How old is too old?
Started by Squeaky1 · Jun 15, 2010 · 2 replies
- SOriginal post
Squeaky1
Jun 15, 2010 · 15y ago
Obviously when relying on purchase order history it is highly dependent on what you are buying but assume that prices are relatively stable (no market research results showing that price volitility is an issue) then how far back does one assume that history is still valid? Obviously every supplier will have organizational or accounting changes at some point in time. Also new vendors will come and go. So what I am looking for is a rule of thumb and a why that one could use to say what is generally acceptable and what is generally not. I am trying to write some general guidelines for some inexperienced estimators so any ideas would be beneficial.
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FAR Fetched
Jun 17, 2010 · 15y ago
I think the frequency of the purchases in a year is important. There are hundred of thousands of laptops purchased each year so going back more than a year may not be necessary while the amount of ships purchased in a year may be so few (or none) that going back 10 even 20 years may be necessary.
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Guest Vern Edwards
Jun 17, 2010 · 15y ago
There is no rule of thumb. The answer will depend in part on the kind of item you're talking about. Commercial prices in highly competitive markets might change frequently. Prices in markets where technological change is rapid might also change quickly. Prices for certain kinds of stock items might be relatively stable. Noncommercial item prices might be very stable depending upon labor and material costs.