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FEE
In cost reimbursement contracts , an agreed upon amount beyond
the initial cost estimate , usually reflecting a variety of
factors, including risk and services. The fee may be fixed
initially (Cost-plus-fixed-fee arrangement) or it may vary
(cost-plus-incentive-fee or cost-plus-award-fee arrangement)
FIFO
First in - First out, describes the flow
of inventory. It is average costing where rather than keeping
track of the inventory value of individual units of the same
item separately, they are averaged so that all units of the
same items of inventory have the same value
Fill Rate
The percentage of requisitions filled
from stock present on the shelf. The inverse of it is "Stock
out rate"
Financial Lease
Financing for the full life of a piece
of equipment
Finished Goods
Goods that have completed the
manufacturing or assembly process and are ready for sale to
external customers
Firm Bid
It's a legal offer to sell which can
become a contract simply on acceptance by the buyer
Force Majeure
Major and usually uncontrollable
events, that excuse a party from the performance of its
obligations. The contract provision is referred to as the "Act
of God" and is kept in the contract to protect both the
purchaser as well as the supplier
Forecasting
Projection of future business conditions
and their impact on the organisation
Foreign Freight Forwarder
A party that acts to arrange for export
and import movement of goods for shippers and consignees
Form, Fit & Function
An overall quality related term common
in purchase agreements that encompasses the physical
attributes of something (from), its desired outputs or
performance (function) and fitness (appropriate for the
application)
Forward Buying
Buying in excess of current
requirements, as a strategy because of an anticipated
shortages, strikes, price increase etc
Free Alongside Vessel
Under this arrangement, the supplier
agrees to deliver the goods in proper condition along side the
vessel. The buyer assumes all subsequent risks and expenses
after delivery to the pier
Free On Board
These are shipping terms under which
title is transferred between the supplier and the purchaser at
the FOB point. There are many arrangements under FOB
such as:
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FOB destination
: Under it the seller bears risk until the goods are
transported to the buyer's dock, after which the risk will
pass to the buyer.
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FOB destination,
Freight collect
: Title passes
from the supplier to the buyer at the destination point and
freight charges are the responsibility of the purchaser. The
supplier owns the goods in transit and is responsible for
filling loss and damage claims against the carrier, but the
purchaser pays and bears the freight charges and files any
overcharge claims.
*
FOB destination,
Freight prepaid
: Title passes from the supplier to the buyer at destination
point and freight charges are paid by the supplier. The
supplier pays and bears the freight charges, owns the goods in
transit and may file claims for overcharges, loss and damage.
*
FOB destination,
Freight prepaid and Invoiced
: Title passes at the destination point, freight charges are
paid by the supplier and added to the invoice. The supplier
pays the freight charges, owns the goods in transit and
file claims for overcharges, loss and damage. The purchaser
ultimately bears the freight charges.
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FOB Origin
: The seller bears the risk until it loads the goods onto an
appropriate carrier after which the buyer assumes the risk of
loss and must claim against the carrier for damage or loss in
transit.
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FOB Origin,
Freight allowed
: Purchaser obtains title where the shipment originates and is
responsible for all claims against the carrier but the
supplier pays the freight charges.
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FOB Origin,
Freight Collect
: Title passes on
to the buyer at the point of origin and the buyer must pay the
freight charges. The buyer owns the goods in transit and files
all claims against the carrier.
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FOB Origin,
Freight Prepaid and Invoiced
: Title passes to the buyer at the point of origin , freight
charges are paid by the supplier and then collected from the
purchaser by adding them to the invoice. The supplier pays the
freight charges and files claims for overcharges. The
purchaser bears the freight charges , owns the goods in
transit and files claims for loss and damage with the carrier.
Free Trade
The uninhibited flow of goods and
services across national boundaries
Free Trade Zone
A site in which imported goods are
exempted from custom duties. Countries establish it to
encourage economic development such as manufacturing and
distribution
Freight Bill
The carrier's invoice for transportation
charges applicable to a shipment
Freight Claim
A claim against a carrier due to loss of
, or damage to, goods transported by that carrier, also for
erroneous rates and weights in assessment of freight charges
Freight Forwarder
A
third party , licensed to make transportation arrangements
Functional Acknowledgement
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