Summary introduction to a Price Mechanism

A price mechanism allows a customer and a supplier to identify key feedstock or cost exposure which they wish to track on a monthly or quarterly basis as a key driver of price adjustments. ProcureAnalytiq is a online software tool that enables you to track these cost developments

The benefit of a price mechanism is enables part of the price adjustment to be transparent and fair, allowing both parties to the deal to manage risk.

This is what that Price Mechanism index could look like. In this example, the parties have agreed that the Film cost is 20% of the price and there is a 10% exposure between US$ and CNY

ProcureAnalytiq will keep track of the price mechanism

ProcureAnalytiq will make the cost exposure transparent, and track any price adjustments that the customer and supplier agree. 

Price increases or decreases related to other negotiations/tenders will be tracked aswell 

This is what that tracking graph would look like.

ProcureAnalytiq has a database of commodity prices, but you can add your own private data.

ProcureAnalytiq has a database of commodity, economic and FX data for you to built into your price mechanism.

But it also allows user to load their own private price index data which is solely for their own use.

The look-up on price data works on a simple type and click function

ProcureAnalytiq gives significant business benefits

Tracking a price mechanism will eliminate frustration and busienss risk for both businesses. You will be able to:

  • better forecast prices change
  • reduce business risks and surprises
  • reduce your workload
  • communicate easier with the Board and senior management

This is what that the statistical analysis looks like.

One party maintains the price mechanism and the other can view free of charge

ProcureAnalytiq is set up so that one of the parties will maintain the Price Mechanism, and the other party can track the progress online  over the Internet at any time.

The system is flexible so that any adjustment can be made to the prices and the tracking mechanism

Introduction to price mechanisms

Use-cases of price mechanism tools

How to set up a price mechanism

Procure Analytiq

DELIVER DIRECT MATERIAL SAVINGS

ProcureAnalytiq is an online cloud-based software tool to track market developments and leading indicators related the direct material purchases for your business. 

ProcureAnalytiq enables user to faster reaction to market changes, better negotiations, automated forecasting of material pricing, better internal and external communication, and ultimately reduces direct Raw Material prices.

Interested to explore more?  

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