Financial Terms
Locator file

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Definition of Locator file

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Locator file

A file identifying where inventory items are situated, by bin location.

Related Terms:

Random-location storage

The technique of storing incoming inventory in any
available location, which is then tracked in a locator file.

NPV profile

A graph of NPV as a function of the discount rate.

Item master file

A file containing all item-specific information about a component,
such as its weight, cubic volume, and unit of measure.

NPV (net present value of cash flows)

Same as PV, but usually includes a subtraction for an initial cash outlay.

Asset allocation decision

The decision regarding how an institution's funds should be distributed among the
major classes of assets in which it may invest.

Capital allocation

decision Allocation of invested funds between risk-free assets versus the risky portfolio.

Continuous random variable

A random value that can take any fractional value within specified ranges, as
contrasted with a discrete variable.

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Discrete random variable

A random variable that can take only a certain specified set of discrete possible
values - for example, the positive integers 1, 2, 3, . . .

Dynamic asset allocation

An asset allocation strategy in which the asset mix is mechanistically shifted in
response to -changing market conditions, as in a portfolio insurance strategy, for example.

Net present value (NPV)

The present value of the expected future cash flows minus the cost.

Normal random variable

A random variable that has a normal probability distribution.


See: Net present value.

Policy asset allocation

A long-term asset allocation method, in which the investor seeks to assess an
appropriate long-term "normal" asset mix that represents an ideal blend of controlled risk and enhanced

Present value of growth opportunities (NPV)

Net present value of investments the firm is expected to make
in the future.

Random variable

A function that assigns a real number to each and every possible outcome of a random experiment.

Random walk

Theory that stock price changes from day to day are at random; the changes are independent
of each other and have the same probability distribution. Many believers of the random walk theory believe
that it is impossible to outperform the market consistently without taking additional risk.

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Randomized strategy

A strategy of introducing into the decision-making process a random element that is
designed to reduce the information content of the decision-maker's observed choices.

Tactical Asset Allocation (TAA)

An asset allocation strategy that allows active departures from the normal
asset mix based upon rigorous objective measures of value. Often called active management. It involves
forecasting asset returns, volatilities and correlations. The forecasted variables may be functions of
fundamental variables, economic variables or even technical variables.

Allocation base A measure of activity or volume such as labour

hours, machine hours or volume of production
used to apportion overheads to products and

Net present value (NPV)

A discounted cash flow technique used for investment appraisal that calculates the present value of future cash flows and deducts the initial capital investment.

Overhead allocation

The process of spreading production overhead equitably over the volume of production of goods or services.

net present value (NPV)

Equals the present value (PV) of a capital investment
minus the initial amount of capital that is invested, or the entry cost
of the investment. A positive npv signals an attractive capital investment
opportunity; a negative npv means that the investment is substandard.

Net Present Value (NPV)

The present value of all future cash inflows minus the present value
of all cash outflows


the systematic assignment of an amount to a recipient
set of categories annuity a series of equal cash flows (either positive or negative) per period

approximated net realizable value at split-off allocation

a method of allocating joint cost to joint products using a
simulated net realizable value at the split-off point; approximated
value is computed as final sales price minus
incremental separate costs

cost allocation

the assignment, using some reasonable basis,
of any indirect cost to one or more cost objects

net present value (NPV)

the difference between the present values of all cash inflows and outflows for an investment project

net realizable value at split-off allocation

a method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary
to prepare and dispose of the products; it requires
that all joint products be salable at the split-off point

physical measurement allocation

a method of allocating a joint cost to products that uses a common physical characteristic as the proration base

sales value at split-off allocation

a method of assigning joint cost to joint products that uses the relative sales values of the products at the split-off point as the proration basis; use of this method requires that all joint products
are salable at the split-off point


The process of storing costs in one account and shifting them to other
accounts, based on some relevant measure of activity.

net present value (NPV)

Present value of cash flows minus initial investment.


See net present value.

random walk theory

Security prices change randomly, with no predictable trends or patterns.

Automated storage/retrieval system

A racking system using automated systems
to load and unload the racks.

Fixed-location storage

An inventory storage technique under which permanent
locations are assigned to at least some inventory items.

Point-of-use storage

The storage of stock in a location in or near the shop floor
adjacent to its area of use.

Primary location

A storage location labeled as the primary location for a specific
inventory item.

Net Present Value (NPV) Method

A method of ranking investment proposals. npv is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment.







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