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Supplier Weights

Enter weights by supplier. Weights are applied using the following formulas:

Factored-Cost Unit Price = (100% + m%) (Bid + a) + b

Factored-Cost Total Cost = (Factored-cost Unit Price * Bid Quantity) + s

Note Note

The examples below apply to a reverse auction.

End of the note.

Example Example

  • (m) Multiplier: Enter a value that should be applied as a percentage to a particular supplier. For example, for you might enter 20 for a 20% switching cost, or -3 for a 3% discount. See lines 1 and 4 in the table below.

  • (a) Additive Value 1: Enter an additive value to which the multiplier applies. For example, you might enter 2 to indicate a $2 transportation fee to which an import tax applies. See line 2 in the table below.

  • (b) Additive Value 2: Enter an additive value to which the multiplier does not apply. For example, you might enter 2 to indicate a $2 delivery fee to which sales tax does not apply. See line 1 in the table below.

  • (s) Setup Cost: Enter any setup cost. This indicates an incurred cost that does not vary with volume or quantity and is most applicable to partial quantity auctions. The setup cost is applied to the total cost of the bid, not to the bid unit price. See line 5 in the table below.

    The setup cost is shown in the Factored-cost Bidding by Supplier report. It does not affect bidding rank or unit price in the auction display.

  • Apply Weights to Line Items: Select the suppliers whose weights you want to apply to line items and choose this option. You can also manually enter or override weights in the table.

Line Number

(m) Multiplier

(a) Additive Value 1

(b) Additive Value 2

(s) Setup Cost

1

20

0

2

0

2

5

2

0

0

3

8

3

0

5

4

-3

0

0

0

5

0

0

0

30

For a $10 bid, the weights in this table are applied as follows in a reverse auction:

  • Line 1: (100% + 20% switching cost) ($10 bid + 0) + $2 delivery fee = $14 unit price

  • Line 2: (100% + 5% import tax) ($10 bid + $2 transportation fee) + 0 = $12.60 unit price

  • Line 3: (100% + 8% sales tax) ($10 bid + $3 service fee) + $5 delivery fee = $19.04 unit price

  • Line 4: (100% - 3% discount) ($10 bid + $0) + 0 = $9.70 unit price

  • Line 5: Assuming a bid quantity of 20 items:

    ($10 bid * 20) + $30 setup cost = $230.00 for the extended bid price (not the unit price)

End of the example.