Question

The fundamental basis for requiring a detailed Supplier Cost Analysis as opposed to simply a Price Analysis is when:

a.You are procuring a Leverage spend item

b.You have many price quotes to compare

c.Buyer profit margins are low

d.There is limited competition for a high-dollar spends category.

Answer 1

A detailed Supplier Cost Analysis is required when there is limited competition for a high-dollar spends category.

Step-by-step explanation:

The fundamental basis for requiring a detailed Supplier Cost Analysis as opposed to simply a Price Analysis is when there is limited competition for a high-dollar spends category. In such a scenario, a detailed Supplier Cost Analysis helps in understanding the cost structure of suppliers and identifying any potential cost savings or negotiation opportunities. This analysis goes beyond just comparing prices and takes into account factors such as supplier production capabilities, economies of scale, and cost drivers.