An effective cost model is one of the most valuable tools for an organisation and serves as an aid for building stronger relationships with suppliers while ensuring transparency in costs. By thoroughly understanding the cost structure of the goods and services purchased, we, at IMARC, offer comprehensive cost modeling and forecasting services to assist our clients in their procurement decisions. We provide them with cost models that are flexible, accurate and easy to use. These models help our clients analyse the total production, procurement and ownership costs, enabling them to optimise their processes, thereby, improving the bottom lines.
Benefits of our models
Our cost models are one of the most efficient and predictive models in the industry. With precise details about the manufacturing process, they also have information about the pricing of all the components affecting the production cost such as the process, machinery, raw materials, by-products, utilities (electricity, steam, fuel, process water, etc.), investment, labour, financials, etc. IMARC also collects other external data such as shipping/transportation indices and federal government economic indicators (CPI, PPI, BLS surveys, etc.) which may possibly affect the procurement costs. With the help of this information which includes cost components and drivers, we present to our customers an organised and standardized data by using different modeling techniques such as Time Series Modeling and Regression Trees. These models are validated by our analysts and other domain experts reaching a value nearest to the actual cost. The final prepared models can predict the production costs over a specified time period as required by the client (depending upon the amount of available historical data).
The final model will help the client:
- Identify the total cost of products/services being procured.
- Understand all the factors affecting the procurement costs.
- Develop a deep understanding of the flow of manufacturing process.
- Control and monitor procurement finance and resolve any issues related to it.
- Engage a supplier that has not provided any cost information.
- Prepare for supplier negotiations and compare suppliers’ proposals that contain different supply chain components.
- Build credibility and respect during negotiations.
- Decide whether to produce or buy.