Price Analysis and Cost Analysis

Price & Cost Analysis Togap Siagian, MBA, CPSM

Togap Siagian, MBA, CPSM

CAREER Senior Manager of Strategic Procurement - PT Vale Indonesia (current), ConocoPhillips Indonesia,

Inc., PT Freeport Indonesia, PT Omron Manufacturing of Indonesia

EDUCATION MBA Rochester Institute of Technology, BS in Industrial Engineering Institut Teknologi Bandung

CERTIFICATION CPSM (Certified Professional Supply Management) from ISM (Institute for Supply Management)

AFFILIATIONS Institute for Supply Management USA, Indonesian Procurement Society (Co-Founder & Board of

Expert)

CONTACT Phone: +62 811 9 851 861, email: [email protected]

AGENDA Price Analysis is..

Price Analysis Techniques

Price Analysis vs Cost

Analysis

Cost Analysis Defined

Cost Analysis Philosophies

Cost Analysis Examples

Price Analysis is … the process of examining and evaluating a

proposed price without evaluating its separate cost elements and proposed profit

Price Analysis Techniques

Historical Price Comparison with previous prices for same or similar items

Parametric Uses relationships between technical and cost with known historical values

Price List

Compare offered price to catalog price of same or similar items

Comparison of proposed prices received in response to a RFQ or RFP

Competition

Market Research

Issue RFI, conduct FGD, attend trade associations review catalog Other Price from

the Bidder

Analysis of other pricing information from the bidder

Simpler

Price Analysis

Price Comparison

Adequate

Price Analysis vs Cost Analysis

Cost Analysis

Detailed Level of Analysis

Competition Inadequate

Method Cost

Breakdown

Cost Analysis Defined

Cost analysis is a thorough assessment

of the direct and indirect costs leading

to the final price of the goods or service

Reasonable for the goods or service

Allocated proportionally to each cost component

Allowed for the goods or service

Cost Analysis Philosophies

Common Cost Elements

Personnel

Work Hours

Resources

Indirect Costs

Other Costs

Hours work by the personnel

Financial cost, protection from loss

Number of personnel required

Raw components or machine time

Warehousing, transportation, taxes

Z Example 01 - Fuel Cost Analysis

Example 02 - Flight Cost Analysis

Discussion