Buyer cost factors are response adjustments that occur when dealing with a particular supplier. Buyer cost factors account for negative (and positive) aspects inherent in dealing with a particular supplier. Such aspects could include the risk involved in dealing with a particular supplier because of supplier location, or possible supplier past performance. For example, a new and untried supplier (or new manufacturing or shipping location for an incumbent supplier) exposes the buying organization to a higher risk of supply disruption simply because the buying organization has no experience of buying from the new supplier or location. Buyer cost factors are used in transformational bidding/quoting.
To apply buyer cost factors to a supplier:
On the Create: Lines page, from the Cost Factors drop down menu, select either:
Buyer and Supplier - if you intend to define both supplier cost factors and buyer price factors for this negotiation line.
Buyer - if you intend to only define buyer cost factors for this line.
Supplier - if you intend to only define supplier cost factors for this line.
Also specify whether to display transformed responses to the suppliers. If you choose to display transformed responses, suppliers will see the modified response when they view their response history. If you choose Buyer & Supplier or Supplier cost factors, you must display transformed responses to suppliers. This is because it is not possible to display untransformed views when supplier have the ability to enter values for cost factors.
Continue defining your negotiation information.
Click the Suppliers link in the navigation bar in the upper left corner to specify supplier invitation information.
On the Create: Suppliers page, either apply an invitation list or search for and add the suppliers you wish to invite to this negotiation.
After building and applying your invitation list, and you are returned to the Create: Suppliers page, click the pencil icon under the Cost Factors column for the supplier to whom you wish to apply a cost factor.
On the Suppliers: Update Buyer Price Factor Values page, you see a table showing all the line items to which the invitee has access and a column for every buyer cost factor you defined earlier on the Create: Lines page (supplier cost factors do not appear on this page). For each line to which you wish to apply a buyer cost factor, enter the value by which you wish the adjustment to be made. Be sure to specify the pricing-basis used for the cost factor when determining what value to enter (the pricing basis defined for this cost factor is displayed in parenthesis in the column heading for each cost factor). If there is a large number of lines on the page, and you want the same value for a cost factor to apply to all lines, you may select the cost factor from the Cost list of values, enter the value in the Value field and click Update All Lines.
Note: If your negotiation is a large or very large negotiation, on the Update Buyer Cost Factors page, you do not see the lines defined to the negotiation. Instead you see a cumulative list of all buyer cost factors defined. Enter values for cost factors as appropriate, but be aware that any cost factor for which you provide values will be applied against every line for that supplier.
After you have specified values for all the buyer cost factors to be applied to this supplier, click Apply.
Continue entering buyer cost factor values to any remaining suppliers as appropriate.