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A Rate Contract [1] or a Rate Agreement (RC in short) is a procurement cost reduction strategy aimed at standardizing procurement prices for commonly procured, homogenous and price varying inputs. Timing
Simplified Acquisition Procedures (SAP) are a set of streamlined procedures for government procurement in the United States that reduce the administrative burden of awarding procurements below a threshold value, which, as of 2023, is $250,000. [1] The procedures are described in 48 CFR 13.
Cost reduction is the process used by organisations aiming to reduce their costs and increase their profits, or to accommodate reduced income. Depending on a company’s services or products , the strategies can vary.
Transaction costs reduction – Electronic automation of processes is supposed to replace various phases of procurement processed manually. It can significantly reduce wage costs, printing costs and make communication much easier for both contractor and supplier. [1] There have been various studies estimating these cost savings.
The discussed advantage is an administrative costs reduction again as tender procedure do not have to be duplicated for agreed period of time. [22] On the other hand, the term "Winner's curse" is associated with framework agreement as there is a price uncertainty in time. [32] All of these three procurement strategies are not mutually exclusive.
Strategic sourcing is the process of developing channels of supply at the lowest total cost, not just the lowest purchase price.It expands upon traditional organisational purchasing activities to embrace all activities within the procurement cycle, from specification to receipt, payment for goods and services [1] to sourcing production lines where the labor market would increase firms' ROI. [2]
Low-cost country sourcing (LCCS) is procurement strategy in which a company sources materials from countries with lower labour and production costs in order to cut operating expenses. [citation needed] LCCS falls under a broad category of procurement efforts called global sourcing. The process of low-cost sourcing consists of two parties.
Cost-plus pricing is a pricing strategy by which the selling price of a product is determined by adding a specific fixed percentage (a "markup") to the product's unit cost. Essentially, the markup percentage is a method of generating a particular desired rate of return.