From the course: Purchasing Foundations
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Price and cost analysis
- When shopping, either in a store or online, most of us try to spend our money wisely. As consumers, we all want to get the best deal we possibly can. Well, purchasing professionals are trying to accomplish the same thing at work. In fact, a friend at Intel Corporation once told me that he is expected to spend Intel's money as if it were his own. Buyers are expected to find value when they spend their company's money. A good definition of value is to compare what you get for your money and the price you paid for everything you received. Getting more for a lower price provides good value for your company. To a buyer, the price you pay is the focus of your cost management efforts. Price is what it cost you to make the purchase. You can increase value in three very straight-forward ways. First, by reducing what it costs you for the purchase. Assuming of course that the quality stays the same, you are buying the same item, you're just paying less. Or you can increase value by getting…
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