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What is Purchase Price Variance (PPV) and How to Calculate it?

SCMDOJO

A favorable variance indicates that the company is spending less than planned, whereas a positive outcome means the company is spending more than the planned budget. Why is Purchase Price Variance (PPV) Important? Every business aims to increase its profit margin, and one effective way to achieve this is by cutting costs.

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Strategic Procurement — Everything You Should Know

Procurement Tactics

It aims to ensure that the goods and services that the business needs are delivered on time and purchased within the budget. Additionally, it involves a careful analysis of supplier selection, payment terms, contract negotiation, and acquisition of goods. It can also help you with contract management and compliance processes.

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How to be a better procurement manager in 2022: The latest updates on procurement digitization

Zycus Cognitive Procurement

Over the past two years, we’ve seen how supply chains are constantly changing and facing uncertainties. The latest updates can help you keep up with your industry competition, reduce costs and optimize your supply chain network to improve performance and mitigate risks. .

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Maximizing Cost Savings Through Strategic Supplier Collaboration

Jaggaer

Maximizing Cost Savings Through Strategic Supplier Collaboration With the growing emphasis on long-term value creation, Chief Procurement Officers are increasingly turning to supplier collaboration as a cornerstone of cost reduction. While this approach may result in short-term savings, it can be counterproductive in the long run.

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Procurement 101: Your Essential Guide to Strategic Sourcing

World of Procurement blog

It involves identifying needs, sourcing potential vendors, obtaining quotes and proposals, negotiating contracts, selecting suppliers, managing relationships, and meeting obligations. In summary, procurement is a strategic function focused on maximizing value, reducing costs, and building competitive advantage.

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Cost Avoidance: The Invisible Procurement Performance Metric

Procurement Software

Acknowledging cost avoidance: Why measuring procurement performance on hard savings alone is futile. Many companies only acknowledge savings based on Purchase Price Variance , or PPV. This is usually measured against budget standard costs, which are based on last price paid or moving average price.

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Cost Avoidance: The Invisible Procurement Performance Metric

Procurement Software

Acknowledging cost avoidance: Why measuring procurement performance on hard savings alone is futile. Many companies only acknowledge savings based on Purchase Price Variance , or PPV. This is usually measured against budget standard costs, which are based on last price paid or moving average price.