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Supply Chain & Logistics Glossary

Supply chain and logistics professionals speak their own language. Here’s your guide to cracking the code.

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What Is Days of Inventory?

Days of inventory is the average number of days it takes to sell or use the entire inventory. A lower value indicates better inventory turnover.

What Is Days of Supply?

Days of supply is the number of days a supply of goods will last based on current inventory levels and average daily usage or sales.

What Is a Deep-Lane System?

A deep-lane system is a system that stores pallets several positions deep within racks, maximizing storage density.

What Is Delivered Cost?

Delivered cost is the total cost of delivering goods, including transportation, handling, customs and other expenses.

What Is a Demand-Driven Supply Chain?

A demand-driven supply chain is an approach that aligns supply chain activities with actual customer demand, reducing excess inventory and improving responsiveness.

What Is Demurrage?

Demurrage refers to charges incurred when a shipper exceeds the allotted time for unloading or loading cargo at a port.

What Is Detention?

Detention refers to fees imposed when a carrier’s equipment (such as a truck or container) is held beyond the agreed-upon time for loading or unloading.

What Is Direct Store Delivery (DSD)?

Direct store delivery (DSD) is a distribution method where suppliers deliver goods directly to retail stores, bypassing distribution centers.

What Is a Distribution Center?

In warehousing, a distribution center receives, sorts, stores and redistributes goods to retail locations or end customers or sends raw materials to a manufacturing plant.

What Is Distribution Requirements Planning (DRP)?

Distribution requirements planning is a system that calculates inventory requirements based on demand forecasts and replenishment rules.