Supply Chain & Procurement worked example

Purchase Price Variance with actual price paid per unit of 310 units: a worked example in supply chain & procurement

What does the result look like when actual price paid per unit reaches 310 units? The full calculation is worked below with real intermediate numbers. Use it when purchase price variance in supply chain and procurement needs a clean margin number for a supply chain and procurement go / no-go review.

The inputs for this scenario

  • Actual price paid per unit: 310 units (raised for this scenario; the documented default is 125)
  • Standard or quoted price per unit: 100 units (unchanged)
  • Standard cost reference baseline: 100 units (unchanged)

Working through the calculation

  • Applying the documented formula (Margin = gain or available amount - cost or required amount) to the inputs above produces each figure below.
  • At this operating point the engine returns 210 % for purchase price variance margin, the number this scenario is built around.
  • At this operating point the engine returns 210 value for purchase price variance amount gap.
  • At this operating point the engine returns 310 value for available purchase price variance amount.
  • At this operating point the engine returns 100 value for required purchase price variance amount.

How this compares with the baseline

  • Against the tool's baseline example, where actual price paid per unit sits at 125 units and the headline result is 25 %, this scenario comes in 740% above the baseline at 210 %.
  • A figure at this level is achievable when actual price paid per unit is genuinely sustained, not just peaked for a shift. PPV alone doesn't explain the cause — a variance can come from market moves, volume changes, spec changes, or FX, so investigate before rewarding or penalizing a buyer.

Results at a glance

  • Purchase price variance margin: 210 % (headline result)
  • Purchase price variance amount gap: 210 value
  • Available purchase price variance amount: 310 value
  • Required purchase price variance amount: 100 value

Run it with your numbers

  • Every input above is editable in the live Purchase Price Variance calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.