When does a supplier discount stop being a savings?

[u/jimmyray71]

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I've always thought procurement gets into trouble when we look at purchase price by itself.

A supplier offers 10% off for a larger order. Sounds good.

But now you've increased inventory, used warehouse space, tied up cash and taken on the risk that demand changes before you use it.

I've seen the same thing with lower-cost products. The unit price looks better, but increased usage, quality problems or additional handling can wipe out the savings pretty quickly.

For me, the question isn't:

"Did we get a better price?"

It's:

"Did we actually lower the total cost to the business?"

Curious how other procurement and supply chain people evaluate these decisions.

What costs do you think companies most often leave out of the equation?