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FACTOR. (1) A specialized financial institution engaged in selling their accounts receivable and lending on the security of inventory. (2) A type of commission house which often advances funds to the consignor, identified chiefly with the raw cotton and naval stores trades. Comment. The type of factor described in (1) above operates extensively in the textile field but is expanding into other fields.
FACTORING. A specialized financial function whereby producers, wholesalers, and retailers sell their accounts receivable to financial institutions, including factors and banks, often on a non-recourse basis. Comment. Commercial banks as well as factors and finance companies engage in this activity.
FAIR TRADE. Retail resale price maintenance imposed by suppliers of branded goods under authorization of state and federal laws. Comment. This is a special usage of the term promulgated by the advocates of resale price maintenance and bears no relation to the fair practices concept of the Federal Trade Commission; nor is it the antithesis of unfair trading outlawed by the antitrust laws.
FIFO, FIRST-IN, FIRST-OUT. An inventory valuation method, in which costs of material are transferred in chronological order of receipt.
FIXED COSTS. Costs which do not vary with changes in output; e.g., rent, depreciation, insurance, etc.
FIXED ORDER INTERVAL SYSTEMS. is a an approach to ordering products occurs at predetermined intervals.
F.O.B. ORIGIN. A term stating that the price of goods quoted does not include shipping charges, which are the buyer’s respon-sibility and which normally gives the buyer the right to specify the shipper.
FRANCHISE. An arrangement by which individuals can sell the products of a manufacturer under terms specified by the manufacturer.
FREIGHT FORWARDER. An intermediary who consolidates the shipments of several companies to effect cost saving with carload lots.
FREQUENCY DISTRIBUTION. A specification of the way in which frequencies of members of a population are distributed according to the values of the varieties which they exhibit.
FULL-FUNCTION WHOLESALER. An intermediary who provides services such as storage, delivery, credit, return privileges, and marketing intelligence for his or her retail customers.
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