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. AI-3