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Supply Chain Managment

1. How would you use cost or price analysis as well as total cost of ownership in the evaluation of this supplier's proposal or bid?

2. Discuss your approach to effecting a win-win negotiation with a potential long-term supplier for a specific product or service.

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1. How would you use cost or price analysis as well as total cost of ownership in the evaluation of this supplier's proposal or bid?

Cost and price analysis are used to project cost via two separate methods. Cost analysis contains the vendor's cost of producing an item to evaluate the fairness of a quoted price. Price analysis examines the unit price provided by the vendor. The results of an evaluation of cost and price analysis may yield similar or different results. Cost analysis has five core components: (1.) Number of personnel, (2.) Total number of personnel hours, (3.) Indirect costs determinations such as warehouse, transportation, taxes and fees), (4.) Cost of resources (raw materials and machine time) and (5.) Evaluate necessary and reasonable costs. Price analysis has four components: (1.) Analyze price history of the item, (2.) Comparison of the item price versus the internal projections, (3.) Analyze bids submitted by multiple vendors, (4.) Obtain current prices of the item from catalogs and government sources.

Create a spreadsheet to evaluate the cost and price analysis at the same time. The key component to successfully utilize cost and price analysis is the decision must be based on ...

Solution Summary

The expert determines how to use cost or price analysis as well as total cost of ownership in the evaluation of this supplier`s proposal bid.

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