Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Preferred Supplier
A type of supplier relationship where the majority of spend in a particular commodity area is consolidated through one vendor in order to obtain the most competitive pricing and services terms through spend leverage. The buyer and supplier then collaborate to market and promote these products and/or services to the campus users in an effort to drive further spend through the preferred supplier. Preferred supplier does not mean a mandate relationship. End users still have the freedom to purchase through the vendor of their choice but are highly encouraged to utilize the Preferred Supplier for reasons of better pricing and services.
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Prepaid
A term denoting that transportation charges have been or are to be paid at the point of shipment.
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Price
A price is how much you pay for something. You pay $3.25 for your Starbucks Grande two pump vanilla latte. A call center supplier may have a price of $0.50 per minute every time company's customer service representative picks up the phone. Is not limited to, when applicable and when specified in the solicitation delivery charges, installation charges and other costs.
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Price Creep
Refers to increased costs associated from changes that occur when a good or service has not been properly specified. It is generally considered harmful. See also Scope Creep or Requirements Creep.
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Price Index
Usually refers to any of various numbers representing prices at a particular time for a product or category of products as reported to the Department of Labor, Bureau of Labor Statistics of the U.S. Government. Average price movements can be measured up or down from the monthly reports issued.
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Price elasticity
A measure of the change in demand for a product or service in relation to changes in its price
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Preferred supplier list
A pre-approved list of suppliers whose financial stability and technical capability have already been checked
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Prequalification
The screening of potential suppliers in which factors such as financial capability, reputation and management are considered when developing a list of qualified vendors. This is part of the market assessment and sometimes included in an RFI.
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Price Agreement
A contractual agreement in which a purchaser contracts with a vendor to provide the purchaser's requirements at a predetermined price. Usually involves a minimum number of units, orders placed directly with the vendor by the purchase, and limited duration of the contract. Sometimes also referred to as Blanket Order or Master Services Agreement (MSA).
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Price Fixing
Agreement among competing vendors to sell at the same price.
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Price Indexing
A component or clause of a contract that allows for the use of price indexing to establish costs. Often used by businesses and government to adjust payments and/or charges to take account of changes in categories of prices. Also known as Indexation Clauses. Some examples include: Consumer Price Index, Producer Price Index, Construction Price Index, Employment Cost Index, Import/Export Price Indexes, Manufacturing Production Index, Metal Price Index and Commodity Fuel Index.
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Price on application (POA)
Meaning you can find out the price when you contact the organisation
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