The price of an item is the amount the purchaser pays for goods or services received. Frequently the purchaser knows little or nothing about the seller's costs. Cost Cost is the amount the seller or manufacturer expends to create the product or service, including labor, materials, and overhead, but not profit. Variations in cost among suppliers can be the result of differences in efficiency. Value Value is synonymous with worth, and is distinct from price and cost.
Value encompasses relative worth, utility, or quality.
An item's value is a balance amonggetting a good price, not dealing with an inefficient producer, and not paying more than a fair profit to the efficient producer. Value is subjective, and can be difficult to calculate. Value can vary depending on how acute the purchaser's need or desire is for the item. The requesting department is responsible for performing any appropriate value analyses. Procurement can provide information on availability, price of components, and substitutes for the item being analyzed.