The Cost Model is a key component of the Strategic Sourcing process, representing the quantification of all costs associated with the material or service being sourced. This includes material or service costs as well as all applicable internal process costs. The Strategic Sourcing Toolkit contains a brief overview of the Cost Model in Phase II (Assessment), and gives a perspective of where the Cost Model fits into the five-phase sourcing process. Because the Cost Model is such a critical component of the sourcing process, and because it requires a detailed, consistent application, this Cost Model Toolkit has been assembled as a guide to its implementation. The toolkit contains examples and case studies to clearly explain the Cost Model methodology and process as it has been applied to previous sourcing engagements.

Contributors: SIG
Categories: SIG U Resource, Tool
SRC Type: Evaluation and Selection, Sourcing