The Target Pricing Controversy
By Charles Dominick, SPSM, SPSM2, SPSM3
Are You Using Or Misusing Target Pricing?
Target pricing has both supporters and opponents among purchasing experts. With target pricing, it is neither right nor wrong to provide target pricing to suppliers. You just need to do so in the right context.
Target pricing works well when:
Let me elaborate a bit more on points #4 and 5. In many cases, buyers purchase a variety of items and can't be technical experts for every category. As such, they need to get quotes from suppliers to know what their price will be. In these cases, target pricing should not be used.
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