First Expired, First Out (FEFO)

A stock control rule allows for the management of products with an eat-by date or short shelf life. FEFO can be used for any product, but it is most frequently used for food or cold storage.

First in, first out (FIFO)

This inventory replenishment method prioritizes items that arrive first at a facility.

First In, First Out (FIFO)

Warehousing term meaning that the first items stored are the first used. In accounting, this term is associated with the valuing of inventory, such that the latest purchases are reflected in book inventory. While generally considered an accounting notion, FIFO usage is common where products may have a shelf life.

First Mover Advantage

Market innovator, putting the company in a leadership position.

Fixed Costs

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

Fixed Interval Inventory Model

A setup in which each time an order is placed for an item, the same (fixed) quantity is ordered.

Fixed-Location Storage

A stocking strategy that uses set warehouse locations assigned to each SKU. If additional storage is required, the excess stock will be placed in an 'overflow' area with appropriate cross-references in systems or on bin labels. Locations are typically reviewed periodically as part of a slotting strategy.

Fixed Order Quantity

An inventory reorder method that causes all replenishment orders to be of a pre-determined size or a multiple thereof. This is typically introduced to accommodate price breaks, packaging, or shipping requirements.

Fixed Overhead

Cost elements such as depreciation, rent, insurance, office expenses, etc., do not vary as a result of output volume or sales revenue.

Fixed-Period Requirements

A reorder technique where the quantity to be ordered should be enough to cover forecast requirements for a fixed number of periods.

Fixed Price (FP)

A type of contract where a specified price is paid for a specific product, service, or goal, also referred to as FFP or Firm Fixed Price.

Fixed Quantity Inventory Model

A setup wherein a company orders the same (fixed) quantity each time it places an order for an item.

Fixed Reorder Cycle Inventory Model

A reordering strategy is implemented where orders are placed on a fixed order schedule, and the order quantity is adjusted from order to order to accommodate actual consumption or forecast requirements.

Fixed Reorder Quantity Inventory Model

A reordering strategy is implemented where orders are placed for a fixed order quantity whenever the quantity on hand, plus the quantity on order, reaches a predefined order point.

Flag of Convenience

A ship owner 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 has no superstructure whatsoever but has the same length and width as the base of a container. It is 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.

Flatbed

A flatbed is a type of truck trailer that consists of a floor and no enclosure. A flatbed may be used with 'sideboards' or 'tie downs' which keep loose cargo from falling off.

Flatcar

A railcar without sides, used for hauling machinery.

Flexibility

Ability to respond quickly and efficiently to changing customer and consumer demands. Flexible-Path Equipment: Materials handling devices that include hand trucks and forklifts.

Flexible Specialization

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

Float

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

Floor loaded

This is a method of freight shipping where a container is loaded with inventory directly on the floor, as opposed to palletized (where inventory is loaded on pallets).

Floor loading

Containerized freight is usually not palletized; instead, the bottom layer of boxes is loaded onto the floor of the container. As a result, more boxes can be loaded into a container, but the containers take much longer to unload.

Floor-Ready Merchandise (FRM)

Goods shipped by suppliers to retailers with all necessary tags, prices, security devices, etc., already attached so that goods can be cross-docked rapidly through retail distribution centers (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 products and materials to 'flow' from the back of the rack to the front, thereby making the products more accessible for small-quantity order picking.

Flow-Through Distribution

A process in a distribution center in which products from multiple locations are brought into the D.C. and are re-sorted by delivery destination and shipped on the same day. Typically involving a combination of TL and LTL carrier resources, this practice eliminates warehousing, reduces inventory levels, and speeds up order turnaround time. Also known as a 'cross-dock' process in the transportation business. See Cross Docking.

FMC

Full Mission Capable.

FMCG

Fast-moving consumer goods.

FMEA

Failure Modes and Effects Analysis

FOB

Free on Board

FOB Destination

Title passes at the destination, and the seller has total responsibility until the shipment is delivered.

FOB Origin

Title passes at origin, and the buyer has total responsibility over the goods while in shipment.

Forecast

An estimate of future customer demand, forecasts are typically made using scientific techniques based on historical usage and adjusted to accommodate various factors such as life cycle, cyclical usage patterns, promotions, and pricing actions. Also, see Box-Jenkins Model, Exponential Smoothing Forecast, Extrinsic Forecasting Method, Intrinsic Forecasting Method, Qualitative Forecasting Method, and Quantitative Forecasting Method.

Forecast Accuracy

A measurement of the level of accuracy inherent in your forecast, as a percent of actual units or dollars shipped, is called forecast accuracy. In the supply chain, forecast accuracy is typically measured using the Mean Absolute Percent Error (MAPE). However, there are confusions between the statistical definition of MAPE and its application among supply chain planners. Statistically, MAPE is defined as the average of percentage errors. Most practitioners, however, define and use the MAPE as the Mean Absolute Deviation divided by Average Sales. You can think of this as a volume-weighted MAPE. In some references, this is also referred to as the mean absolute difference (MAD)/mean ratio.

Forecast Cycle

Cycle time between forecast regenerations that reflect true changes in marketplace demand for shippable end products.

Forecasting

Predictions of how much of a product will be purchased by customers rely upon both quantitative and qualitative methods. Also, see Forecast.

Foreign Trade Zone (FTZ)

An area or zone set aside at or near a port or airport, under the control of the U.S. Customs Service, for holding goods duty-free pending customs clearance.

For-hire carrier

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

Forklift Truck

A machine-powered device that is 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.

Forty-foot equivalent unit (FEU)

This measurement-based acronym refers to a standard forty-foot container size used in warehousing and shipping.

Forward stocking

This is the practice of leveraging smaller warehouses (usually several) that are strategically located to offer fast shipping to customers.

Fourier Series

A mathematical equation used in forecasting, an infinite series in which the terms are constants multiplied by sine or cosine functions of integer multiples of the variable, and which is used in the analysis of periodic functions.

Four P’s

A set of four elements referred to as the 'marketing mix', it is a set of controllable tactical marketing tools that work together to achieve company objectives. The elements are product, price, place, and promotion.

Fourth party logistics (4PL)

These providers play a more comprehensive role in orchestrating end-to-end logistics across multiple pieces, including transportation, warehousing, and fulfillment. A fourth-party provider may coordinate across multiple different 3PLs on behalf of a client.

Fourth-Party Logistics (4PL)

Differs from third-party logistics in the following ways: 1) A 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) A 4PL organization acts as a single interface between the client and multiple logistics service providers. 3) Ideally, all aspects of the client's supply chain are managed by the 4PL organization. 4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure. The term was registered by Accenture as a trademark in 1996 and defined as 'A supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organization with those of complementary service providers to deliver a comprehensive supply chain solution.' However, it is no longer registered.

Four Wall Inventory

The stock is contained within a single facility or building.

Foxhole

Also frequently called 'foxhole' or 'stovepipe', silo mentality relates to a management/organizational style where each functional unit operates independently and with little or no collaboration between them and other units regarding major business processes and issues.