Price analysis is the process of examining and evaluating a proposed price against reasonable price benchmarks, without evaluating its separate cost elements and profit that make up the price. Some form of price analysis is required for every purchase; the dollar amount and characteristics of the purchase determine the method and scope of analysis. Cost analysis is the process of examining the separate elements of cost and profit in a potential supplier’s cost or pricing data. Additional information on the should-cost analysis can be found in Section 2-7, Conduct Should-Cost Analysis. The pricing analyst is responsible for determining the most appropriate technique for a given purchase.
One or more of the following techniques may be used when conducting a price analysis:
