| Average Aggregate | The total value of all items held in inventory for the |
| Inventory Value | firm valued at cost. |
| Bullwhip Effect | The variability in demand is magnified as we move from the customer to the producer in the supply chain. |
| Cost of Goods Sold | The annual cost for a company to produce the goods or services provided to customers. |
| Functional Products | Staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations. |
| Innovative Products | Products like fashionable clothes and personal computers that typically have a life cycle of just a few months. |
| Inventory Turnover and Weeks of Supply | Measures of supply chain efficiency that are mathematically the inverse of one another. |
| Logistics | Management functions that support the complete cycle of material flow: from the purchase and internal control of production materials; to the planning and control of work-in-process; to the purchasing, shipping, and distribution of the finished product. |
| Mass Customization | The ability of a company to delivery highly customized products and services to different customers around the world. |
| Outsourcing | Moving some of a firm’s internal activities and decision responsibility to outside providers. |
| Process Postponement | Delay of the process step that differentiates a product to as late in the supply chain as possible. |
| Strategic Sourcing | The development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of a business. |
| Weeks of Supply | A measures of how many weeks' worth of inventory is in the system at a particular point in time. |
