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Procurement · Definition

Purchase Price Variance

The difference between the price paid and the expected or standard price.

PPV compares actual purchase prices against a standard, budget or last-paid price and reports the gap. Favourable variance means you bought below expectation; unfavourable means above.

Analysed by supplier and item, PPV exposes price creep, off-contract buying and inconsistent pricing between sites — the leakage that spend totals alone hide.

How it is calculated

PPV = (Actual price − Standard price) × Quantity purchased

A negative result is favourable.

See it in AWRA OpsHub

Procurement Insights

Purchase Price Variance is not just a definition here

Procurement runs on this vocabulary every day in AWRA OpsHub — 40 of our 257 glossary terms describe things the platform actually does.