PPCA (Profit, Price & Cost Analysis)
Profit, Price and Cost Analysis (PPCA) is a business tool used in procurement to assess an item’s overall value. It involves examining the projected profit and revenue generated by a product or service, the price of acquisition, and the cost of production over its life cycle. PPCA helps procurement professionals understand the economic dynamics of the item under consideration in order to make an informed decision on whether to purchase it. By taking into account all the relevant factors – not just price alone – PPCA ensures that businesses get the best return on their investments, while maximizing profitability and minimizing expenses.