Margin Matching

A technique used to fairly adjust actual prices to be paid based on movements in the defined underlying pricing model assumptions and avoids having one party “win” at the other party’s expense. Margin matching includes establishing a trigger point that activates to reset prices when the point is met. For example, the inflation rate might be a trigger point for resetting inventory carrying cost charges. The goal of using a margin-matching technique is to establish pricing fairness, which ultimately builds trust and a better working environment.