Supply Chain and Operations Management Glossary (Q)

QFD (Quality Function Deployment): A table oriented procedure for converting customer requirements for a product into the features or functions that should be included in the product design.

Quantity discount: Pricing policy by which the cost per unit purchased decreases with the quantity purchased. Two main types of discount are: a) “all units”, in which case the lower price applies to all units purchased if the quantity purchased exceeds the threshold, and: b) “incremental units”, in which case the lower price applies only to units purchased in excess of the threshold. Another variation that is useful if a variety of products are being purchased from a single vendor is to base the discount upon the $ amount purchased, rather than the number of units. See also bundle pricing.

Q,r: An inventory policy under which, when the inventory level drops to r, an amount Q is ordered from the supplier. It is an extension of the EOQ inventory policy.

Quote: A promise by a supplier to a prospective customer of a price at which it will supply a specified good or service. The promise usually has a quantity, an expiration date, and a location at which the product will be made available. See also: RFQ.

About the Author: AJ Amjad Khanmohamed

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