Chapter 2 Definitions Flashcards
A stakeholder within the organisation, such as a department or function.
Internal Stakeholder
This is a stakeholder that has a strong interest in a companies activities.
Connected Stakeholder
A stakeholder outside the buying organisation.
External Stakeholder
The 8 Wastes - TIMWOODS
- Transportation
- Inventory
- Motion
- Waiting
- Over-production
- Over-processing
- Defects
- Skills
This involves buying a quantity greater than the volume currently required in order to avoid future price increases.
Forward Buying
Price rises caused by an increase in demand.
Demand driven inflation
Price rises caused by a lack of supply side infrastructure.
Supply driven inflation
A deal that a buyer can undertake to try to mitigate the effect of price increases. It involves buying similar quantities of the same product in two separate markets at the same time on the basis that a price increase in one market will be offset by a price decrease in the other market.
Hedging
A form of hedging where the organisation takes out an option to buy or sell at given day or more flexibly in a given period.
Option
A form of hedging where the organisation takes out a contract to buy or sell at a given price on a given day.
Futures contract
An identified weakness in a system for which there is no immediate remedy.
Single point of failure
A third party account to facilitate an international transaction, managing the flow of trust and funds through a trusted independent intermediary often using a letter of credit.
Escrow account
A document stating an agreement between the buyers bank and the sellers bank to transfer funds in exchange for goods or services in a contract, on presentation of valid documents.
Letter of credit
