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Read more: Cost Variance: Definition, Formula and Examples Why is PPV important? Most manufacturers agree that raw materials take up most of their running costs,。

Purchase price variance is a financial metric used in procurement and supply chain management to assess the difference between the expected (also known as standard or baseline) cost of an item and its actual purchase cost. PPV measures the gap between what the company planned to pay for a product or。 See more

For example, if you save $5000 on a purchase order, this favorable PPV shows that your procurement practices are yielding cost savings and can be used as a benchmark for future。

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