This article shows how to understand the impact of purchase price changes compared to the previous year’s prices, using Fourth Analytics.
The Year on Year (YOY) Price Movement tab can be found within the Cost Price Analysis dashboard. It shows comparisons of the average price per base unit (kg/ltr/gal/lb) of a product in the same month from last year. It will only return a comparison if the product has been purchased both years.
Displayed at the top the page, this shows the number of products purchased and being referenced (purchased both years) and the volume of purchases in base units. Shown at right, this graphic indicates decreases against average price last year and increases (red) against average price last year, and total net for the chosen time period. In the example below, decreases made were less than increases incurred producing a net overall increase compared to last year of 14,003 based on average prices per base unit.
Fig.1 - YOY Price Movement banner
Top 10 YoY Price Variance by Property & Product
Shows the largest 10 variations compared to last year by Property or Product for products purchased in both years for the chosen time period.
Fig.2 - Top 10 YoY Price Variance by Property & Product graph
YOY Base Price Variance by Category / Vendor
Shows the price variance by vendor and category, showing the total received and price variance to last year’s price. There is drill-through functionality by clicking on the required category/vendor name for more detail.
Fig.3 - YOY Base Price Variance by Category / Vendor table
YoY Base Price Comparison
This breaks down the price differences to last year by product, showing the variance in monetary and percentage terms. Also displayed is the quantity purchased.
Fig.4 - YoY Base Price Comparison
YoY Base Price Variance by PO
This breaks down price variances to show the individual P.O. upon which the product was purchased.
Fig.5 - YoY Base Price Variance by PO
Assess the impact of price changes in meat compared to last year.
- First, choose the required time period using the Date Dimension (Business day) filter under 'Property Details'
- Within the 'Product Details' filters, set the Category filter as required
- Refer to the number of products purchased this year compared to the number of products purchased in both years to see if this is a relevant exercise
If the number of products purchased in both years is low, it may not be enough to provide a useful comparison. If there are many products purchased last year which are still being purchased, this becomes a relevant comparison.
The right hand graphic will indicate the net price impact and if movements have been both positive and negative.
- The Top YoY 10 Price variance by Property & Product graph (Fig.2) will show which property has the greatest opportunity cost / benefit and which products are causing this
- YoY Price Variance by Vendor (Fig.3) will show which vendors are causing this
- Refer to YoY Base Price Comparison (Fig.4) to determine which products have made the biggest impact (sort by variance or variance % as required)
- Refer to the YoY Base Price Variance by PO (Fig.5) to see if the vendor is the same as the previous year
Differences may indicate this is why purchase prices have changed.
If vendors are the same, there has been a price change for the product and you may wish to change / restrict product usage to increase the benefit or limit cost rises.