Dictionary of Procurement Terms

Radio Frequency Identification (RFID) refers to a wireless system comprised of two components: Tags and readers. Tags use radio waves to communicate their identity and a range of information from one serial number to several pages of data to nearby readers. The reader is a device that has one or more antennas that emit radio waves and receive signals back from the RFID tag. (USFDA, 2014)

A technique that results in a representative subset of the population where each element has the same chance of being selected as every other element in the population; such as to select items from the inspection lot so each item in the lot has an equal chance of being included in the sample. A form of quality assurance often used in modern polling, market research, and manufacturing.

As applied to the transportation or movement of goods and material, the cost of, or charge, that applies to the service rendered by the carrier.

Calculations that measure an organization’s financial health. Often mentioned in financial information provided by a public company to determine if they are a responsible bidder/proposer. (Business, 2002)

Items bought for use in the manufacturing process of a business. May include components, subassemblies, and complete products. Generally includes virgin materials such as wood, steel, and petroleum products. (Business, 2002)

1. A privilege extended to shippers allowing goods to be forwarded to a point other than the original destination without removal from the carrier and at the through rate from initial point to that of final delivery. 2. A change, as in consignee, destination, or route, in the original billing of goods in transit.

The quantity of goods required to sustain operations for a specified period of time, after which time, orders will be placed for more goods.