Price is the monetary sum exchanged for goods and services. Price levels are an outcome of competitive processes, such as the levels of supply and demand in the market. In procurement, most buyers are measured on the ‘hard dollar’ savings that they make, and so have a keen interest in optimising price. Most total cost models demonstrate that purchase price, while not the only component of total cost, is a key part of the total cost of most categories, and so procurement practitioners will focus on price as one procurement goal. The definition of ‘best value’ in most categories includes both quantitative and qualitative elements, such as quality, service and performance times, as well as price and other commercial terms. Like total cost, best value is a difficult concept to measure and validate accurately, as price is easier to measure and an important component of both value and total cost, price remains an important focus for most procurement processes. See also Competition. .

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Discover the world’s largest Glossary of Procurement terms

With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.