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LIQUIDATION. A liquidation is a settlement
of the amount of an account.
LOW LIMIT. Low limit is the stock position
that signals the need to initiate replenishment
action. It includes the sum of stocks represented
by the safety level and the order and shipping
time. (Equivalent to reorder point.)
MARKDOWN. A markdown is a voluntary
reduction in the selling price of an item. There
are three types of markdowns: markdowns below
cost, markdowns to zero, and retail markdowns.
MARKDOWN BELOW COST. A markdown
below cost is a voluntary reduction in the selling
price of an item below its original cost value.
MARKDOWN TO COST. A markdown to
cost is a type of retail markdown in which the sell-
ing price of an item is reduced so that it is equal
to its cost price.
MARKDOWN TO ZERO. A markdown to
zero is an expenditure of stock through a price
change that reduces the value of the item to
zero.
MARKON. A markon is any voluntary in-
crease in the selling price of an item.
MARKUP. A markup is the difference be-
tween the cost price and selling price of a retail
item.
OPERATING LEVEL. An operating level is
the quantity of material (exclusive of safety level)
required to sustain operations during the interval
between successive requisitions. Normally, it is the
difference in the quantity between the requisi-
tioning objective (high limit) and the reorder point
(low limit).
ORDER AND SHIPPING TIME. Order and
shipping time is the time elapsing between the sub-
mittal of a requisition and the receipt of the
material. (Equivalent to procurement lead time. )
OVERRING. An overring is when an incor-
rect higher price for an item is rung up on a cash
register.
PROFIT. A profit is the amount of money re-
maining after all expenses and costs have been
paid.
PURCHASE ORDER. A purchase order is an
order for material which also establishes a one-
time contract. An item ordered from the Ship’s
Store Afloat Catalog is procured via a purchase
order.
PURCHASE VARIANCE. A purchase
variance is a difference between standard price
and purchase price occurring when a ship’s store
is receiving Navy clothing from a commercial
supplier. A purchase variance is an involuntary
price change.
RECEIPT. A receipt is the acceptance of the
quantity and quality of material for accountability
purposes.
RECORDSKEEPER. A recordskeeper is a
person in charge of keeping ship’s store records.
REFUND. A refund is cash given back to a
customer in exchange for merchandise that was
previously brought from a sales activity.
REORDER POINT. A reorder point is the
stock position that signals the need to initiate
replenishment action. It includes the sum of stocks
represented by the safety level and the order and
shipping time. (Equivalent to low limit.)
REQUISITION. A requisition is an order for
material from a government source (for example,
other supply officers including another ship’s
store or shore supply support activity).
REQUISITIONING OBJECTIVE. A requisi-
tioning objective is the maximum quantity of
material to be maintained on hand and on order
to sustain current operations. It includes the sum
of stocks represented by operating level, safety
level, and order and shipping time. (Equivalent
to high limit.)
RESALE ACTIVITY. A resale activity is a
sales outlet.
RESPONSIBILITY. Responsibility is the
obligation to exercise care, custody, and protec-
tion of ship’s store money and materials.
RETAIL ITEM. A retail item is any item sold
in its original form in exchange for cash.
RETAIL MARKDOWN. A retail markdown
is a voluntary price reduction in the retail price
of an item to a price above or equal to its original
cost price.
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