Prices can fluctuate rapidly on the world markets, which keeps buyers in the manufacturing industry, trade and primary production on their toes. It is more difficult for trade buyers as purchase decisions are based on trends in raw material prices and currencies and the knowledge of how a change in the price of one raw material will actually affect the price of a product containing several raw materials. This is something that a customer buying chocolate-flavoured cereal at a wholesalers also needs to consider, for example, when apprehensively following the skyrocketing price of cocoa.
There is a solution to overcome this daily challenge faced by buyers: a procurement analytics tool that shows buyers how the price of a product is actually formed and how different factors that affect the price contribute to a trend.
The model that simulates the way a price is formed by combining certain main components of the product’s price – product composition, raw material price trend and exchange rates – turns buying into a decision-making process based on fact rather than gut feeling.
The information sources for the price-simulation model are raw material, labour and energy price trends provided by the Mintec service and information on the composition of foodstuffs. Therefore the model can provide manufacturing industry buyers with information on the world market trend for cocoa, taking into account exchange rates, and the apprehensive customer at the wholesale store will be able to find out what impact this trend will have on the price of chocolate-flavoured cereal. This procurement analytics tool makes everyday decision-making easier for buyers. Would your buyers benefit from an analytics tool like this?