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Parts requisition

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Definition of Parts requisition

Parts Requisition Image 1

Parts requisition

An authorization to move a specific quantity of an item from
stock.



Related Terms:

material requisition form

a source document that indicates
the types and quantities of material to be placed into production
or used in performing a service; it causes materials
and its cost to be released from the Raw Material Inventory
warehouse and sent to Work in Process Inventory


Materials requisition

A document listing the quantities of specific parts to be withdrawn
from inventory.


Remanufactured parts

parts that have been reconstructed to render them capable
of fulfilling their original function.


Replacement parts

parts requiring some modification before being substituted
for another part.


Advance material request

Very early orders for materials before the completion
of a product design, given the long lead times required to supply some items.



Asymmetric information

Information that is known to some people but not to other people.


BARRA's performance analysis (PERFAN)

A method developed by BARRA, a consulting firm in
Berkeley, Calif. It is commonly used by institutional investors applying performance attribution analysis to
evaluate their money managers' performances.


Parts Requisition Image 1

Bill of materials

A listing of all the materials and quantities that go to make up a completed product.


bill of materials

a document that contains information about
the product materials components and their specifications
(including quality and quantities needed)


Bill of materials

An itemization of the parts and subassemblies required to create a
product, frequently including assumed scrap rates that will arise as part of the production
process.


Bill of materials (BOM)

A listing of all parts and subassemblies required to produce one
unit of a finished product, including the required number of units of each part
and subassembly.


Breeder bill of materials

A bill of material that accounts for the generation and
cost implications of byproducts as a result of manufacturing the parent item.


Committee, AIMR Performance Presentation Standards Implementation Committee

The Association for Investment Management and Research (AIMR)'s Performance Presentation Standards Implementation
Committee is charged with the responsibility to interpret, revise and update the AIMR Performance
Presentation Standards (AIMR-PPS(TM)) for portfolio performance presentations.


direct material

a readily identifiable part of a product; the cost of such a part


Direct materials cost

The cost of all materials used in a cost object, such as finished goods.


Direct materials mix variance

The variance between the budgeted and actual mixes of
direct materials costs, both using the actual total quantity used. This variance isolates
the unit cost of each item, excluding all other variables.


Parts Requisition Image 2

Direct-Method Format

A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.


Earmarked material

Inventory that has been physically marked as being for a
specific purpose.



Expected value of perfect information

The expected value if the future uncertain outcomes could be known
minus the expected value with no additional information.


Flat benefit formula

Method used to determine a participant's benefits in a defined benefit plan by
multiplying months of service by a flat monthly benefit.


Form 1099

A form used by businesses to report to the government payments
made to certain types of suppliers.


Form 4070

A form used by employees to report to an employer the amount of
their tip income.


Form 668-W

The standard form used for notifying a company to garnish an employee’s
wages for unpaid taxes.


Form 8027

The form used by employers to report tip income by their employees
to the government.


Form 940

A form used to report federal unemployment tax remittances and liabilities.


Form 940-EZ

A shortened version of the form 940.
form 941
A form used to identify to the government the amount of all quarterly
wages on which taxes were withheld, the amount of taxes withheld, and any adjustments
to withheld taxes from previous reporting periods.


Form I-9

The Employment Eligibility Verification form, which must be filled
out for all new employees to establish their identity and eligibility to work.


Parts Requisition Image 3

Formalized Line of Credit

A contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year.



Formula basis

A method of selling a new issue of common stock in which the SEC declares the registration
statement effective on the basis of a price formula rather than on a specific range.


Future-Oriented Financial Information

Information about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection.


Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA)

A federal Act shielding employers from liability if they have made
a good-faith effort to verify a new employee’s identity and employment eligibility.


Immigration Reform and Control Act of 1986

A federal Act requiring all employers having at least four employees to verify the identity and employment
eligibility of all regular, temporary, casual, and student employees.


Indented bill of material

A bill of material reporting format under which successively
lower levels of components are indented farther away from the left
margin.


Indirect-Method Format

A format for the operating section of the cash-flow statement that
presents the derivation of cash flow provided by operating activities. The format starts with net
income and adjusts for all nonoperating items and all noncash expenses and changes in working capital accounts.


information

bits of knowledge or fact that have been carefully
chosen from a body of data and arranged in a meaningful way


Information asymmetry

A situation involving information that is known to some, but not all, participants.


Information Coefficient (IC)

The correlation between predicted and actual stock returns, sometimes used to
measure the value of a financial analyst. An IC of 1.0 indicates a perfect linear relationship between predicted
and actual returns, while an IC of 0.0 indicates no linear relationship.


Information-content effect

The rise in the stock price following the dividend signal.


information content of dividends

Dividend increases send good news about cash flow and earnings. Dividend cuts send bad news.


Information costs

Transaction costs that include the assessment of the investment merits of a financial asset.
Related: search costs.


Information-motivated trades

Trades in which an investor believes he or she possesses pertinent
information not currently reflected in the stock's price.


Information services

Organizations that furnish investment and other types of information, such as
information that helps a firm monitor its cash position.


Informational efficiency

The speed and accuracy with which prices reflect new information.


Informationless trades

Trades that are the result of either a reallocation of wealth or an implementation of an
investment strategy that only utilizes existing information.


Insider information

Relevant information about a company that has not yet been made public. It is illegal for
holders of this information to make trades based on it, however received.


management information system (MIS)

a structure of interrelated elements that collects, organizes, and communicates
data to managers so they may plan, control, evaluate
performance, and make decisions; the emphasis of the
MIS is on internal demands for information rather than external
demands; some or all of the MIS may be computerized
for ease of access to information, reliability of input
and processing, and ability to simulate outcomes of
alternative situations


material mix variance

(actual mix X actual quantity X standard price) - (standard mix X actual quantity X standardprice);
it computes the monetary effect of substituting a nonstandard mix of material


material price variance

total actual cost of material purchased
minus (actual quantity of material  standard
price); it is the amount of money spent below (favorable)
or in excess (unfavorable) of the standard price for the
quantity of materials purchased; it can be calculated based
on the actual quantity of material purchased or the actual
quantity used


material quantity variance

(actual quantity X standard price) - (standard quantity allowed  standard price);
the standard cost saved (favorable) or expended (unfavorable)
due to the difference between the actual quantity
of material used and the standard quantity of material
allowed for the goods produced during the period


Material requirements planning

A computerized system used to calculate material
requirements for a manufacturing operation.


Material requirements planning (MRP)

A computer-driven production methodology
that manufactures products based on an initial demand forecast. It tends to result in
more inventory of all types than a just-in-time (JIT) production system.


Material review board

A company committee typically comprising members representing
multiple departments, which determines the disposition of inventory
items that will not be used in the normal manufacturing or distribution process.


material yield variance

(standard mix X actual quantity X standard price) - (standard mix X standard quantity X standard price);
it computes the difference between the
actual total quantity of input and the standard total quantity
allowed based on output and uses standard mix and
standard prices to determine variance


Materiality

The proportional size of a financial misstatement. It can be construed as
the net impact on reported profits, or the percentage or dollar change in a specific
line item.


Materiality

A characterization of the magnitude of a financial statement item's effect on a
company's overall financial condition and performance. An item is material when its size is
likely to influence decisions of investors or creditors.


Materials price variance

The difference between the actual and budgeted cost to
acquire materials, multiplied by the total number of units purchased.


Materials quantity variance

The difference between the actual and budgeted quantities
of material used in the production process, multiplied by the standard cost per
unit.


Materials requirement planning

Computer-based systems that plan backward from the production schedule
to make purchases in order to manage inventory levels.


materials requirements planning (MRP)

a computerbased information system that simulates the ordering and
scheduling of demand-dependent inventories; a simulation
of the parts fabrication and subassembly activities that are
required, in an appropriate time sequence, to meet a production
master schedule


Matrix bill of material

A bill of materials chart listing the bills for similar products,
which is useful for determining common components.


Medical Information Bureau

This organization was established in 1902. The Medical Information Bureau (M.I.B.) is a non-profit association of life insurance companies. Its purpose is to detect and deter fraud by providing warnings called, alerts, to member companies. For example, if an insurance applicant advised one insurance company of a heart attack and then applied to another insurance company omitting this history, codes, reported by the first insurance company, indicating a heart attack would alert the second insurance company to the undisclosed history. It is a rarity, however, that the alert is the only notice of a specific medical impairement as most applicants completely disclose their history.


Modular bill of material

A bill of material format in which components and subassemblies
are clustered by product option, so one can more easily plan for the
assembly of finished goods with different configurations.


Multilevel bill of material

An itemization of all bill of material components, including
a nested categorization of all components used for subassemblies.


Nonconforming material

Any inventory item that does not match its original design
specifications within approved tolerance levels.


Normal annuity form

The manner in which retirement benefits are paid out.


Offal material

The waste materials resulting from a production process.


organizational form

an entity’s legal nature (for example,
sole proprietorship, partnership, corporation)


Overperform

When a security is expected to appreciate at a rate faster than the overall market.


Performance attribution analysis

The decomposition of a money manager's performance results to explain
the reasons why those results were achieved. This analysis seeks to answer the following questions: (1) What
were the major sources of added value? (2) Was short-term factor timing statistically significant? (3) Was
market timing statistically significant? And (4), Was security selection statistically significant?


Performance evaluation

The evaluation of a manager's performance which involves, first, determining
whether the money manager added value by outperforming the established benchmark (performance
measurement) and, second, determining how the money manager achieved the calculated return (performance
attribution analysis).


performance evaluation

the process of determining the degree
of success in accomplishing a task; it equates to both
effectiveness and efficiency


performance management system

a system reflecting the entire package of decisions regarding performance measurement and evaluation


Performance measurement

The calculation of the return realized by a money manager over some time interval.


Performance shares

Shares of stock given to managers on the basis of performance as measured by earnings
per share and similar criteria. A control device used by shareholders to tie management to the self-interest of
shareholders.


Phantom bill of material

A bill of materials for a subassembly that is not normally
kept in stock, because it is used at once as part of a higher-level assembly or
finished product.


Pro forma capital structure analysis

A method of analyzing the impact of alternative capital structure
choices on a firm's credit statistics and reported financial results, especially to determine whether the firm will
be able to use projected tax shield benefits fully.


Pro-Forma Earnings

Reported net income with selected nonrecurring items of revenue or gain
and expense or loss deducted from or added back, respectively, to reported net income. Occasionally
selected nonoperating or noncash items are also treated as adjustment items.


Pro forma financial statements

Financial statements as adjusted to reflect a projected or planned transaction.


Pro forma (Proforma)

A set of financial statements that incorporates some assumptions, usually
regarding future events. For example, pro forma statements can be constructed that
extend a company’s financial statements through the end of its fiscal year, and
which contain assumptions regarding the final few months of the year, which have
not yet occurred.


Pro forma statement

A financial statement showing the forecast or projected operating results and balance
sheet, as in pro forma income statements, balance sheets, and statements of cash flows.


pro formas

Projected or forecasted financial statements.


Raw material

Base-level items used by the manufacturing process to create either
subassemblies or finished goods.


Raw material supply agreement

As used in connection with project financing, an agreement to furnish a
specified amount per period of a specified raw material.


Raw materials

Unprocessed goods bought for manufacture, part of inventory.


Raw materials inventory

The total cost of all component parts currently in stock that
have not yet been used in work-in-process or finished goods production.


Repair bill of material

A special bill itemizing changes needed to refurbish an
existing product.


Reprocessed material

material that has been reworked and returned to stock.


Reserved material

material that has been reserved for a specific purpose.


Semi-strong form efficiency

A form of pricing efficiency where the price of the security fully reflects all
public information (including, but not limited to, historical price and trading patterns). Compare weak form
efficiency and strong form efficiency.


semi-strong-form efficiency

Market prices reflect all publicly available information.


Single-level bill of material

A list of all components used in a parent item.


Strong-form efficiency

Pricing efficiency, where the price of a, security reflects all information, whether or
not it is publicly available. Related: Weak form efficiency, semi strong form efficiency


strong-form efficiency

Market prices rapidly reflect all information that could in principle be used to determine true value.


Summarized bill of materials

A bill of materials format showing the grand total
usage requirement for each component of a finished product.


Tax Reform Act of 1986

A 1986 law involving a major overhaul of the U.S. tax code.


Underperform

When a security is expected to appreciate at a slower rate than the overall market.


Uniform Interstate Family Support Act

A federal Act specifying which jurisdiction
shall issue family support-related garnishment orders.


Uniformed Services Employment and Reemployment Rights Act of 1994

A federal act that minimizes the impact on people serving in the Armed Forces
when they return to civilian employment by avoiding discrimination and increasing
their employment opportunities.


Unit benefit formula

Method used to determine a participant's benefits in a defined benefit plan by
multiplying years of service by the percentage of salary.


W-2 Form

A form used to report gross pay and tax deductions for each employee
to the IRS for a calendar year.
W-4 form
A form on which an employee declares the amount of federal tax deductions
to be deducted from his or her pay.


W-9 Form

A form issued to a company’s suppliers, requesting that they identify
their form of legal organization and tax identification number.


Weak form efficiency

A form of pricing efficiency where the price of the security reflects the past price and
trading history of the security. In such a market, security prices follow a random walk. Related: Semistrong
form efficiency, strong form efficiency.



 

 

 

 

 

 

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