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Cost objects consume activities and activities consume resources

An approach to budgeting where a company uses an understanding of its activities and driver relationships to quantitatively estimate workload and resource requirements as part of an ongoing business plan. Budgets show the types of as well as number of and cost of resources that activities are expected to consume based on forecasted workloads.

A methodology that measures the cost and performance of cost objects, activities and resources. Resource costs are assigned to activities based on their use of those resources, and activity costs are reassigned to cost objects (outputs) based on the cost objects proportional use of those activities. Activity-based costing incorporates causal relationships between cost objects and activities and between activities and resources.

One of Vested’s 10 Ailments (see explanation of Vested below) that refers to an outsourcing paradox typically found in Transaction-Based Sourcing Business Models. The service provider https://installmentloansvirginia.net/cities/luray/ is paid for every transaction.

Ad valorem taxes (mainly real property tax and sales taxes) in the context of Sourcing and Procurement are customs duties charged on the value of goods that are dutiable, irrespective of quality, weight or any other considerations. Ad valorem rates are a fixed percentage based on the value of the goods, as determined by the invoice cost.

The budget is part of an organization’s activity-based planning process and can be used in evaluating its success in setting and pursuing strategic goals

Also known as Freight Forwarding Charges, Advanced Charges are the fees charged on freight for a shipment advanced or transferred from one carrier to another, or to the shipper. These fees are normally collected from the consignee or recipient of the shipment.

Federal laws intended to ensure free and fair competition by prohibiting monopolies and contracts or conspiracies in restraint of trade in interstate and foreign commerce

To make a public announcement of the intention to purchase goods, services or construction with the intention of increasing the response and enlarging the competition. The announcement must conform to the legal requirements imposed by established laws, rules, policies and procedures to inform the public.

When two or parties are in consensus. In contracting terms an agreement usually refers to a negotiated and typically legally binding oral or written arrangement between parties. Many use agreement in the same meaning as contract. See also contract.

An application service provider (ASP) is a business that provides computer-based services to customers over a network. Software offered using an ASP model is also sometimes called on-demand software or software as a service (SaaS). The most limited sense of this business is that of providing access to a particular application program (such as customer relationship management) using a standard protocol such as HTTP.

A model in which goods and services are purchased from pre-qualified suppliers that meet certain performance or other selection criteria. Frequently an organization has a limited number of pre-approved suppliers for various categories from which buyers or business units.

A list of the suppliers approved for doing business. The AVL is usually created by procurement or sourcing and engineering personnel using a variety of criteria such as technology, functional fit of the product, financial stability, and past performance of the supplier. Also sometimes referred to as Approved Vendor List or Approved Provider List but more often referred to as Approved Suppliers.

Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides. Other forms of ADR include mediation (a form of settlement negotiation facilitated by a neutral third party) and non-binding resolution by experts. It is more helpful, however, simply to classify arbitration as a form of binding dispute resolution, equivalent to litigation in the courts, and entirely distinct from the other forms of dispute resolution, such as negotiation, mediation, or determinations by experts, which are usually non-binding. Arbitration is most commonly used for the resolution of commercial disputes, particularly in the context of international commercial transactions. It may be binding or non-binding.