LONDON--(BUSINESS WIRE)--Cost modeling as a tool is increasingly being preferred by supply chain professionals because of the impactful benefits associated with it. This tool helps in analyzing costs and profit margins to determine the actual cost of manufacturing of a product or a service. The cost comprises of labor costs, material costs, production costs, and cost incurred for research and development.
Procurement market intelligence firm SpendEdge recently examined the advantages and challenges of cost modeling in its blog titled, ‘The Numero Uno Purchasing Best Practice – Cost Modeling’.
SpendEdge observes that, “By incorporating cost modeling, purchase managers can follow a balanced purchasing strategy and procure materials from suppliers at a much lesser price. Also, it helps in facilitating coordination between purchase manager and the supplier.”
Get in touch with SpendEdge for more cost modeling and related insights
In addition, SpendEdge notes that cost modeling has its benefits at every level of decision making:
- At the strategic level, cost modeling helps companies in taking decisions regarding whether to make or buy a product.
- At a tactical level, cost modeling helps purchase managers to decide between two suppliers supplying the same product.
- Management uses cost modeling to determine the set up costs and the optimal order levels at the executional level which helps organizations to eliminate waste, free up working capital and plan the budget.
SpendEdge has 13 years of experience in providing procurement intelligence services including cost modeling practices. Procurement analysts at SpendEdge completed over 1,500 projects for organizations of all sizes, including three recent cost modeling studies:
SpendEdge Cost Modeling Studies
Cost Modeling to Help Better Negotiation of IT Temporary Staffing
View study: https://www.spendedge.com/casestudy/cost-modeling-temporary-staffing-company
Cost Saving Opportunities for the Tank Manufacturing Industry
View Study: https://www.spendedge.com/casestudy/cost-model-molten-salt-tank-manufacturer
Cost Modeling for Mobility Service Providers
View Study: https://www.spendedge.com/casestudy/cost-modeling-mobility-service-provider
SpendEdge shares your passion for driving sourcing and procurement excellence. We are a preferred market intelligence partner for Fortune 500 firms and other leading companies across industries. Our strength lies in delivering actionable insights that help sourcing and procurement professionals get the right information in the right format, without any unnecessary frills. For more information on SpendEdge’s services, please contact us.