Sourcing -- Total Cost Formulas

Tuesday, March 15, 2011

11:30am EST



       Please join The Customer Success Team and Andras Varadi, Ariba Solution Consultant, as we present Total Cost Formulas. Total cost modeling is a way of accounting for the costs of a bid that are in addition to the bid’s simple price. Total cost lets buyers or category managers include all the factors they need to assess and compare the total cost of ownership of the goods and services that they source.


A     Request for Proposal with Total Cost is used to qualify suppliers or collect pricing information. You can add cost factors such as taxes or shipping costs and calculate the total cost for each supplier. You can score each supplier and decide whether they can see one another’s responses.


Being able to see the cost components and total cost is a key factor when comparing suppliers. Total cost applies to a broad range of cases, including the following:

  • Total system cost
  • Fixed-plus-variable cost
  • Switching Cost


By breaking out the cost components and examining them under different scenarios, total cost helps identify new opportunities for sourcing savings. Ariba Sourcing defines total cost as the addition of multiple cost components for an item. Each cost component consists of individual cost items (or terms), combined arithmetically, which are then applied to the line items in your auction.


Future Lunch 'N Learns

Tuesday, April 5, 2011 11:30 am Sourcing Pro - Tiered Pricing

Wed., May 11, 2011 12:00pm EST  Contract Management: Microsoft Word Doc Cleansing


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