STRATIX/PriceSTRATIX/Price

Options available to accommodate pricing strategies

STRATIX/PriceSTRATIX/Price

Provides for automatic calculation of:• Metal Price• Freight Charge• Miscellaneous Item Charges• Total Order Charges• Alloy Surcharge• Test Certificate Charges• Freight Insurance• Processing Charges and Costs

Benefits for Sales of Metal PricingBenefits for Sales of Metal Pricing

General Features Suggests a metal price for Sales

Eliminates need to look up prices in printed books Increases speed of customer service

Ability to vary prices by Customer and/or quantity sold Contract Pricing with expiry date Ability to adjust prices for seasonality

Order Entry Features Checks suggested metal price for price violations Provides ability to change price by changing quantity bracket

Faster than manual changes Encourage customer to order more to get a price break

Re-Price feature to get latest price book changes

Metal Pricing FeaturesMetal Pricing Features

Price calculated using Price Basis and Metal Price Book

Price Basis Features Base price on Average or Replacement Cost, or Base Price Corporate or branch based Size & Dimension Extras Accommodate market conditions with seasonality factors

Metal Price Book Customer specific or generic pricing available Contract pricing Quantity brackets

Selling Price CalculationSelling Price Calculation

Price Basis

R epl.Cost

BasePrice

AveCost

M etal Price Book

Custom er P ricing Levels

Q uantity Brackets

SELLI N G PR I CE

Price BasisPrice Basis

Starting point of Selling Price

Provides ability to base Selling Price on Replacement Cost, Average Cost, or Base Price

Can be configured by Customer or for all Customers

Price Basis

R epl. Cost Base PriceAverage Cost

M etal P rice Book

Custom er P ricing Levels

Q uantity Brackets

SELL I N G P R I CE

Typically, costof acquisition

Current cost ofAverage Cost Pool

Used asdesired

Price Basis DecisionsPrice Basis Decisions

Average Cost

Replacement Cost/Base Price

Advantages

No set-up or maintenance required

Automatically maintained by STRATIX on real-time basis

More control over pricing

Consistent pricing Repl. Cost can be used

for inter-company sales, while Base Price is used for all other sales.

Disadvantages

Unusually low Purchase Price may skew Average Cost

Less control over pricing

Inconsistent pricing

Set-up/maintenance required

Price Basis Decisions ContinuedPrice Basis Decisions Continued

Replacement Cost & Base Price can be defined by:• Material (with

Extras)• Product

Corporate decisionMaterial (with Extras)• Replacement Cost/Base Price

equal to sum of Material Component &/or Size Extra &/or Dimension Extra

Product• Replacement Cost/Base Price

specific to Product & Dimension

Price Basis

R epl. Cost Base PriceAverage Cost

M etal P rice Book

Custom er P ricing Levels

Q uantity Brackets

SELL I N G P R I CE

M aterial PriceBase + Extras

ProductPrice Base

M aterial PriceBase + Extras

ProductPrice Base

Price Basis Decisions ContinuedPrice Basis Decisions Continued

Material with Extras

Product

Advantages

Decentralized • Branch-based

Changing Material component automatically changes all Repl. Costs/Base Prices

Disadvantages

Centralized • Company-wide

ExtrasExtras

Used to mark up Replacement Cost/Base Price based on Size and/or Dimensions of Product

Rate (Pcs, Lgth, Area, Wgt, etc.) or %

Size Extra Defined for:

• Specific Size Angles: 22316, 2214, etc.

• Range of Numeric Sizes Rounds: Up to 50, 60, etc.

Dimension Extra Specific Dimension, Range of

Dimension, or All Dimensions

Price Basis

R epl. Cost Base PriceAverage Cost

M etal P rice Book

Custom er P ricing Levels

Q uantity Brackets

SELL I N G P R I CE

M aterial Price Base+ Size Extra +

D im ension Extra Product PriceBase

Product PriceBase

M aterial Price Base+ Size Extra +

D im ension Extra

Example - Price Basis CalculationExample - Price Basis Calculation

Price Basis = Material Price Base + Size Extra + Dimension Extra

Size Ex traM ateria l P riceBase

CA/ 36

R epl. Cost =15 / CW T

D im ension Ex tra

Base Price =17 / CW T

0-20' 1.00/ CW T 1.50/ CW T20.1-40'

40.1-999' 2.00/ CW T

1.50/ CW T

2.50/ CW T

2.00/ CW T

2214

22316

3314

331222516

2238

17%

21%20%

19%

18%

22%

15%

20%

19%18%

17%

16%

Price Basis =M aterial P rice Base + Size Ex tra + D im ension Ex tra

Price Basis (based on R eplacem ent Cost) =[15 .00 / CW T * (1 + 0 .19 ) ] + 1 .00 / CW T = 18 .85 / CW T

Price Basis (based on Base Price) =[17 .00 / CW T * (1 + 0 .21 ) ] + 1 .50 / CW T = 22 .07 / CW T

O rdered Product

M ateria l S ize D im ension

CA/ 36 3312 12 '

Metal Price Book FeaturesMetal Price Book Features

Specific to a customer or generic for all Customers

Contract Pricing Vary pricing by Customer with up to 10

Customer Pricing Levels Vary pricing by Ordered Quantity with

up to 20 Quantity Brackets View MPB’s with upcoming Review

Date Pop-up Pricing Instructions for Sales Facility to view missing price book

entries

Price Basis

R epl.Cost

BasePrice

AveCost

M etal Price Book

Custom er P ricing Levels

Q uantity Brackets

SELLI N G PR I CE

Obtaining Metal Price Book RecordObtaining Metal Price Book Record

Once Price Basis is determined...

Price Basis

R epl.Cost

BasePrice

AveCost

M etal Price Book

Custom er P ricing Levels

Q uantity Brackets

SELLI N G PR I CE

Find m ost specific M etalPrice Book for given

Custom er and Product.

Scan M etalPrice Book

Scanning Metal Price Book RecordsScanning Metal Price Book Records

Most specific Record used given Customer & Product...

FormType

Generic

P rice Category

Custom er

Custom er ContractG rade SizeFin ish D im ension

Spc, R ange, A ll

FormFormForm

GradeGrade F in ish

F in ish***

S ize Spc, R ange, A llSpc, R ange, A llSpc, R ange, A ll

Spc, R ange, A llSpc, R ange, A llSpc, R ange, A llSpc, R ange, A llSpc, R ange, A llSpc, R ange, A llSpc, R ange, A llSpc, R ange, A ll

Spc, R ange, A llGrade F in ish S ize

FormForm

***

Form Grade S izeForm Grade *Form Grade *Form * *Form Grade S izeForm Grade *Form Grade *Form * *

Grade

F in ishF in ish

**

F in ishF in ish

**

Calculating a Selling PriceCalculating a Selling Price

Price Basis...

Marked up based on Customer Pricing Level…

And marked up based on Quantity Bracket...

Equals … Selling Price!

Price Basis1 can be either Replacement Cost, Base Price, or Average Cost.

Price Basis

R epl.Cost

BasePrice

AveCost

M ETAL PR I CE BOOK

Custom er Pricing Levels

Q uantity Brackets

SELLI N G PR I CE

1

2

3

...

10

Level T ype

G

R ate

10

12

14

16

30

200

LBS Factor

400

800

...

99999

1.25

1.23

1.21

1.19

1.05

G

G

G

G

Customer Pricing Level Markup Customer Pricing Level Markup TypesTypes

Marked-up based on Customer Pricing Level...

Price Basis1 can be either Replacement Cost, Base Price, or Average Cost.

Price Basis

R epl.Cost

BasePrice

AveCost

M ETAL PR I CE BOOK

Custom er Pricing Levels

Q uantity Brackets

SELLI N G PR I CE

1

2

3

...

10

Level T ype

G

R ate

10

12

14

16

30

G

G

G

G

Add-on

Gross P rofit

M arkup

P rice

Q uantityBracket

P rice Basis + Add-on R ate

P rice Basis / (1 - Gross P rofit% )

P rice Basis x (1 + M arkup% )

GivenM ove up "x" num ber o f Q ty

Brackets from Q ty Bracket thatcorresponds to O rdered Q ty

Com putationM arkup Type

Price Basis

R epl.Cost

BasePrice

AveCost

M ETAL PR I CE BOOK

Custom er Pricing Levels

Q uantity Brackets

SELLI N G PR I CE

200

400

800

...

99999

1 .25

1 .23

1 .21

...

1 .05

LBS Factor

Add-on

Gross P rofit

M arkup

Factor

P lus Add-on R ate

D ivided by (1 - Gross P rofit % )

M u ltip lied by (1 + M arkup% )

M u ltip lied by Factor

Com putationM arkup Type

Quantity Bracket Markup TypesQuantity Bracket Markup Types

Marked up based on Quantity Bracket…

Equals … Selling Price!

Quantity Brackets ContinuedQuantity Brackets Continued

Variety of Units of Measure permitted• Lot, Units, Length, Area, or Weight • Based on Dimension Segregation

For example, Dimension Segregation “Length” can have Lot, Units, Length, or Weight, but not Area.

Alternate Unit of Measure• Used to promote Qty Bracket of Order Items that

would otherwise remain in lower Brackets

Alternate Unit of MeasureAlternate Unit of Measure

Provides greater discount for Customers that order a Quantity low in Weight, but high in Measure

Uses higher Bracket between that of Quantity Bracket UM & Alternate UM

Typically used for tube products, which would otherwise remain in lower Brackets

O rdered Q ty

LBS FT

200 1000

Q ty Bracket

LBS FT

100

200

400

600

1000

M ark- up R ate

1 .30

1 .25

1 .20

1 .15

1 .10

Factor

Qty Bracket usedbased on LBS

Qty Bracket usedbased on FT

Example - Alternate Unit of MeasureExample - Alternate Unit of Measure

Small diameter Product (Low Weight/Foot)• Promoted to higher Quantity Bracket based on Ordered

Measure.

Customer Pricing ProfileCustomer Pricing Profile

Specific pricing by Customer or generic for all Customers Base Selling Price on Replacement Cost, Base Price, or

Average Cost Vary pricing by Price Category Assign Pricing Level based on frequency of sale &/or

quantities sold• Optional override of Pricing Level by Product Line

Establish Aimed & Min. Profit %’s • Per Sales Type - As Is, Processed, Bought For, etc.

Contract Metal Price BooksContract Metal Price Books

Defined for Customer & Full Product Benefits of Contract Price

Various Units of Measure available for Contract Price (Pcs, Units, Lgth, Area, Wgt, etc.)

Ability to select Currency of Contract Price

Expiry Date & Next Contract Price provided

Selling Price = Contract Price marked up based on Quantity Bracket

Price Basis

R epl.Cost

BasePrice

AveCost

M etal Price Book

Custom er P ricing Levels

Q uantity Brackets

SELLI N G PR I CE

Contract Pricing

Contract Price

R ep l. Cost/ Base P rice

R ep l. Cost/ Base P rice

Average Cost

Average Cost

Y es

N o

Y es

N o

P rice Basis m arked up by M P B

P rice Basis m arked up by Cust. A im ed P ft %

M etal Cost m arked up by M P B

M etal Cost m arked up by Cust. A im ed P ft %

M etal Price Source M PB? Selling Price Calcu lation

BuyoutsBuyouts

Selling Price calculation depends on Customer’s Metal Price Source & whether or not MPB is defined.

Customer Aimed Profit % • From Customer Pricing Profile • One per Sales Type (Maximum of 6)

Example - Product Marketing FactorExample - Product Marketing Factor

Used to increase/decrease Replacement Cost/Base Price based on current market conditions

Valid for a date range

Price Basis

R epl.Cost

BasePrice

AveCost

M etal P rice Book

Custom er P ricing Levels

Q uantity Brackets

SELLI N G PR I CE

Product M ktgFactor

R ep l. Cost o r Base P rice:M aterial P rice Base w ith

Extras o r P roduct P rice Base

Example - Product Marketing FactorExample - Product Marketing Factor

Product M ktg Factor

Price Basis =M ateria l P rice Base + S ize Ex tra + D im ension Ex tra + Product M ktg Factor

Price Basis (based on R eplacm ent Cost)[15 .00 / CW T * (1 + 0 .19 ) ] + 1 .00 / CW T + (15 .00 / CW T * 0 .10 ) = 18 .85 / CW T

Price Basis based on Base Price =[17 .00 / CW T * (1 + 0 .21 ) ] + 1 .50 / CW T + (17 .00 / CW T * 0 .10 ) = 22 .07 / CW T

CA/ 36 / 3312 / 0 - 99999

10%

O rdered Product

M ateria l S ize D im ension

CA/ 36 3312 12 '

S ize Ex traM ateria l P riceBase

CA/ 36

R epl. Cost =15 / CW T

D im ension Ex tra

Base Price =17 / CW T

0-20' 1.00/ CW T 1.50/ CW T20.1-40'

40.1-999' 2.00/ CW T

1.50/ CW T

2.50/ CW T

2.00/ CW T

2214

22316

3314

331222516

2238

17%

21%20%

19%

18%

22%

15%

20%

19%18%

17%

16%

ResellersResellers

Quantity Discounts available for Customers that are Resellers

Provide a lower markup for Customers that need to add an additional markup when reselling material

Example Given

• Service center sells material to End User at 30% profit. Result

• Service center sells material to Reseller at 20% profit, allowing Reseller to make remaining 10% profit.

Material Price BaseMaterial Price Base

Presents complete picture of Material Repl. Cost & Base Price

Applies when Material-based Method is used Provides ability to add, review, modify, & delete existing

Material Price Base records • Changes to Size & Dimension Extra Rates permitted

Order Entry FeaturesOrder Entry Features

Price Violation Re-pricing Functions Gross-up Function

Price ViolationPrice Violation

Price Violation Types:

Book Price• Salesperson changes Book Price, & Selling Price <

Min Price Salesperson

• Selling vs. Book Price>Salesperson’s Allowed Price Variance %

Profit• Item Profit % < Minimum Allowed %

Warning issued to Salesperson Can be used to filter Inquiries & Reports

Re-pricing FunctionsRe-pricing Functions

Re-price Order or Item due to parameter changes Confirmation message provided to prevent accidental re-

pricing

Re-Price• Average & Replacement Costs recomputed• New Book Price computed• Other charges not impacted

Re-Price All• Average & Replacement Costs recomputed• New Book Price computed• Automated Processing Charges re-priced• Other charges not impacted

Pop-up Re-pricing FunctionPop-up Re-pricing Function

Automatically asks user to Re-price Metal, Re-price All, or leave as is when any of the following is changed:• Ordered Quantity• What else?

Gross-Up FunctionGross-Up Function

Used to increase Metal Price to Customer for piece of unusable metal remaining after processing is complete

Metal Price adjusted based on Dimensions of Product used to produce Dimensions of Product Sold

Sold Product CA/ 36 / 2214

D im ension 18 '

Q uantity 57 LBS (1 PCS)

So ld P roduct, D im , &Q uantity en tered ,

Selling P rice calcu lated

Grossed U p D im entered ,Grossed U p Q ty calcu lated

Grossed U p Value calcu lated

F inal Selling P rice calcu lated

Selling Price = 20 / CW T

G rossed U p D im ension = 20 ' G rossed U p Q ty = 64 LBS (1 PCS)

G rossed U p Value = Selling Price * G rossed U p Q ty= 20 / CW T * 64 LBS = $12 .80

Final Selling Price = G rossed U p Value / So ld Q uantity= $12 .80 / 57 LBS = $22 .45 / CW T