211 / 252
199
CHAPTER 8
GLOSSARY
Abandonment:
Surrendering the claim to goods (and/or a ship) so damaged during
a voyage as to render them worthless to the owners who choose to
abandon their rights and interest in these in favour of the underwriter
and prefer their claims under the insurance cover. Abandonment
is the basis for a claim to be preferred under a policy of marine
insurance for constructive total loss.
ABC inventory
control:
Selective approach in inventory control in which stocked items
are classified into Group; % of stock Items; % of stock value. The
system suggests that the stock of items in Group A, for example,
which accounts for only 10% of the number of items but 70% of the
total stock value, should be continually reviewed so as to maintain
the minimum necessary level, and reduce holding costs. As a
consequence of the lesser value of stocks in the other groups, and
the increased complexity of stock control due to the larger number
of items, the system proposes that less attention be paid to Groups
B and C. See also Inventory control.
Acceptable quality
level:
System of material inspection based on statistical probability
(sampling) theory checking only a certain percentage of the lot
delivered, and accepting the lot if the number of defectives in the
sample is less than or equal to the acceptable number. See also
Inspection lot sampling and Quality control.
Acceptance of goods:
The buyer is said to have accepted the goods, works or services
supplied by the supplier when he does not reject them, in whole
or part, for non-conformance to contract terms and conditions, e.g.
quality, delivery schedule, etc. See also Provisional acceptance,
Final acceptance.
Acceptance of order:
In case the contract is not based on any specific tender/offer made
by a tenderer this is the confirmation of the receipt and acceptance
of the order to supply goods, works or services as stipulated in the
order.
Acceptance of tender
(Offer):
The assent of the buyer to a tender/offer made by the tenderer.
A necessary element of a contract is the unqualified acceptance
by the buyer of a tender/offer made by one tenderer. If the buyer
amends or adds elements of the tender/offer previously received
this leads to a new offer from his side to the tenderer to conclude
a contract based on revised or changed terms and conditions. See
also Counter offer.
Acknowledgement of
contract:
Acommunication by a tenderer advising the buyer of the acceptance
of his order. The contract comes into force following the unconditional
acceptance of the tender/offer made by the tenderer through the
buyer. This acknowledgement is used for information purposes only.
Acquisition cost:
The total sum of the procurement costs in order to obtain a contract.