Price Analysis Essay Example | Topics and Well Written Essays - 500 words - 1

Price Analysis - Essay Example R) promulgates which is a helpful guideline that assists both the parties to transaction regarding the correct price of any article (Subpart  15.4-Contract Pricing). There are different sorts of techniques that are highlighted in FAR, to correctly estimate the price of goods and services (Price Analysis Techniques: Procurement 2011). Some of them are listed below with brief description. This price analysis technique involves use of previous quotations in respect of the same item. However, this technique has the drawback in the form of not incorporating the element of inflation that normally increases with the passage of time. This method of determining the price utilizes the published list of prices in respect of goods and services, of similar types. Normally goods relating to general use are included in this category as the appropriate authority lists the prices of those goods for the general public. This technique refers to the determination of price through different laws. Normally government authorities fix some prices via law so that local producers can take benefit as well as the customers in order to avoid the danger of shortage. This technique is basically not a technique rather a way out to determine the prices when no such technique is available to determine the appropriate price. In this method, prices are sought by the personal judgment of the buyer based upon his past experiences and perception related to that particular product. Among these broad techniques, the most commonly used technique is the comparison of Bid Price Technique. In this technique, suppliers are asked to quote their prices and in the end, when best price is found, the tender is given to that particular supplier (Dahl and Hammond 1977). This technique is also useful as the true price prevailing in the market is sought and the element of monopoly is mitigated through the use of this technique. This technique basically erodes the importance of all other techniques as in this