Price Analysis
Determining the Best Price Analysis Method
Sandra Greene
BUS 315
Dr. Lena Maslennikova
27 Oct, 2012
Determining the Best Price Analysis Method Every adult that has purchased items, whether big or small have conducted price analysis. Price analysis is simply price comparison. When people go to the store to purchase something and compare the price of different brands of the same item, they are conducting price comparison. In doing the price comparison people are not concerned with the costs that went into making the product or how much of a profit the company made off of the product. The government also conducts price analysis. They “examine and evaluate a proposed price without evaluating its separate costs elements and proposed profit” (Murphy, 2009, p. 29). There are several different methods that can be used for price evaluation or price comparison. However, the one that is best in a variety of situations is Comparison of proposed prices received in response to a solicitation or more simply put, Comparison of competitive bids.
Of the different pricing methods reviewed, prices set by law or regulation are the only ones that comparison of competitive bids cannot be used for because those prices are already set. However, comparison of competitive bids can be used in place of all of the other methods.
For instance, comparison of prior quotes is used when time is of the essence. It is used when it would be faster to compare previous quotes (within 24 months) then to take the time to go through the competitve bidding process. Still this is a case where comparison of competitive bids could be used. Those concerned would just have to speed up the process.
Comparison of published price lists, market data, and government estimates are other methods that can be used because they help to determine market price for products, as long as they are not being substantially discounted
Sandra Greene
BUS 315
Dr. Lena Maslennikova
27 Oct, 2012
Determining the Best Price Analysis Method Every adult that has purchased items, whether big or small have conducted price analysis. Price analysis is simply price comparison. When people go to the store to purchase something and compare the price of different brands of the same item, they are conducting price comparison. In doing the price comparison people are not concerned with the costs that went into making the product or how much of a profit the company made off of the product. The government also conducts price analysis. They “examine and evaluate a proposed price without evaluating its separate costs elements and proposed profit” (Murphy, 2009, p. 29). There are several different methods that can be used for price evaluation or price comparison. However, the one that is best in a variety of situations is Comparison of proposed prices received in response to a solicitation or more simply put, Comparison of competitive bids.
Of the different pricing methods reviewed, prices set by law or regulation are the only ones that comparison of competitive bids cannot be used for because those prices are already set. However, comparison of competitive bids can be used in place of all of the other methods.
For instance, comparison of prior quotes is used when time is of the essence. It is used when it would be faster to compare previous quotes (within 24 months) then to take the time to go through the competitve bidding process. Still this is a case where comparison of competitive bids could be used. Those concerned would just have to speed up the process.
Comparison of published price lists, market data, and government estimates are other methods that can be used because they help to determine market price for products, as long as they are not being substantially discounted
References: Competitive Bidding. (2012). Retrieved from Business Dictionary: http://www.businessdictionary.com/definition/competitive-bidding.html Murphy, J. E. (2009). Guide to Contract Pricing. Virginia: Management Concepts, Inc. Procurement. (2011, March 7). Retrieved from Woods Hole Oceanographic Institute: http://www.whoi.edu/procurement/page.do?pid=14500 .