priceanalysis

Price analysis, also written as priceanalysis, is the systematic process of examining prices of goods and services to understand market levels, assess fairness, and inform economic or business decisions. The practice can be descriptive, tracking historical price changes and patterns, or inferential, using statistical methods to explain price movements or to forecast future prices. In procurement contexts, price analysis refers to evaluating the price of proposals to determine whether a quoted price is reasonable, often by comparing to independent price estimates, historical prices, or published indexes, without assessing the vendor's technical capabilities.

Common methods include time-series analysis to identify trends and seasonality; benchmarking against equivalent products or historical prices; regression or hedonic pricing to account for differences in quality and features; and index-based comparisons using consumer price indices or producer price indices.

Data can come from public price indexes, supplier quotations, historical purchasing records, market reports, online catalogs, and government or industry databases. Price analysis supports procurement decisions, budgeting, supplier negotiation, and market surveillance; it also informs price forecasting and trend analysis for businesses and researchers.

Limitations include data quality, geographic and product heterogeneity, changing terms (bulk discounts, payment terms), and inflation effects. Prices may reflect temporary promotions, supply shocks, or strategic pricing, complicating comparisons. Price analysis is most effective when paired with other assessment methods such as cost analysis or value assessment.