The following section explains how the system calculates the score for the automatic subcriterion "Price History".

To determine how a vendor's price for a material has changed over the last few years, the material's price history is compared with the market price history.

1. The system first checks whether the buyer has maintained the current market price and last year's market price for the material.

If not, the system uses the price for the material group to which the material belongs.
If this price is not maintained either, the system uses the effective prices from the previous year and the current year. Prices from standard purchase orders for materials and prices from subcontract orders are dealt with separately.

2. The system then calculates the percentage variance between the old and new market prices.
3. The vendor's effective price is re-calculated with this percentage variance. The result represents the effective price the vendor should be asking if his price had changed over time in the same way as the market price.
4. This calculated effective price is then compared with the actual effective price, and a percentage variance is determined.
5. The system then awards the vendor the score you have maintained in Customizing for this percentage variance.
6. The system repeats this process for all the materials you procure from the vendor. Each time you start an evaluation, the system calculates the average score for all the materials. The result is the vendor's score for the subcriterion "Price History".