Procurement cost-savings (PPV) calculator
The question at year-end is always "what did you actually save us?" Enter the previous unit price, the new negotiated price and your annual volume, and this tool computes the purchase price variance — the per-unit saving, the percentage and the total for the year — then drafts a clean summary sentence you can paste straight into the report.
Your numbers
Savings
Saving per unit
$3.5 − $2.1
Saving percentage
$3.5 → $2.1
Annual saving
× 100000 units / year
Annual cost saving
$140,000
Ready-to-paste summary
This project reduced the unit price from $3.5 to $2.1, a 40% decrease. At an annual volume of 100000 units, the total saving for the year is $140,000 ($1.4 per unit).
Report-level savings usually require a documented baseline — keep the old price and volume evidence in the negotiation record so the number holds up in review.
Counting PPV honestly
Volume matters as much as the percentage. A 20% drop on a low-volume line can be worth less than 5% on your top runner — state both. If the new price only holds under a volume commitment or a market shift, flag that in the summary so the number isn't overstated.
Frequently asked questions
How is purchase price variance (PPV) calculated?
The calculator uses saving per unit = old price − new price, saving percentage = (old − new) ÷ old × 100, and annual saving = per-unit saving × annual volume. Its defaults are an old price of $3.50, a new price of $2.10 and a volume of 100,000 units, which gives a 40% decrease and $140,000 saved for the year.
Why does annual volume matter as much as the percentage?
A 20% drop on a low-volume line can be worth less than 5% on your top runner, so the tool always reports both the percentage and the dollar saving at the volume you enter. It multiplies the per-unit saving by your annual units at the new price to state the total for the year.
Can I use this PPV calculator with any currency?
Yes. The currency is a free-text label (default $), so the same math works for USD, EUR, CNY or any other unit. The calculator just subtracts and multiplies the numbers you enter — it never converts between currencies.
Keep the documented baseline for any saving you report — price history and volume evidence make the number hold up in review. ICBOMS is a sourcing desk, not an accounting service.