... are working towards gaining part, or all, of the surplus value from every transaction in which they partake. The surplus value is the difference between the costs that the vendor incurs when making the products for the buyer and the price placed upon the product by the buyer; as illustrated by the diagram below; 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 £ Every firm is interested in gaining this surplus value and improving on their value for money proposition. Value for money is not solely based on cost, it is also established on functionality and has a set equation that can be used to calculate it; Value for Money = Functionality Cost of Buyer Supply chain management is about managing these exchanges in order to align the internal and external processes in an appropriate manner so that the business will gain the surplus value ...

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