NL
Purchase Price Variance

Description

Price variance is often hard to monitor. The variety of product items and deprecated catalogue data makes is almost impossible to keep track of price increases of suppliers, brands or product categories.

Benefits

Our price variance algorithm provides the following benefits to your company:

  • Identify price increases that can significantly harm your business
  • Be able to see opportunities by comparing market trends of relevant commodities with your recent purchases
  • Get insights on how market trends propagate through the prices of your purchases

Data

For this analysis we make use of invoice data only. Using our algorithms the attributes required to monitor price fluctuations are: vendor name, order date, productitem description, quantity, netto unit price.

Result

The analysis goes through multiple stages. First a cluster algorithm groups identical product items based on product name, supplier and unit price. In this way we can detect outliers and subitems within a product item. The resulting product item lines are weighted and averaged over suppliers, brands and/or product groups in order to get insights in the aggregated pricefluctuation trends. Finallymarket trends of relevant commodities are added for comparison. The resulting trend lines will be made available in:

  • Dashboard (.pbi)
  • Report (.pdf)
  • Datafile (.csv)

Example reports

Discover pricing trends among your suppliers, brands and/or product groups with spark lines in one view.

Demo Price Variance

Explanation demo Price Variance

In this price pattern recognition and price variation analysis you gain insight into the price fluctuations in product category, brand or supplier. This analysis enables you to determine, among other things, whether unwanted price increases have taken place, you can budget better, you can easily compare suppliers by brand and you are stronger in contract negotiations with your suppliers.

The algorithm detects whether there are sub-items within a productitem. This is necessary in order to be able to carry out a reliable price fluctuation analysis (in practice, other products or products that differ significantly in price are purchased for the same item code).

‍In the demo you see a simplified version of the analysis output. You are able to select one or more price patterns to see if these patterns occur in a particular quarter and how strong these patterns are. A [+] indicates that the price has increased 1 time. So 3 times a + indicates that the price has increased 3 times in a row. A [0] indicates that the price has remained the same and a [–] that the price has fallen.

In tab 3 you can further investigate the price fluctuation for 1 specific supplier at product level. In the demo it was decided to make this transparent for 1 specific supplier.

Note: all data-attributes and visuals in this webpage are based on fictitious data

Zuiver ICT

Get in touch to receive more information on how we can bring your data to actionable insights

Example reports