- Challenge all price increases.
- Establish systematic method to handle all price increase.
- Reason for price change request.
- Impact of price change to firm.
- Justification for price change.
- Review of price change by management.
- Strategies to deal with price increases.
- Alternatives-reduce other price elements/ improve processes to offset price increase/lead time reduction/improve services/price protection clauses/advance notification to price increase.
Forward Buying.
- Protection from anticipated shortage/price increase.
- Must evaluate trade off.
Speculative Buying.
- Buying more than is required to sell for profit at a later date.
- Margin must offset incurred cost.
