Upon completion of this chapter, the reader should be able to:

13.1 State the factors that impact the purchasing decision.

13.2 State the differences in price/cost setting strategies based on economics and psychology.

13.3 Describe the common discounts a supplier may offer a buyer.

13.4 Explain the relationship between cost and price when determining pricing.

13.5 Discuss how learning curve analysis relates to materials purchase price.

13.6 Explain how to implement various pricing methods.

13.7 State the difference between gross margin and markup.

13.8 Explain how the price/ cost analysis process can be used to effectively negotiate and protect against a competitive bidding trap.