FA
see Functional Acknowledgment

FAA
see Federal Aviation Administration

Fabricator
A manufacturer that turns the product of a raw materials supplier into a larger variety of products. A fabricator may turn steel rods into nuts, bolts, and twist drills, or may turn paper into bags and boxes.

Facilities
The physical plant, distribution centers, service centers, and related equipment.

Failure Modes Effects Analysis
A pro-active method of predicting faults and failures so that preventive action can be taken.

Fair Market Value
A price that would be acceptable on the open market for items or property of equivalent comparison.

Fair return
A level of profit that enables a carrier to realize a rate of return on investment or property value that the regulatory agencies deem acceptable for that level of risk.

Fair value
The value of the carrier’s property, the basis of calculation has included original cost minus depreciation, replacement cost, and market value.

Fair-share Quantity Logic
In inventory management, the process of equitably allocating available stock among field distribution centers. Fair-share quantity logic is normally used when stock available from a central inventory location is less than the cumulative requirements of the field stocking locations. The use of fair-share quantity logic involves procedures that ‘push’ stock out to the field, instead of allowing the field to ‘pull’ in what is needed. The objective is to maximize customer service from the limited available inventory.

FAK
see Freight-All-Kinds

FAS
(1) See Free Alongside Ship (2) See Final Assembly Schedule

FAST
see Fast and Secure Trade

Fast and Secure Trade
U.S. Customs program that allows importers on the U.S./Canada border to obtain expedited release for qualifying commercial shipments.

FB
see Freight Bill

FCA
see Free Carrier

FCL
see Full Container Load

Feature
A distinctive characteristic of a good or service. The characteristic is provided by an option, accessory, or attachment. For example, in ordering a new car, the customer must specify an engine type and size (option), but need not necessarily select an air conditioner (attachment).

Federal Aviation Administration
The federal agency charged with administering federal safety regulations governing air transportation.

Federal Maritime Commission
A regulatory agency that controls services, practices, and agreements of international water common carriers and noncontiguous domestic water carriers.

Feeder
Transportation conveyance utilised to relay cargo from the mother vessel to ultimate destination or from first receipt port to mother vessel.

Feeder Railroad Development Program
Any financially responsible person (except Class I and Class II carriers) with ICC approval can acquire a rail line having a density of less than 3 million gross ton-miles per year.

FEU
see Forty-foot equivalent unit

FF&E
see Furniture, Fixtures and Equipment

FFE
See Forty-foot Equivalent Unit.

FFG
see Field Finished Goods

FGI
see Finished Goods Inventory

Field Finished Goods
Inventory maintained at locations outside of the manufacturing plant (i.e., distribution center (dc) or warehouse).

Field Purchase Order
A document used to order goods from a supplier for purchases limited to a certain dollar amount with purchasing authority delegated by a central procurement office.

Field Service
See After-Sale Service

Field Service Parts
Parts inventory kept at locations outside the four walls of the manufacturing plant (i.e., distribution center or warehouse).

Field Warehouse
Warehouse that stores goods on the goods’ owner’s property while the goods are under a bona fide warehouse manager’s custody. The owner uses the warehouse receipts as collateral for a loan.

FIFO
see First In First Out

File Transfer Protocol
The Internet service that transfers files from one computer to another, over standard phone lines.

Filed rate doctrine
The legal rate the common carrier may charge, is the rate published in the carrier’s tariff on file with the ICC.

Fill Rate
The percentage of order items that the picking operation actually fills within a given period of time.

Fill Rates by Order
Whether orders are received and released consistently, or released from a blanket purchase order, this metric measures the percentage of ship-from-stock orders shipped within 24 hours of order ‘release’. Make-to-Stock schedules attempt to time the availability of finished goods to match forecasted customer orders or releases. Orders that were not shipped within 24 hours due to consolidation but were available for shipment within 24 hours are reported separately. In calculating elapsed time for order fill rates, the interval begins at ship release and ends when material is consigned for shipment.Calculation: [Number of orders filled from stock shipped within 24 hours of order release] / [Total number of stock orders] Note: The same concept of fill rates can be applied to order lines and individual products to provide statistics on percentage of lines shipped completely and percentage of products shipped completely.

Final Assembly
The highest level assembled product, as it is shipped to customers. This terminology is typically used when products consist of many possible features and options that may only be combined when an actual order is received. Also see: End Item, Assemble to Order

Final Assembly Schedule
A schedule of end items to finish the product for specific customers’ orders in a make-to-order or assemble-to-order environment. It is also referred to as the finishing schedule because it may involve operations other than just the final assembly, also, it may not involve assembly, but simply final mixing, cutting, packaging, etc. The FAS is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked (or master scheduled) to the end-item level.

Final Destination
Last stopping location for a shipment.

Financial Lease
An equipment-leasing arrangement that provides the lessee with a means of financing for the leased equipment, a common method for leasing motor carrier trailers.

Financial responsibility
Motor carriers are required to have body injury and property damage (not cargo) insurance or not less than $500,000 per incident per vehicle, higher financial responsibility limits apply for motor carriers transporting oil or hazardous materials.

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

Finished Goods Inventory
Products that are completely manufactured, packaged, stored, and ready for distribution.

Finite Forward Scheduling
An equipment scheduling technique that builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits. A Gantt chart may be used with this technique. Also see: Finite Scheduling

Finite Scheduling
A scheduling methodology where work is loaded into work centers such that no work center capacity requirement exceeds the capacity available for that work center. See: drum-buffer-rope, finite forward scheduling.

FIO
Free In Free Out.

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

Firewall
A computer term for a method of protecting the files and programs on one network from users on another network. A firewall blocks unwanted access to a protected network while giving the protected network access to networks outside of the firewall. A company will typically install a firewall to give users access to the Internet while protecting their internal information.

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

Firm Planned Order
A planned order which has been committed to production. Also see: Planned Order

First In First Out
(1) The practice of using stock from inventory on the basis of what was received first and is consumed first. (2) Warehouse term meaning first items stored are the first used. In accounting this tem is associated with the valuing of inventory such that the latest purchases are reflected in book inventory. Also see: Book Inventory

First Mover Advantage
Market innovator, putting the company in the leadership position.

First Pass Yield
The ratio of usable, specification conforming output from a process to its input, achieved without rework or reprocessing.

Fixed Costs
Costs, which do not fluctuate with business volume in the short run. Fixed costs include items such as depreciation on buildings and fixtures.

Fixed interval inventory model
A setup wherein each time an order is placed for an item, the same (fixed) quantity is ordered.

Fixed Interval Order System
See Fixed Reorder Cycle Inventory Model

Fixed Order Quantity
A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof if net requirements for the period exceed the fixed order quantity.

Fixed Order Quantity System
See Fixed Reorder Cycle Inventory Model

Fixed Overhead
Traditionally, all manufacturing costs, other than direct labor and direct materials, that continue even if products are not produced. Although fixed overhead is necessary to produce the product, it cannot be directly traced to the final product. Also see: Indirect Cost

Fixed Price Sale
A sale that is firm, cannot be negotiated.

Fixed Reorder Cycle Inventory Model
A form of independent demand management model in which an order is placed every ‘n’ time units. The order quantity is variable and essentially replaces the items consumed during the current time period. Let ‘M’ be the maximum inventory desired at any time, and let x be the quantity on hand at the time the order is placed. Then, in the simplest model, the order quantity will be M x. The quantity M must be large enough to cover the maximum expected demand during the lead time plus a review interval. The order quantity model becomes more complicated whenever the replenishment lead time exceeds the review interval, because outstanding orders then have to be factored into the equation. These reorder systems are sometimes called fixed-interval order systems, order level systems, or periodic review systems. Synonyms: Fixed- Interval Order System, Fixed-Order Quantity System, Order Level System, Periodic Review System, Time-Based Order System. Also see: Fixed Reorder Quantity Inventory Model, Hybrid Inventory System, Independent Demand Item Management Models,

Fixed Reorder Quantity Inventory Model
A form of independent demand item management model in which an order for a fixed quantity is placed whenever stock on hand plus on order reaches a predetermined reorder level. The fixed order quantity may be determined by the economic order quantity, by a fixed order quantity (such as a carton or a truckload), or by another model yielding a fixed result. The reorder point may be deterministic or stochastic, and in either instance is large enough to cover the maximum expected demand during the replenishment lead time. Fixed reorder quantity models assume the existence of some form of a perpetual inventory record or some form of physical tracking, e.g., a two-bin system that is able to determine when the reorder point is reached. Synonym: Fixed Order Quantity System, Lot Size System, Order Point-Order Quantity System, Quantity Based Order System. Also see: Fixed Reorder Cycle Inventory Model, Hybrid Inventory System, Independent Demand Item Management Models, Optional Replenishment Model, Order Point Order Management System

Fixed Slot
A slot reserved for a specific stock keeping unit.

Fixed-Location Storage
A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location storage system, fixed locations become familiar, and therefore a locator file may not be needed. Also see: Random-Location Storage

Fixed-Period Requirements
A lot-sizing technique that sets the order quantity to the demand for a given number of periods. Also see: Discrete Order Quantity

Fixed-Price Contract
A contract requiring that prices remain firm. During the term of such contracts the contractor must absorb any increases which would reduce the profit.

Fixed-Price Contract with Economic Price Adjustmen
A contract which allows price increase or reductions. The price increases should be based on a periodical percentage or an allowable index stated in the contract.

Flag of convenience
A shipowner registers a ship in a nation that offers conveniences in the areas of taxes, manning, and safety requirements, Liberia and Panama are two nations known for flags of convenience.

Flat
A loadable platform having no superstructure whatever but having the same length and width as the base of a container and equipped with top and bottom corner fittings. This is an alternative term used for certain types of specific purpose containers - namely platform containers and platform-based containers with incomplete structures

Flat Bed
Truck designed to haul heavy or oversized non-containerisable cargo.

Flat File
A computer term which refers to any file having fixed-record length, or in EDI, the file produced by EDI translation software to serve as input to the interface. Usually includes the same fields as the original file, but each field is expanded to its maximum length. Does not have delimiters.

Flatbed
Open truck or trailer without sides or top that generally is used for bulky, oversized items.

Flatcar
A rail car without sides, used for hauling machinery.

Flexibility
Ability to respond quickly and efficiently to changing customer and consumer demands.

Flexible Specialization
a strategy based on multi-use equipment, skilled workers and innovative senior management to accommodate the continuous change that occurs in the marketplace.

Flexible-path equipment
Materials handling devices that include hand trucks and forklifts.

Float
The time required for documents, payments, etc. to get from one trading partner to another.

Floating Cranes
Heavy duty cranes that are able to handle exceptionally heavy cargo if unable to use conventional gantry cranes.

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 a block.

Floor-Ready Merchandise
Goods shipped by suppliers to retailers with all necessary tags, prices, security devices, etc. already attached, so goods can be cross docked rapidly through retail DCs, or received directly at stores.

Flow rack
‘Storage rack that utilizes shelves (metal) that are equipped with rollers or wheels. Such an arrangement allows product and materials to ”flow” from the back of the rack to the front and therein making the product more accessible for smallquantity order-picking.’

FMC
see Federal Maritime Commission

FMEA
see Failure Modes Effects Analysis

FOB
see Free On Board

Force Majeure
A state of emergency or condition that permits a company to depart from the strict terms of contract because of an event or effect that cannot be reasonably anticipated or controlled, i.e: beyond human control (French superior or irresistible force). Compare: ACT OF GOD, INEVITABLE ACCIDENT, VIS MAJOR.

Forecast
An estimate of future demand. A forecast can be constructed using quantitative methods, qualitative methods, or a combination of methods, and it can be based on extrinsic (external) or intrinsic (internal) factors. Various forecasting techniques attempt to predict one or more of the four components of demand: cyclical, random, seasonal, and trend. Also see: Box-Jenkins Model, Exponential Smoothing Forecast, Extrinsic Forecasting Method, Intrinsic Forecasting Method, Qualitative Forecasting Method, Quantitative Forecasting Method

Forecast Accuracy
Measures how accurate your forecast is as a percent of actual units or dollars shipped, calculated as 1 minus the absolute value of the difference between forecasted demand and actual demand, as a percentage of actual demand.Calculation: [1-(|Sum of Variances|/Sum of Actual)]

Forecast Cycle
Cycle time between forecast regenerations that reflect true changes in marketplace demand for shippable endproducts.

Forecasting
The systematic development of an estimated future requirement determined from past experience, usage trends, technology advances, planned activity and any other factors deemed relevant.

Foreign Trade Zone
Special restricted-access commercial and industrial areas in or near ports of entry that are designated by the government for duty-free entry of any non-prohibited goods. Foreign and domestic merchandise, including raw materials, components, and finished goods may be stored, displayed, and used for manufacturing within the zone and re-exported without duties being paid. Duties are imposed only when the original goods or items manufactured from those goods pass from the zone into an area of the country subject to Customs authority.

For-hire carrier
A carrier that provides transportation service to the public on a fee basis.

For-Hire Carriers
Persons or firms engaged in the transportation of goods or passengers for compensation. Classified into two general categories, specialised and general freight motor carriers.

Forklift Truck
A machine device used to raise and lower freight and to move freight to different warehouse locations.

Form utility
The value created in a good by changing its form, through the production process.

Formal Advertising
A legal notification made public to advise that a government agency is requesting bids with a certain intention of purchase. Such advertising may be placed in newspapers or other publications meeting legal requirements.

Forty-foot equivalent unit
A standard size intermodal container.

Forward Procurement
Purchasing in larger volumes which exceed current needs. A method used when items may sometimes be in limited supply or unavailable, or to realize volume discounted pricing.

Forwarder’s Cargo Receipt
A non-negotiable document issued by a forwarder which will satisfy the legal requirements of a letter of credit. Since a forwarder is not an NVOCC it cannot issue actual bills of lading. The FCR is legally binding upon the forwarder and is an industry standard.

Four Party Logistics Provider
Businesses that manage a variety of logistics related services for clients by using Third Party Logistics Providers (3PL). The provider integrates the technology and does not perform any of the services. Differs from third party logistics in the following ways,1. 4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners, 2. 4PL organization acts as a single interface between the client and multiple logistics service providers, 3. All aspects (ideally) of the client’s supply chain are managed by the 4PL organization, and, 4. It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure.

Four P’s
A set of marketing tools to direct the business offering to the customer. The four P’s are product, price, place, and promotion.

Four Wall Inventory
The stock which is contained within a single facility or building.

Fourier Series
In forecasting, a form of analysis useful for forecasting. The model is based on fitting sine waves with increasing frequencies and phase angles to a time series.

Free Alongside Ship
Incoterm. Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. the export clearance obligation rests with the seller.

Free Carrier
Incoterm. Title and risk pass to buyer including transportation and insurance cost when the seller delivers goods cleared for export to the carrier.Seller is obligated to load the goods on the Buyer’s collecting vehicle, it is the Buyer’s obligation to recieve the Seller’s arriving vehicle unloaded.

Free On Board
Incoterm. Title and risk pass to buyer including payment of all transportation and insurance cost once delivered on board the ship by the seller. Used for sea or inland waterway transportation.

Free Time
Time allowed for shippers or consignees/receivers to load or unload cargo before demurrage, detention and other charges accrue.

Freezing inventory balances
‘In most cycle counting programs the term ”freezing” refers to copying the current on-hand inventory balance into the cycle count file. This may also be referred to as taking a snapshot of the inventory balance. It rarely means that the inventory is actually frozen in a way that prevents transactions from occurring.’

Freight
Goods that are transported from one place to another.

Freight Bill
Document for a shipment noting description of the freight, its weight, and amount of carrier’s invoice for payment of transport services rendered.

Freight Carriers
Companies that transport freight by trucking, railroads, airlines, and sea borne shipping.

Freight Cashier
Responsible for collections of freight/charges/release of cargo/release of bills of ladings. (1) Person engaged in assembling, collecting, consolidating shipping and distributing less than trailerload freight. (2) Also, a person acting as an agent in the transshipping of freight to or from foreign countries and clearing freight through federal customs.

Freight Charge
The rate that has been established for transporting freight.

Freight Collect
The freight and charges to be paid by the consignee of the order.

Freight Consolidation
The grouping of shipments to obtain reduced costs or improved utilization of the transportation function. Consolidation can occur by market area grouping, grouping according to scheduled deliveries, or using third-party pooling services such as public warehouses and freight forwarders.

Freight Forwarder
An organization which provides logistics services as an intermediary between the shipper and the carrier, typically on international shipments. Freight forwarders provide the ability to respond quickly and efficiently to changing customer and consumer demands and international shipping (import/export) requirements.

Freight Forwarders Institute
The freight forwarder industry association.

Freight Release
Evidence that the freight charges for the cargo have been paid. If in writing, it may be presented at the pier to obtain release of the cargo. Normally, once the freight is paid, freight releases are arranged without additional documentation. Also known as freight bill receipt.

Freight-All-Kinds
Consolidated cargo that is shipped at one rate. FAK cargo is usually shipped in a container filled with a variety of merchandise or commodities.

FRM
see Floor-Ready Merchandise

Frozen Zone
In forecasting, this is the period in which no changes can be made to scheduled work orders based on changes in demand. Use of a frozen zone provides stability in the manufacturing schedule.

FTE
see Full-time Equivalents

FTL
see Full Truckload

FTP
see File Transfer Protocol

FTZ
see Foreign Trade Zone

Fuel
Actual cost of fuel for material handling equipment and delivery vehicles.

Fulfillment
The act of fulfilling a customer order. Fulfillment includes order management, picking, packaging, and shipping.

Full Container Load
(1) A delivery of cargo that fills a given container either by bulk or maximum weight. (2) Containers are charged a specific rate for ocean transit regardless of their (lack of) contents. A full container will thus offer a better price per unit shipped than will a LCL.

Full Truckload
A shipment of cargo that fills a given tractor-trailer either by bulk or maximum weight.

Full Visible Capacity
The trailer is loaded as full as the nature of the freight and other conditions permit, so that no more of the same type of freight can be loaded, consistent with safety and damage precautions.

Full-Service Leasing
An equipment-leasing arrangement that includes a variety of services to support leased equipment (i.e., motor carrier tractors).

Full-time Equivalents
Frequently organizations make use of contract and temporary employees, please convert contract, part-time, and temporary employees to full-time equivalents. For example, two contract employees who worked for six months full-time and a half-time regular employee would constitute 1.5 full-time equivalents. 1FTE = 2000 hours per year.

Fully allocated cost
The variable cost associated with a particular unit of output plus an allocation of common cost.

Functional Acknowledgment
A specific EDI Transaction Set (997) sent by the recipient of an EDI message to confirm the receipt of data but with no indication as to the recipient application’s response to the message. The FA will confirm that the message contained the correct number of lines, etc. via control summaries, but does not report on the validity of the data.

Functional Group
Part of the hierarchical structure of EDI transmissions, a Functional Group contains one or more related Transaction Sets preceded by a Functional Group header and followed by a Functional Group trailer

Functional or Performance Specification
A specification which would place emphasis on describing a result or capability to be accomplished by a commodity or service. A method of inspection or testing may be included.

Functional Silo
‘A view of an organization where each department or functional group is operated independent of other groups within the organization. Each group is referred to as a ”Silo”. This is the opposite of an integrated structure. ‘

Furniture, Fixtures and Equipment
Types of items that can be arranged for installation or de-installation through a Logistics company. See FF&E.

Future order
An order entered for shipment at some future date. This may be related to new products which are not currently available for shipment, or scheduling of future needs by the customer.

Factory Gate Pricing
a way to coordinate the flow of materials in a supply chain where the key player is taking over management of logistics. As retailers are increasing their power, they want more control of logistics. With factory gate pricing, a single organisation -often a retailer- takes responsibility of delivery from the factory gate to teh final customer.