LONDON--(BUSINESS WIRE)--Organizations have started adopting cost modeling in their day to day activities to make strategic decisions based on accurate insights. Cost modeling tools take into consideration material costs, labor costs, facility and maintenance costs, production costs and profit margin, and deliver precise and high-quality decisions.
Procurement market intelligence firm SpendEdge recently examined the advantages and challenges of cost modeling in its blog titled, ‘Cost Modeling Enables Strategic Decision Making in The Organization’.
According to SpendEdge, “By adopting cost modeling in operations, a company can achieve cost optimization and production efficiency. The process helps in new product development, benchmarking operations to achieve efficiency, identifying the manufacturing costs incurred by the suppliers and devising a product pricing strategy.”
For more insights, get in touch with SpendEdge procurement market intelligence experts
During the new product development stage, cost modelling helps production managers to understand the impact of various costs on the final product. It also helps procurement managers to determine the true cost of manufacturing a component or part, compare it with the supplier’s quoted price and further negotiate with them to get the best possible price. It also helps in budget planning, allocation and planning for future as well.
The concept of cost modeling is beneficial for both small and medium sized manufacturing businesses. It also helps organizations to devise cost reduction strategies, analyze whether a component is overpriced. This helps to negotiate with the supplier, to achieve the best price from the market.
Recent SpendEdge Cost Modeling Research Studies
Cost Modeling for the Tank Manufacturing Industry
Procurement Solutions for the Mobility Service Industry
Cost Modeling for IT Temporary Staffing Services
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.