Dictionary of Procurement Terms

The amount of money required to repay the principal and interest on a debt for each defined payment interval (e.g., month or year) during the term of the loan.

Received resources from other funds, taxes, grants, or proceeds from long-term debt that are used to pay the principal and interest on the debt.

Ratio calculated by dividing a business' total liabilities by its equity to measure the degree to which a business is financing its operations through debt.

An organizational structure in which decision-making and daily operations are delegated by the upper level of an organization and distributed among lowerlevel organization units.

An organizational structure in which designated personnel/operating departments from within the organization have the delegated authority to select the sources of supply and contract directly with suppliers without consulting or receiving approval from the chief procurement officer (CPO). It should be noted that the scope and degree, if any, of decentralized procurement varies from agency to agency. See also: Centralized Purchasing.

A chart or diagram in which each branch of a tree represents an outcome, decision, or reaction that is used to determine a statistical probability or course of action.

1. The monetary value placed by a shipper on a shipment of goods when it is delivered to the carrier. 2. The value placed on imported goods by an importer for clearance through customs.

Failure to fulfill a contractual obligation (e.g., failure to repay a debt, properly perform work, or perform work by an agreed-upon date).

An imperfection or shortcoming, especially one that renders a good unable to be used for the ordinary purposes pursuant to the warranty for which it is sold and used. See also: Latent Defect.

1. The number of defects found in any quantity of a product, divided by the total number of units, then multiplied by one hundred. 2. The average number of defects per hundred.