What is 'price variance' in SAP SRD-SRM - SRM-Supplier Relationship Management?

price variance - Overview

• Component: SRD-SRM

• Component Name: SRM-Supplier Relationship Management

• Description: A difference between the price stated on a quote or purchase order and the price stated on the corresponding goods receipt or invoice.

price variance - Details

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  Key Concepts: 
  Price variance is a term used in SAP Supplier Relationship Management (SRM) to describe the difference between the expected price of a product or service and the actual price paid. It is calculated by subtracting the expected price from the actual price. This difference can be positive or negative, depending on whether the actual price is higher or lower than the expected price. 
  
  How to use it: 
  In SAP SRM, price variance can be used to monitor supplier performance and ensure that suppliers are providing goods and services at the expected prices. It can also be used to identify potential savings opportunities by comparing expected prices with actual prices. 
  
  Tips & Tricks: 
  When monitoring supplier performance, it is important to consider other factors in addition to price variance. For example, quality of goods and services, delivery times, and customer service should also be taken into account when evaluating suppliers. 
  
  Related Information: 
  Price variance is closely related to other terms such as cost variance and margin variance. Cost variance is the difference between the expected cost of a product or service and the actual cost paid. Margin variance is the difference between the expected margin of a product or service and the actual margin earned.