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Purchase price variance is a financial metric used in procurement and supply chain management to assess the difference between the expected (also known as standard or baseline) cost of an item and its actual purchase cost. PPV measures the gap between what the company planned to pay for a product or service and what they actually paid.

What is PPV (Purchase Price Variance)? It is the difference between the budgeted or standard price of an item and the actual amount pappv meaning financeid to acquire that item. Think of it as a financial reflection of how a company’s purchasing strategies perform against market price。

In Procurement, Purchase Price Variance (PPV) is the difference between the standard price of a purchased material and its actual price. In Short Purchase Price Variance = (Actual price - Standard price) x Quantity purchased.

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