Course description - Cost Analysis teaches Strategic Sourcing and Supply Management professionals how to use Purchase Price Cost Analysis (PPCA)

• PPCA is a key cost management tool
• It is used to understand supplier costs and compare the relationship of those costs to the selling price
• PPCA can shift the balance of power between sourcing and supplier

ISM-ADR School of Supply Management credit of Continuing Education Hours – 1.5 hours.
This course should take approximately 60 minutes to complete.

Intended audience - Supply Management professionals who could benefit from a structured approach to analyzing supplier cost structures and how to apply this knowledge for tactical and strategic advantage.

Learning objectives - After completing this module, you will be able to:

• Distinguish between price analysis and Cost Analysis
• Describe different types of supplier Cost Analysis
• Describe how to use PPCA to support both tactical and strategic uses of Cost Analysis

Course outline:

• Introduction to Supplier Cost Analysis
• Bottom-line impact of cost savings
• What is Cost Analysis?
• Tactical Cost Analysis versus Strategic Cost Analysis

• PPCA and Cost Analysis
• A closer look at cost
• Key elements of cost
• Key questions: cost elements
• Cost drivers
• Cost drivers for material, labor, overhead and profit
• Developing an understanding of cost
• Planning a PPCA data gathering campaign

• Completing a PPCA
• PPCA example – mobile phones
• PPCA example – building construction
• PPCA example – advertising and public relations

• 20 Question Quiz