Pricing methodology that gives the buyer full visibility to all of the costs in a given outsourced program. The buyer and seller agree contractually on a fixed percentage of profit as part of the cost. The actual cost, plus the agreed-upon profit margin, is paid by the buyer to the seller directly (not as part of supplier mark-up). The advantages of this model is the transparency and flexibility of determining exactly what activities and what costs are in the model and the ability to collaboratively optimize these over time. May also be known as “Should Cost Pricing.”