To check the price reasonableness of the purchased product by Procurement manager, I aim to compare the monthly inflation rate of purchased product with world inflation rate of that product and country's inflation rate. Note the fact that in country, there is 1 company who sell sugar. By making this comparison, I conclude if the Price led us to Savings, Costs or Neutral expenditure. As an illustration, the inflation rate in March 2020 of Sugar was 0% and in April it became 9%. Meanwhile, the world inflation rate of Sugar went from 3% (March 2020) to 2%(April 2020). The general inflation rate in country is 4% and the general world inflation rate is 3.5% in 2020. Now, I put these numbers of representative of April on the line for comparison :

2%(WIS) ----- 3.5%(WI) ----- 4%(CI) ----- 9%(CIS)

WIS -World inflation rate of sugar in April WI-general world inflation rate CI- general Country's inflation rate CIS -country's inflation rate of sugar in April

From this comparison, I conclude that the price at which sugar was bought by Procurement manager was quite high and led to extra costs with no savings.

Is this comparison correct? Can I make reasoning in this way?


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