When preparing for negotiations, the more information a procurement professional has about a supplier, the better chance of a successful outcome. Should-cost models are useful tools for determining a product’s estimated price by itemizing processing costs, market input costs, and related assumptions. In this podcast, Claude Fidelin, Bryce Heller, and John Moyer describe the characteristics of should-cost models, when to use them, and how to create one. By spending time computing a should-cost model, procurement professionals can gain insight into a supplier’s estimated profit margins.
should-cost models, modeling, procurement tools, negotiating tools, cost models