Which factor is not typically included in the piece price?

CIPS Managing Ethical Procurement and Supply Test is designed to enhance your understanding of ethical practices in procurement. Study with comprehensive questions and explanations. Prepare effectively for your exam!

The correct answer highlights the distinction between costs directly associated with the production of goods and those related to logistics. Piece price generally refers to the direct costs involved in manufacturing a product, which includes manufacturing costs, supplier's overhead costs, and the supplier's profit margin.

Manufacturing costs cover everything required for creating the product, such as raw materials and labor. Supplier's overhead costs account for indirect costs necessary to support production, like utilities, rent, or administrative expenses. The supplier's profit margin is what the supplier adds to their costs to ensure profitability.

Transport costs to the purchasing business, however, are typically considered separately from the piece price. These costs pertain not to the supplier's production expenses but to the logistics of delivering goods to the buyer. Therefore, they are generally included in the total cost of ownership or total acquisition cost, rather than being part of the piece price itself. This is why the transport costs to the purchasing business are not typically included in the piece price calculation.

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