</li></ol><ul><li>For example, technological advancements in industrial automation, and product traceability, impacts how consumers order and pay, and how products are designed and manufactured. </li></ul><ul><li>Unforeseen technological advancements have forced manufacturers to transform their product and production methods, which have incurred them a huge loss. Thus, Operational agility is now central to achieving competitive advantage/edge.&nbsp; </li><li>Market volatility </li></ul><ul><li>Fluctuating product demand, labor costs, supply chain, and unseen financial crisis or economy dips have the ability to render companies bankrupt. To prepare against these unforeseen events, production must be able to respond to the situation in the most efficient and cost-effective way.&nbsp;</li></ul><h2>Difference between Agile Manufacturing and Lean Manufacturing&nbsp; </h2>Some people assume that agile manufacturing and lean manufacturing are the same concepts. While similar, agile manufacturing can best be described as a step in the process of lean manufacturing.Wikipedia explains by saying the difference between them is the equivalent of a “thin person and an athletic person.” <div><img src="https://uploads-ssl.webflow.com/5e57ba59552cf400c593fd16/5f7d914e8ec4d5bd7d91ab7e_Screenshot%202020-10-07%20at%203.28.17%20PM.png" loading="lazy" alt="Agile Manufacturing vs Lean Manufacturing" width="100%" height="100%" style="width:100%; height:100%;"></div>Manufacturing companies in competitive markets use agile processes to differentiate themselves and achieve a higher level of customer satisfaction. But, Agile is not restricted to the manufacturing process; it is also highly used in software development.

Agile Manufacturing

&nbsp;A reduced rate offered to a shipper who tenders two or more class-rated shipments at one time and one place.

Aggregate Tender Rate

A process to develop tactical plans to support the organization’s business plan. Aggregate planning usually includes the development, analysis, and maintenance of plans for total sales, total production, targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist—production planning and sales and operations planning.

Aggregate Planning

Aggregate planning refers to the process of developing, maintaining, and analyzing the approximate scope of the operations of a company. It usually contains targeted sales forecasts, inventory levels, and production levels. Aggregate planning determines capacity and then minimizes the cost by balancing them against such capacity. It is considered a marketing activity that is done in advance in order to determine the cost of production and procurement of other necessary materials in order to minimize the cost of operation of a company.&nbsp;‍An aggregate plan is produced when the demand and current capacity of the company is determined. The number of units that can be produced in a fixed time period is expressed as capacity. Demand, on the other hand, is expressed as the number of units required. ‍Methods that can be used to bring both to equilibrium are as follows: <ol><li>Pricing: When the demand for a product is less, the price will be decreased to match the capacity and vice versa when the demand is rising.&nbsp;</li><li>Advertising/promotion: Marketing the product can have a significant impact on its demand</li><li>&nbsp;Back ordering: By delaying the delivery on existing orders, demand is shifted to a period when capacity is not fully utilized.&nbsp;</li><li>New demand creation: A complementary demand is created to supplement the existing demand—for example, the addition of a bar in a restaurant.&nbsp;</li></ol> <h2>Aggregate planning strategies&nbsp;</h2><ol><li>Level strategy&nbsp;</li></ol>A level strategy aims at producing a plan that maintains a steady production or employment rate. The firm under this strategy maintains a steady workforce and output when the demand is low; this equips the firm with higher inventory levels than required. This is particularly helpful when the demand increases because the company can maintain the steady flow of workers and productivity and absorb the increased demand with their extra supplies. Thus the company can function efficiently at no extra cost.&nbsp;‍<ol start="2"><li>Chase strategy&nbsp;</li></ol>This strategy aims at matching demand and capacity period by period. It requires a great deal of flexibility on the company’s part as it involves a considerable amount of hiring, firing, increasing inventory, etc. chase strategy considers the components of production, variable and thus does not hold them at a set level. It evolves according to the needs of the company and ends up saving costs because of that.

Aggregate Plan

Aggregate inventory management refers to a basic inventory management method that groups items categories, namely, raw materials, work-in-process, and finished goods. It is also referred to as Aggregate inventory control; it manages multiple individual items under each category. <h3>Aggregation(Categorization) could be done on the basis of: </h3><ol><li>Distribution pattern</li><li>Stage of Production flow</li><li>Production Process</li><li>Product or SKU type</li><li>Demand Patterns</li></ol> <h3>Objectives of Aggregate Inventory Management: </h3><ul><li>Support business strategy and operations</li><li>Best customer service</li><li>Lot size/safety stock can help meet demand</li><li>Ensure that inventory practices support financial objectives</li><li>Low-cost plant operation- operating efficiency, lower production runs, less setup cost</li><li>Balance customer service, operations efficiency, and inventory investment cost objectives</li><li>Minimum inventory investment - a balance between low costs, customer service, and operating efficiency</li></ul> <h3>Aggregate Inventory Management can be used for the following processes: </h3><ol><li>Calculating inventory costs by category</li><li>Matching supply with demand</li><li>Determining the types of inventory to be held</li><li>Setting inventory objective and policies </li></ol>Aggregate control is more concerned with the cost and benefits of carrying each class of inventory. For example, the raw materials for a Table/Sofa manufacturer consist of Cloth, wood, screws, varnish, paint, and uncut leather. Work-in-process for this same company might consist of assembled tables without paint or varnish and sofa frames that still require foam and upholstery. The company controls these items with a different set of parameters. Completed items ready to sell make up the company’s finished goods products. The company controls finished goods based on the category’s supply and demand patterns. The control measures on the raw materials are based on their inventory costs.

Aggregate Inventory Management

The inventory for any grouping of items or products involving multiple stock keeping units.

Aggregate Inventory

An estimate of sales, often time phased, for a grouping of products or product families produced by a facility or firm. Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning (or for sales and operations planning) purposes.

Aggregate Forecast

<h3>What is agglomeration?</h3>Agglomeration refers to the phenomenon of clusters of business activity as a result of firms being located close to each other. Agglomeration can be described as a process that concentrates economic activity in one place to make businesses more productive.&nbsp;<h3>The role and nature of agglomeration economies&nbsp; </h3><ol><li>Shared resources: the firms that are located close to each other in an agglomeration economy share infrastructure, facilities, suppliers, and workers. Transports networks, as well as telecommunications infrastructure, is valuable depending on the density of the network. As the size of an agglomeration economy increases, so does the opportunity for intermediate suppliers to offer goods and services.&nbsp;</li><li>Matching: agglomerate economies having large and diversified markets have better matches between employers and employees as well as firms and intermediate suppliers. This significantly reduces cost because it widens the scope of business activity, thus providing better employment opportunities.&nbsp;</li><li>Learning: knowledge exchange is considered critical to growth and innovation in rapidly changing industries. When a firm becomes a part of an agglomeration, it goes through a learning process that helps the firm operate in the most effective manner.&nbsp;</li></ol><h3>Disadvantages of agglomeration&nbsp;&nbsp;</h3>Although agglomerate economies boost the economy, they can also have a detrimental effect in the following ways&nbsp;: <ol><li>Environmental effect: clusters of business activity in metro cities contribute significantly to pollution, traffic, and other externalities that occur by clustering of a population of firms.</li><li>&nbsp;Competition: because of the closely clustered business activity, firms often find themselves in losses because of increased competition</li><li>Overburdened infrastructure: the accumulation of businesses in certain areas can cause a strain on the infrastructure.</li><li>Corruption: because of the highly competitive nature of the economy, firms often find that they resort to other illegal methods in order to earn profits.</li></ol>

Agglomeration

An enterprise authorized to transact business for, or in the name of, another enterprise.

Agent

A publication of a rate bureau that contains rates for many carriers.

Agency Tariff

Services provided to the customer after products have been delivered. This can include repairs, maintenance and/or telephone support.

After Sale Service

An Advanced Shipping Notice (ASN) is a document that provides details of a pending delivery to a customer when delivery occurs, notifying him about the physical characteristics of the shipment. The notice includes all the information about the shipment and its contents.An ASN would generally include the following<ul><li>Delivery date and time</li><li>Order information</li><li>Location information</li><li>Freight information</li><li>Pallet codes</li><li>Physical details of the consignment</li><li>Product details</li></ul><h3>How Does an ASN Function?</h3>An ASN is dispatched through Electronic data interchange (EDI). Once that is intercepted, it gets uploaded to the warehouse management system of the client. The transportation management system further processes the ASN, and the shipment is received at the distribution centre or store.To make it easier, the supplier will often either put barcodes or attach RFIDs and add that information to ASN so that when the shipment is received, it can be scanned, and in the event of an error, the supplier can be notified, and the error can be rectified.<h3>Advantages of Using ASN</h3>ASN equips suppliers and buyers with efficient and accurate loading and unloading of ships. It minimizes the room for human errors and is an effective way of sorting and managing the inventory. Additionally, it saves time and effort.Errors and discrepancies are easier to spot in an ASN based system, which further makes it easier for the supplier to immediately rectify the error as well as the client/seller to claim insurance if anything goes missing.ASN deals with multiple logistical and supply chain benefits. It is effective, efficient, and notifies the receiver of the consignment with the necessary details in order for them to arrange an outbound transportation if they wish.

Advanced Shipping Notice

Techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. Management then selects one scenario to use as the "official plan." The five main components of APS systems are demand planning, production planning, production scheduling, distribution planning, and transportation planning.

Advanced Planning and Scheduling (APS)

Ordering materials before the release of the formal product design. This early release is required because of long lead times.

Advance Material Request

In forecasting, a form of exponential smoothing in which the smoothing constant is automatically adjusted as a function of one or many items, for example, forecast error measurement, calendar characteristics (launch, replenishment, end of life), or demand volume

Adaptive Smoothing

Adaptive control refers to a control method that is used by a controller that must adapt to a controlled system with varying or uncertain parameters. Adaptive control detects the changes in the functioning of the process and regulates the controlling parameters automatically to compensate for the altering conditions of the process and, in turn, optimizes the loop response.‍Conventional controllers adjust linear and non-variable systems over time because of the way they are designed. This approach is useful when operating conditions are fixed with little to no hindrances or changes. However, as soon as these conditions change, conventional controllers stop working. Adaptive control, on the other hand, adapts to changing control parameters and has the ability to control the process.&nbsp;‍<h2>Types of Adaptive Control</h2>Adaptive control relies on parameter estimation, which is a part of system identification. There two methods to estimate the parameters: <ol><li>Programmed or Gain Scheduled Adaptive Control</li></ol>The Programmed Adaptive Control adjusts the controlling parameters based on the measurement of an auxiliary variable and information about the operating conditions of the process. It is often compared to feed-forward compensation, as there is no feedback to check the reliability of adaptation.‍ <ol start="2"><li>Self-Adaptive control</li></ol>The Self-Adaptive Control is based on feedback compensation because the parameters are measured on the basis of close-loop performance with the goal to optimize it. <h2>Need for Adaptive Control</h2>The main reason for using adaptive control is that most processes are nonlinear. The conventional controller is only able to maintain control loops that are designed to maintain the control variable at a set point, but once the process starts to operate beyond such variables, the changes in the functionality can be carried out by adaptive control. A change in the nature of inputs or changes in transfer function due to variations in parameters or coefficients can cause the conventional controller to cease working efficiently, justifying the need for adaptive control.

Adaptive Control

The ratio of the measured time required to produce a given output divided by the sum of the time required to produce a given output based on the rated efficiency of the machinery and labor operations.

Actual to Theoretical Cycle Time

Actual demand is composed of customer orders (and often allocations of items, ingredients, or raw materials to production or distribution). Actual demand nets against or “consumes” the forecast, depending upon the rules chosen over a time horizon. For example, actual demand will totally replace forecast inside the sold-out customer order backlog horizon (often called the demand time fence), but will net against the forecast outside this horizon based on the chosen forecast consumption rule.

Actual Demand

A cost system that collects costs historically as they are applied to production and allocates indirect costs to products based on the specific costs and achieved volume of the products.

Actual Cost System

The labor, material, and associated overhead costs that are charged against a job as it moves through the production process.

Actual Cost

How quickly a business can turn its assets into cash or sale is a good indicator of how well that business is being run. Activity Ratio measures how effectively a business uses its assets. It is commonly referred to as efficiency ratios; activity ratios are a fine indicator of how a company handles its inventory management.&nbsp; Management and accounting departments use multiple Activity Ratios to gauge the efficiency of their businesses. These Activity Ratios are as follows: <ol><li>Total Assets Turnover Ratio</li><li>Fixed Assets Turnover Ratio</li><li>Inventory Turnover Ratio</li><li>Accounts Receivable Turnover Ratio</li><li>Working Capital Ratio&nbsp;</li></ol>‍<h2>How to calculate activity ratio? </h2><ol><li>Total Assets Turnover Ratio : This ratio measures how fast a company turns its assets into revenue. It measures the efficiency with which a business uses its assets to generate sales.&nbsp;</li></ol>Total Assets Turnover Ratio = Sales / Average Total Assets <ol start="2"><li>Fixed Assets Turnover Ratio: This ratio measures the ability of the business to generate sales from Fixed assets such as property, plant, and equipment.</li></ol>Fixed Assets Turnover Ratio = Net Sales/ (Total Fixed Assets - Depreciation) <ol start="3"><li>Inventory Turnover Ratio: Reveals the number of times a company created its inventory and sold it over a certain period of time. It denotes the efficiency with which the inventory is managed.&nbsp;</li></ol>‍Inventory Turnover Ratio = Costs of Goods Sold/ Average cost of Inventory. <ol start="4"><li>Accounts Receivable Turnover Ratio : It depicts how efficiently a business provides credit to its customers and collects debts. To measure this ratio, only the credit sales are taken into account and not the cash sales.&nbsp;</li></ol>‍Accounts Receivable Turnover Ratio =&nbsp;Net Credit Sales/ Average Accounts Receivable‍It is a good sign when the accounts receivables turnover ratio is high since the debts are being paid on time. <ol start="5"><li>Working Capital Ratio : Working capital is current assets less current liabilities. The ratio helps the business figure out the net annual sales generated by the average amount of working capital for a year.</li></ol>‍Working Capital Ratio = Net sales/ Average Working Capital.

Activity Ratio

An arrow diagram used in planning and managing processes and projects.

Activity Network Diagram

A description of types of activities dependent on the functional area. Product-related activity levels may include unit, batch, and product levels. Customer-related activity levels may include customer, market, channel, and project levels.

Activity Level

<h2>What is Activity driver analysis?</h2>Activity driver refers to an activity driver analysis that identifies and analyses the factors involved in the costing of goods and services as a part of activity-based costing. This system understands the relationship between costs, overhead activities, and manufactured products. Through this relationship, it establishes indirect costs. The ADA factors in the different sources through which cost is driven. Its analysis includes the relationships between activities and factors that drive the cost of such activities and ultimately provides management the tool to measure whether certain activities are more costly and whether certain drivers are easier to measure. For example-An activity cost driver in a cloth manufacturing business is the number of orders placed. Now every department, from sourcing the fabric to sewing to the finished product, has a set amount of orders that must be completed every day. If the amount of order changes, the cost of production would change too.‍An increased number of orders would require the purchase of more fabric, additional workforce, and time required for assembly of the product. Thus one of the factors that drive cost is the number of units of a product being produced. <h2>Why is it important?</h2>An activity driver analysis allows the management to evaluate a company’s expenses. By pinpointing the exact source of different expenses, companies can analyze the unnecessary expenses and eliminate them. If one does not allocate cost to the factors driving activity, then the comparison between the costs of different products and services remains meaningless.‍Activity cost drivers are also important in project costs. There are, however, no accounting standards for the exact calculation of cost drivers. They are only used as a tool by the management in order to understand which activities are causing certain expenses and arriving at the accurate cost of producing particular products or businesses. Cost drivers are always an estimate.‍Accountants who evaluate cost drivers must possess a thorough understanding of the costs involved in the production of a particular good or service. Then they can determine an activity’s impact on the production of the product.

Activity Driver

A listing and description of activities that provides a common/standard definition of activities across the organization. An activity dictionary can include information about an activity and/or its relationships, such as activity description, business process, function source, whether value added, inputs, outputs, supplier, customer, output measures, cost drivers, attributes, tasks, and other information as desired to describe the activity.

Activity Dictionary

Activity-based planning (ABP) is an ongoing process to determine activity and resource requirements (both financial and operational) based on the ongoing demand of products or services by specific customer needs. Resource requirements are compared to resources available and capacity issues are identified and managed. Activity-based budgeting (ABB) is based on the outputs of activity-based planning.

Activity Based Planning (ABP)

<h2>What is activity-based management?</h2>Activity-based management is an approach that identifies and evaluates activities carried out by a business and uses activity-based costing to achieve a value chain analysis or take up a re-engineering initiative in order to improve strategic and operational decisions. It is a system that analyses and determines the profitability of every aspect of a business to highlight its losses and gains in such a way that the efficiency of an organization can be improved by focusing on the profitable aspects. <h3>How does it function?</h3>Activity-based management is used to analyze the cost of an activity in comparison to the value-added by the activity with the goal of strategic improvement.It can be done in the following ways <ol><li>Identification and Analysis: In activity-based management, it is important to identify the activities that have a significant impact on the finances of a business. It refers to listing out a company’s business activities in order to find the ones that have the most effect.</li></ol>The next step is identifying the cost that drives each activity based on the cost incurred. Cost drivers are the reason why the cost of activity varies.‍<ol start="2"><li>‍Evaluation and Value-Chain Analysis: In order to analyze further, the manager needs to analyze the cost of every activity by appropriating all direct and indirect costs related to the activity.</li></ol>For example, if a tailor runs sewing machines all day, that will be considered an important activity, the cost analysis will include the cost of labor and electricity.&nbsp;This is known as activity-based costing, where a method is used to assign the costs of every activity according to actual consumption, based on overhead expenses incurred during the activity.Additionally, the value generated by every activity should be quantified in relation to the cost incurred to analyze its impact. This is called value chain analysis, where value is added by a particular activity.&nbsp;<ol start="3"><li>Identifying Opportunities to Improve</li></ol>The information gathered from the aforementioned processes can be used to further identify and implement processes in the following ways <ul><li>Operational ABM</li></ul>&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Operational ABM allows managers to recognize any irregularities in the costing process and examine accordingly. Operational ABM requires the scrutinization of every activity and increased operational efficiency by enhanced value-generating<ul><li>Strategic ABM</li></ul>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strategic ABM involves the use of ABM to recognize their profitable products and target audience. It involves strategic management to understand the genre of a product, the channels through which it should be advertised, and targeting a certain demographic group of customers.‍

Activity Based Management (ABM)

A set of activity-based cost accounting models that collectively define data on an organization’s resources, activities, drivers, objects, and measurements.

Activity Based Costing System

In activity-based cost accounting, a model, by time period, of resource costs created because of activities related to products or services or other items causing the activity to be carried out.

Activity Based Costing Model

Activity-Based Costing (ABC) is a managerial accounting method that assigns certain indirect costs to the products incurring the bulk of those costs. Many large businesses, especially in the manufacturing sector, use this kind of costing system to accurately price their product. But, even Small businesses could greatly benefit from this.&nbsp;<h3>Actovity Based Costing Calculation</h3>Here is the ABC calculation: 1. List all the tasks necessary to produce the product. 2. Group the activities into cost pools, which incorporate each activity's unique costs (such as manufacturing's). Determine the overall cost of each cost pool. 3. Assign the cost drivers for each activity in the cost pool, such as hours or units. 4. To determine the cost driver rate, divide all overhead for each cost pool by all cost drivers. 5. To get the cost driver rate, divide each cost pool's total overhead by all of the cost drivers. 6. Multiply the number of cost drivers by the cost driver rate.<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/ABC.png" alt="Activity Based Costing" width="444" height="268" style="display: block; margin-left: auto; margin-right: auto;"><h3>Advantages and Disadvantages of Activity-based Costing:</h3>Advantages: ABC for small businesses is a great way to calculate overhead decisions and pricing products. ABC system helps you understand how Overhead is used, which helps you determine whether activities that are costing more than they should be substituted or cut off. &nbsp;You can assign costs to each activity in the production process, allowing you to set a price more accurately. Disadvantages: Many companies forgo ABC because an improper implementation can exceed the cost of implementing it more than the benefits gained from using it.

Activity Based Costing (ABC)

An approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types, number of and cost of resources that activities are expected to consume based on forecasted workloads. The budget is part of an organization’s activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals.

Activity Based Budgeting (ABB)

The process of identifying and cataloging activities for detailed understanding and Documentation of their characteristics. An activity analysis is accomplished by means of interviews, group sessions, questionnaires, observations, and reviews of physical records of work.

Activity Analysis

Activity is work performed to obtain measurable/quantifiable output from specific inputs.

Activity

Active Inventory refers to the raw materials (RM), work in process (WIP), and finished goods (FG) that are going to be used or sold in a specific accounting year.

Active Inventory

Bunker Adjustment Factor (BAF) is a floating freight charge or an additional charge which is levied to account for the fluctuation (increase) in the price of the ship's fuel. It is also known as 'Fuel Adjustment Factor.'&nbsp;It is based on the cost of Brent crude oil, which serves as a significant international oil price benchmark. The fuel price and a trade element must be considered when calculating the BAF:BAF = Fuel price x Trade factor The cost of fuel is determined by averaging the costs in major bunkering ports throughout the world.&nbsp;The trade factor is the variation in the average fuel consumption for a particular trade according to the:<ul><li>Weight of the load</li><li>Size of the container</li><li>Build of the ship</li><li>Fuel efficiency</li><li>Route</li><li>Vessel direction</li><li>Distance</li><li>Transit time, etc.</li></ul>Previously, the Transpacific Stabilisation Agreement (TSA), a system that fixed pricing and coordinated the behaviour of shipping companies, decided on the BAF once every three months. However, the TSA was dissolved in 2018 as a result of Maersk Line, its largest member, leaving. In order to prevent collusion, the European Commission regularly monitors the shipping lines' independent BAF tariffs, which are now determined by them.

Learn how the Bunker Adjustment Factor impacts your freight costs. Discover how to predict and manage fuel price fluctuations. Click now for insights!

Bunker Adjustment Factor (BAF): Mean and Formula

Bunker Adjustment Factor (BAF)

Break Bulk are loose materials that cannot be shipped in the standard containers. This type of cargo is loaded as separate/individual parts. Barrels, Drums, Paper reels, Project Cargo (which cannot be shipped in special equipment), palletized cargo, wooden containers, crates, balled, and bagged cargo are some examples of break bulk cargo.

Unleash the potential of Break Bulk shipping for non-standard cargo. From pallets to barrels, we've got you covered. Click now for more insights!

Break Bulk for Optimal Shipping

Break Bulk

Bonded Goods are landed import goods stored under the supervision of customs authorities in bonded warehouses for which the customs duty is yet to be paid. After customs clearance and payment of duty, bonded-goods are released for re-export. It may be released to the importer upon assessment and payment of taxes, import duties, and other charges.

Get the low-down on managing bonded goods effectively. Learn how customs duties impact your import strategy. Click now to enhance your trade knowledge!

Commonly Used Terms

Automated Clearing House (ACH)

F

M

P

More From Cogoport

Schedule a personalized 1:1

Subscribe to our newsletter now!

Cross-border Logistic

Domestic Logistics

Trade Management Solutions

Supply Chain Solutions

Financial Services

Our Logistics Providers

Partnership Program

Resources

Products

Partners

Tools

Company

Knowledge Center

Contact Us