The use of a standard process for breaking down, examining and evaluating the cost structure of a purchased product or service; it is also an evaluation of actual or anticipated cost data (material, labor, overhead, general and administrative, and profit) of a certain product or service against expectations for those costs, and finally it is the utilization of relevant experience, knowledge and judgment to financial data to project reasonable estimated delivered costs for comparison against actual, supplier-provided costs.
The use of a standard process for breaking down, examining and evaluating the cost structure of a purchased product or service; it is also an evaluation of actual or anticipated cost data (material, labor, overhead, general and administrative, and profit) of a certain product or service against expectations for those costs, and finally it is the utilization of relevant experience, knowledge and judgment to financial data to project reasonable estimated delivered costs for comparison against actual, supplier-provided costs.