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PPV can be either favorable or unfavorable and may be tracked for specific time periods (monthly, quarterly, yearly). It is often reported in terms of total procurement spend. Purchase price variance is an important metric for。

For example, if you save $5000 on a purchase order, this favorable PPV shows that your procurement practices are yielding cost savings and can be used as a benchmark for future。

Read more: Cost Variance: Definition, Formula and Examples Why is PPV important? Most manufacturers agree that raw materials take up most of their running costs,。

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