What process allows buyers to understand all of the costs that contribute to a supplier's price?

Cost modelling is the process that enables buyers to analyze and comprehend the full range of costs that contribute to a supplier's pricing. This approach involves breaking down the various components of cost, including materials, labor, overhead, and other expenses, allowing buyers to gain insights into how these factors influence the final price offered by the supplier.

By employing cost modelling, buyers can assess whether the price set by the supplier is justifiable based on the breakdown of these costs. Additionally, this process aids in identifying cost-saving opportunities and can foster more effective negotiations by providing a clear understanding of where adjustments can be made. It leads to better-informed decision-making and fosters transparency between buyers and suppliers.

Other options, while relevant to supplier relationships and pricing strategy, do not provide the same depth of understanding regarding the intrinsic cost factors contributing to pricing as cost modelling does.