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Meaning / Definition of

Flexible Spending Account

Categories: Retirement and Pension, Personnel Management,

Some employers offer flexible spending accounts (FSA), sometimes called cafeteria plans, as part of their employee benefits package. You contribute a percentage of your pretax salary, up to the limit your plan allows, which you can use to pay for qualifying expenses. Qualifying expenses include medical costs that aren't covered by your health insurance, childcare, care for your elderly or disabled dependents, and life insurance.The amount you put into the plan is not reported to the IRS as income, which means your taxable income is reduced. However, you have to estimate correctly the amount you'll spend during the year when you arrange to have amounts deducted from your paycheck. Once you decide on the amount you are going to contribute to an FSA for a year, you cannot change it unless you have a qualifying event, such as marriage or divorce.If you don't spend all that you had withheld within the year - or in some plans within the year plus a two-and-one-half month extension - you forfeit any amount that's left in your account.In some plans you pay for the qualifying expenses and are reimbursed when you file a claim. In other plans, you use a debit card linked to your account to pay expenses directly from the account.

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Definition / Meaning of

Lead Time

Categories: Business and Management, Marketing, Operation and Production,

the time interval between the start of an activity or process and its completion, for example, the time between ordering goods and their receipt, or between starting manufacturing of a product and its completion in inventory control, the time between placing an order and its arrival on site. Lead time differs from delivery time in that it also includes the time required to place an order and the time it takes to inspect the goods and receive them into the appropriate store. Inventory levels can afford to be lower and orders smaller when purchasing lead times are short. in new product development and manufacturing, the time required to develop a product from concept to market delivery. Lead time increases as a result of the poor sequencing of dependent activities, the lack of availability of resources, poor quality in the component parts, and poor plant layout. The technique of concurrent engineering focuses on the entire concept-to-customer process with the goal of reducing lead time. Companies can gain a competitive advantage by achieving a lead time reduction and so getting products to market faster.

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