Savings on non-standard purchases
28 August 2012
Q: Buyers are forever pressed on cost savings. For standard items with a previous price and known usage, it is easy to work out savings. However, when products are not standardised, how can cost savings be reasonably calculated and defended?
A: Chris Luke, consultant with PMMS Consulting Group, writes: Savings are calculated from a baseline that is acceptable to the assesser, whether that is the buyer, the department or the organisation. Where an item is standard and bought regularly, the last purchase price is a normally accepted baseline, but should it be? If the item is...