How can I measure material cost variance (MKV) or material price variance (MPV)?
Material cost variance (MCV) or material price variance (MPV) is an essential key procurement savings indicator. It identifies the change of material costs or material price with respect to a reference value, e.g. compared to the previous year.
The result should be subsequently compared to the price development on the market as well as the currency effects contained in the change of price so as to avoid erroneous interpretations. The effects measured by the MPV affect the profit and loss statement and therefore demonstrate the added value of the procurement as well.
Dashboards & Insights
Dashboards & Insights is a complete Procurement Controlling and Spend Management solution. It provides all functions, KPIs and measures needed for professional Spend Analysis.
With its standardized ERP interfaces you can connect the spend cube of Dashboards & Insights within a short time frame to any ERP system (e.g. SAP, Navision, Oracle etc.).
Here you will find important terms related to spend management explained in a clear way. Small knowledge base for quick information or in full for your further education. This controlling glossary is constantly being expanded and improved.
Read blog articles about spend management, initiative management and data management in procurement, or other articles from our experts.
For more information, see the following article: