Sourcing and Procurement 
Glossary

Market knowledge

A detailed understanding of the influences, activities and trends in the market for a particular product or service (also known as category knowledge)

Market saturation

This usually means that there is more than enough supplier capacity to meet customer demand

Master Agreement (MA)

A legally binding contract entered into by two or more parties. The agreement goes into great detail regarding all its components. Because the parties intend to enter into future agreements with one another, they document terms that will govern future agreements in one place, the MA. The same terms need not be negotiated again. Thus, the parties are freed up to negotiate deal-specific terms.

Master production schedule (MPS)

A plan that a company has produced for the purposes of scheduling machinery, staffing, resourcing, etc., that is used to ensure smooth, continuous productions

Material Variance/Material Deviation

A variance or deviation in a response from specifications of conditions that allows a responder a substantial advantage or benefit not enjoyed by all other responders or that gives the organization something significantly different from what the organization requested in the solicitation document.

Material requirements planning (MRP)

An electronic system used to plan production which includes scheduling orders, monitoring inventory and managing the production process

Market price

The amount that customers are charged, depending on supply and demand for the products or services

Market segment

A group of consumers with common characteristics that are grouped together for the purpose of marketing a product or service

Master Services Agreement (MSA)

The MSA is the main contract along with the schedules. It contains overarching, constitutional or guiding language with ore specific, complete language located in the Schedules. A MSA sets the tone of the relationship as it may be used for multiple engagements between parties, establishes risk allocation between parties, and addresses relationship aspects that will be applicable across multiple engagements and geographies, etc.

Material Acquisition Costs

One of the elements comprising a company's total supply-chain management costs. These costs consist of the following -
%u2022 Materials (Commodity) Management and Planning - All costs associated with supplier sourcing, contract negotiation and qualification, and the preparation, placement, and tracking of a purchase order, including all costs related to buyer/planners.
%u2022 Supplier Quality Engineering - The costs associated with the determination, development/certification, and monitoring of suppliers' capabilities to fully satisfy the applicable quality and regulatory requirements.
%u2022 Inbound Freight and Duties - Freight costs associated with the movement of material from a vendor to the buyer and the associated administrative tasks. Duties are those fees and taxes levied by government for moving purchased material across international borders. Customs broker fees should also be considered in this category.
%u2022 Receiving and Put Away - All costs associated with taking possession of material and storing it. Note that carrying costs are not a part of acquisition, and inspection is handled separately.
%u2022 Incoming Inspection - All costs associated with the inspection and testing of received materials to verify compliance with specifications.
%u2022 Material Process and Component Engineering - Those tasks required to document and communicate component specifications, as well as reviews to improve the manufacturability of the purchased item.
%u2022 Tooling - Those costs associated with the design, development, and depreciation of the tooling required to produce a purchased item. A tooling cost would be incurred by a company if they actually paid for equipment and/or maintenance for a contract manufacturer that makes their product. Sometimes, there isn't enough incentive for a contract manufacturer to upgrade plant equipment to a level of quality that a company requires, so the company will pay for the upgrades and maintenance to ensure high quality. May not be common in some industries such as the Chemicals.

Material assets

Tangible items that are required to carry out an organisation’s activities, such as tools, machinery, staff and buildings

Materials Management

The management function of an organization that may include all or a portion of the responsibility for purchasing, inventory control, traffic, shipping, receiving, and warehousing.