Business Glossary

1. system for replenishing merchandise based on actual consumer demand. Prior methods of inventory replenishment were order driven, relying on retailers and wholesalers to predict demand. ECR is demand driven, initiating the manufacture and shipment of goods based on consumer purchase activity. ECR reduces the cycle time from purchase to replenishment, reduces the cost of warehousing excess inventory, and assists retailers, wholesalers, and manufacturers in determining the optimum product mix. ECR predicts the impact of a product promotion on retail demand and production requirements. ECR is dependent upon the efficient and timely sharing of data along the supply chain beginning with sales information collected at a point-of-sale terminal. Given thin margins on average transactions and significant expenditures on warehouse space, some food and drug retailers resist manufacturers' ECR initiatives.
2. electronic cash register that transmits sales and customer data to and from a computer. Electronic cash registers are used by retailers to capture and accumulate price and sales data by SKU (stock-keeping unit), department, or store. ECRs can also be used to capture customer name and address data.

transmission of business transactions from one company's computer to another company's computer. Transmission is achieved through an electronic communication network that uses translation software to convert transactions from a company's internal format to a standard EDI format. Companies that participate in EDI are referred to as trading partners. Trading partners may be involved in on-line banking, on-line retailing, and electronic funds transfer. There are paperless transactions in an electronic format. In the case of EDI, the auditor should be cognizant of the possible impact on the gathering of evidential matter.