In this week's Ariba Knowledge Nugget, we will look at advanced pricing events, in particular Matrix Pricing. Advanced Pricing is a way to acquire more detailed price information when pricing depends on specific factors. When advanced pricing is set up, suppliers' bids may include multiple prices for the same item, depending on the factors defined by the buyer. There are two types of advanced pricing:
1. Tiered Pricing - used when price depends on purchasing volume
2. Matrix Pricing - used when price depends on a factor other than quantity, such as delivery date, or geographical location
These 2 Pricing structures provide a natural way for suppliers to express their pricing terms to buyers for complex sourcing events, allowing for different prices based on volume discounts and attributes. For either of these types of advanced pricing, suppliers are asked to respond with multiple prices for each line item corresponding to different requirements or conditions. Advanced Pricing is supported in the RFX types that collect pricing information, RFP, RFQ and Negotiation.