2-7.2 Sources for Analysis

Individuals involved in a should-cost analysis should include analysts from the purchase/SCM team, as well as representatives from Finance, Engineering, and other relevant technical specialists. They will draw from public sources that include:

These sources are combined with client or purchase/SCM team estimates and any supplier-provided information. purchase/SCM team estimates incorporate commodity expertise and previous experience. Supplier information can consist of cost breakdowns from previous proposals, bills of materials (BOMs), and any other insights into supplier depreciation, labor, materials, and overhead. The analysts use these combined sources to determine which cost elements are out of line in comparison with industry benchmarks, as well as the total price.