Should-Cost Modelling

Understand true product cost drivers.

Model value chains and link benchmarks and indices to uncover how each cost driver impacts your final product — enabling fair, data-backed negotiations.

Final Item
Vinylacetate
809.759 EUR/MT
Live model 5 drivers
Ethylene +5%
149.72 EUR · N. America
Acetic Acid +8%
569.8 EUR · PINPOOLS
UK Electricity −1%
90.23 EUR/MWh
Methanex +3%
347.49 USD · reference
Natural gas +3%
0.0479 EUR/MMBtu
The old way

Procurement without cost transparency is a coin toss.

Blind negotiations
Suppliers cite "market conditions". You accept a 6% increase. Based on what, exactly?
Category expertise trapped in Excel
The cost model lives in one buyer's spreadsheet. When they leave, category knowledge leaves with them.
Reactive sourcing
You learn about a feedstock spike from your supplier's invoice — long after the market moved.
The PINPOOLS way

One model. Every cost driver. Full transparency.

The Cost Model reflects how the price of a product is formed based on its components. By leveraging real, data-based insights it supports price forecasting, market analysis, risk mitigation, and strategic decisions — as one central, automated system.
Value-chain mapping
from feedstock to final item
Live indices
and PINPOOLS benchmarks linked
Correlation analysis
for every driver's impact
AI forecasting
with time-lag propagation
Benefits

What buyers get out of it.

Every price conversation starts with a data-backed model — the cost drivers, their weights, and where they're headed.

Gain negotiation leverage

Every proposed price increase is tested against the model — with facts, not opinions.

Improve transparency and trust

Suppliers justify price changes with the same numbers you see — one shared language.

Automate value-chain analysis

The AI-based Cost Model automates parts of the value-chain construction and correlation analysis.

Reduce supplier dependency

Category knowledge sits in the model — visible to the team, portable across suppliers.

Key capabilities

Every driver, linked and forecastable.

Five capabilities that turn a supplier's price into a defensible number.

FINAL ITEMEthyleneAcetic AcidElectricityNat gasMethanexGrid mix

Value-chain mapping

Break a final item into feedstocks, transportation, energy and other drivers — as deep as the category needs.

1 MT = 0.375 × ethylene + 0.700 × acetic
   + 0.39 × methanex + 1 MWh × grid
Modelled price809.759 EUR

Formula-based pricing

Weights, units and adjustments per driver — one transparent formula behind the final price.

Correlation analysis

See how each factor contributes to the final price — quantified, not intuited.

now+8% · 3 mo

AI & time-lag forecasting

Model how cost changes propagate through the value chain over time — days or weeks ahead of the invoice.

P
PINPOOLS Benchmarks569.8 EUR
I
Commodity indices174.375 USD
C
Your indices & customCSV / API

Benchmark integration

Link cost drivers to live commodity indices and PINPOOLS benchmarks — no manual data pulls.

How it works

Five stages from cost drivers to defensible price.

Define the product. Link its drivers. Let the model do the math.

Set up Model Modeling Upload your own indices
Title ↑OwnerIndicesShould costVolume
Total sum€4,884.822 416 611
1,3-ButanediolMr. Jack1,3-Buta…+4 more€0.500
1,3-ButanediolMr. MickalAcetyl…+5 more€0.890
1,3-ButanediolMr. AlexHydrogen€0.950
1

Set up your Model

Create the final item — set name, owner, unit, currency. Choose calculation type (absolute or relative). All models live in one list, with Should Cost, Volume and Spend visible at a glance.

Set up Model · Modeling · Upload your own indices

Add cost factors

Add each driver as a child item. Pick from four data sources — PINPOOLS Benchmarks, Commodity Indices, Your own indices, or a Custom Item. Set quantity per kg, apply an optional formula adjustment, and choose region/country for AI data.

4 data sources · formula adjustments · AI region
2
Add cost factor×
* Child item:
Acetic Acid
* Quantity of Acetic Acid needed per kg of butanediol
0.57 1.157 EUR/Kg (2026-04-01)
Formula adjustment (optional)
e.g. +100, *1.05, -50, /2
CancelAdd cost factor
acetone (test 4)
PINPOOLS Should Cost
TreeFrameworkSplit
2,270 USD/kg2.284 USD 3M2.284 USD 6M
Cumene 39% · Propylene 25% · Benzene 35% · Catalyst 1%
Feedstocks & Materials
UOM: kg · 2,270 USD
↑ 1.31 kgCumene0.671 USD/kg
↑ 0.62 kgPropylene0.916 USD/kg
↑ 0.74 kgBenzene1.065 USD/kg
↑ 0.01 kgCatalyst3.500 USD/kg
↑ 0.5 kgWater— USD/kg
3

Build the value chain

Chain feedstocks, energy and other blocks into a tree. Switch between Tree, Framework, and Split views. Add CO₂ per driver with the AI estimate.

Tree · Framework · Split · CO₂ estimation

Analyze the cost structure

Read historical price structure as a stacked bar over months, and current cost structure as a share pie. See which driver moved the total — and by how much.

Historical price structure · Cost share pie
4
Cost BlocksCost Factors
Historical Price Structure
321
May '25 · … · May '26
Cost Structure
Cumene38.7% Benzene34.7% Propylene25.0%
Model StructureModelForecast & NewsForecast Accuracy
Forecast Accuracy based on MAPE
Accuracy = 100% − Mean Absolute Percentage Error
1008060400 PropyleneBenzeneNaphthaNatural gasAcetone
1M 3M 6M
5

Forecast & negotiate

Track forecast accuracy per driver with the MAPE view. Test every proposed supplier price against the model — accept, challenge, or counter with facts.

1M / 3M / 6M accuracy · Negotiation view
Business case

Replace spreadsheets with a living cost model.

Customers use the should-cost model to build complete cost structures for their core materials. By linking relevant feedstock indices, transportation costs, and energy data, they visualize how each factor contributes to final product pricing. This transparency enables data-driven negotiations, ensuring suppliers justify price changes with facts.

The model is often used alongside benchmarking and forecasting to anticipate market movements and build resilient sourcing strategies. For many organizations, it replaces time-consuming spreadsheet analysis and secures cost stability by grounding discussions in objective data. It has also become a key knowledge tool, capturing category expertise that remains available even when personnel change.

Cost corrections
8%
achieved on modelled categories
Cost analysis
2×
faster than spreadsheet workflow
Supplier dialogue
Transparent.
price changes justified with facts
Price stability
Long-term.
grounded in objective data

“We replaced twelve Excel files with one PINPOOLS model. Category knowledge that used to live in one buyer's head is now visible to the whole team — and every price discussion starts with data.”

Category lead, direct materials · chemicals
Trusted by industry leaders

Procurement teams in chemicals, pharma, and coatings
build with PINPOOLS.

Frequently asked

Should-Cost Modelling questions, answered.

What can I build cost models for?

Any material or product where you know (or can infer) the cost structure — raw materials, packaging, freight, energy-intensive products, and similar.

Do I need to manually enter every index?

No. Indices and benchmarks can be linked directly, and the AI-based Cost Model automates correlation analysis and time-lag effects.

How does this integrate with negotiations?

Cost models sit alongside RFX and Series Requests, so proposed prices can be validated against the model before a buyer accepts or challenges them.

Is the cost model a knowledge asset for the team?

Yes — customers report that models capture category expertise, so knowledge stays with the organization even when personnel change.

Can I combine cost models with forecasting?

Yes. Cost Model + Forecasting is a common combination for "what-if" scenario simulation and proactive risk management.

Stop guessing. Start modelling.

See a should-cost model built on your data in a 30-minute demo.

Live indices · AI forecasting · Onboarding in days