Stock Keeping Unit (SKU)

(noun)

A unique identifier for each distinct product and service that can be purchased in business.

Related Terms

Examples of Stock Keeping Unit (SKU) in the following topics:

  • Materials Handling

    • These include capturing all relevant data related to the warehouse's operation (such as the stock keeping unit (SKU)), measuring how many times an item is "touched" from the time it is ordered until it leaves the building, making sure you are using the proper picking technology, and keeping system downtime to a minimum.

  • Inventory Management

    • In the U.S. and Canada, inventory has become the equivalent of the British term stock; that is, it refers to material that is available from and stocked by a business.
    • In the context of accounting, inventory or stock is considered an asset.
    • Inventory management tracks the shape and percentage of stocked goods.
    • Reasons for keeping an inventory include:
    • Economies of scale: To deliver one unit of product at a time, and in response to the specific need and location of a given user, would be costly and logistically difficult.

  • Types of Investments: Dependence on Ownership Share

    • A share is a single unit of ownership in a corporation, mutual fund, or any other organization.
    • A share is thus an indivisible unit of capital, expressing the proprietary relationship between the company and the shareholder.
    • The investor keeps such equities as an asset.
    • The ownership of more than 50% of voting stock creates a subsidiary.
    • In contrast, a non-operating subsidiary would exist on paper only (i.e. stocks, bonds, articles of incorporation) and would use the identity and rolling stock of the parent company.

  • FIFO Method

    • Under FIFO, it is assumed that 10 units purchased on 10/1/12 (the sale also eliminates this inventory layer) and 1 unit purchased on 10/5/12 were sold The ending inventory balance on the 12/31/12 balance sheet is 4 units at a cost of USD 6, or USD 24 and cost of goods sold on the income statement is USD 56 (10 units * USD 5 + 1 unit * USD 6)
    • FIFO and LIFO methods are accounting techniques used in managing inventory and financial matters involving the amount of money a company has tied up within inventory of produced goods, raw materials, parts, components, or feed stocks.
    • These methods are used to manage assumptions of cost flows related to inventory, stock repurchases (if purchased at different prices), and various other accounting purposes .
    • If the ending inventory contains more units than acquired in the most recent purchase, it also includes units from the next-to-the-latest purchase at the unit cost incurred, and so on.
    • Keep in mind the FIFO assumption: Costs of the first goods purchased are those charged to cost of goods sold when the company actually sells goods.

  • Inventory Management

    • For these companies, the reason for keeping one of each item on hand (in inventory) is that it enables them to make sales and capture revenue.
    • However, many businesses keep more than one of every item on hand and also keep raw materials and unfinished goods on stock in factories.
    • Economies of scale: Ideal condition of "one unit at a time, at a place where a user needs it, when he needs it" principle tends to incur lots of costs in terms of logistics.
    • All these stock reasons can apply to any owner or product.
    • Stock ties up cash and, if uncontrolled, it will be impossible to know the actual level of stocks, and therefore impossible to control them.

  • Trade Allowances

    • Trade allowances are price reductions given to middlemen, such as retailers, to encourage them to stock an organization's products.
    • A manufacture sells to a retailer at a certain price unit point and beyond that point you give them a discount because they are buying in bulk.
    • Trade discounts and allowances are price reductions given to middlemen (e.g. wholesalers, industrial distributors, retailers) to encourage them to stock and give preferential treatment to an organization's products.
    • Trade discounts are often combined to include a series of functions, for example 20/12/5 could indicate a 20% discount for warehousing the product, an additional 12% discount for shipping the product, and an additional 5% discount for keeping the shelves stocked with the product.

  • Corporate Fraud

    • Enron's managers invested Enron stock in the SPEs.As Enron's stock price soared, the SPE's finances remained healthy until Enron's stock price peaked at $90 per share.Once Enron's stock price began plummeting until it fell below one dollar per share in 2000, the SPEs earned substantial losses.Enron hid the losses and asked banks for more loans that would keep the company afloat, but Enron failed to obtain new loans.The U.S. economy entered a recession in 2001 after many internet companies bankrupted in 2000.A recession always exposes anorganization's weakness.Unfortunately, Enron employees' pension funds were invested in Enron stock, and many employees lost their pension funds and became unemployed.
    • The U.S. investment banks, for example, were partnerships before the 1990s, and the managers handled money carefully.They were both the principal and agent.Then the managers converted the investment banks to corporations during the 1990s, and the managers gambled and took high risks while the shareholders owned the corporations.Investment banks became involved in the mortgage market in the early 2000s and were caught in the mania of the U.S. housing bubble.When the bubble deflated, the shareholders lost their stock value during the 2008 Financial Crisis.Finally, for one perverse example, GM cancelled its stock, and the shareholders lost everything during 2008.Remember, the corporate managers represent the shareholders and run the corporation on their behalf.
    • A family who dominates a corporation could reduce the principal-agent problem.For example, the Walton family is the majority shareholders who actively manage the Wal-Mart Corporation.Microsoft was similar, when Bill Gates was both the CEO and majority shareholder.Consequently, they become both the agent and principal, and they have one united interest - to earn profits.Thus, these companies earned high returns, and managers have better vision and oversight over their corporations.

  • Glossary

    • American Stock Exchange: One of the key stock exchanges in the United States, it consists mainly of stocks and bonds of companies that are small to medium-sized, compared with the shares of large corporations traded on the New York Stock Exchange.
    • Dow Jones Industrial Average: A stock price index, based on 30 prominent stocks, that is a commonly used indicator of general trends in the prices of stocks and bonds in the United States.
    • New York Stock Exchange: The world's largest exchange for trading stocks and bonds.
    • Productivity: The ratio of output (goods and services) produced per unit of input (productive resources) over some period of time.
    • Stock exchange: An organized market for the buying and selling of stocks and bonds.

  • Dilutions of Solutions

    • This process keeps the amount of solute constant, but increases the total amount of solution, thereby decreasing its final concentration.
    • Diluting solutions is a necessary process in the laboratory, as stock solutions are often purchased and stored in very concentrated forms.
    • When calculating dilution factors, it is important that the units for both volume and concentration are the same for both sides of the equation.
    • Serial dilutions involve diluting a stock or standard solution multiple times in a row.

  • Purchasing Inventory

    • Inventory management is primarily about specifying the quantity and placement of stocked goods.
    • Inventory management is primarily about specifying the quantity and placement of stocked goods.
    • The scope of inventory management also involves stock replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, returns and defective goods, and demand forecasting .
    • Economies of scale: The idea of "one unit at a time, at a place where a user needs it, when they need it" tends to incur lots of costs in terms of logistics.