4 Replies Latest reply on Aug 20, 2012 8:04 AM by Tim Fabiniak

    Difference between RFP with Price Breakdown and RFP With Total Cost

    Katherine Chan Newbie

      I am creating an RFP where the supplier will be able to enter the breakdown of their Product cost (e.g. Material price, Freight, Tax, Admin fee, etc.). I find that the options of "RFP with Price Breakdown" and "RFP with Total Cost" could be used, but I am confused as to how they are different? When do we use one, and when do we use the other?

        • Re: Difference between RFP with Price Breakdown and RFP With Total Cost
          Tim Fabiniak Master

          I'd say it this way...

           

          RFP With Total Cost lets you collect an item price and also the prices of additional costs that are external to that item: taxes, freight, shipping, inventory, etc. Price plus those other factors gives you a final total cost (on which the suppliers are competing.)

           

          RFP With Price Breakdown lets you compute an item price based on the price of terms. The supplier does not supply a price, instead the supply the value for terms which will give a final item price based on a formula. The extra pricing terms are internal to that item: they are the component costs to build it.

           

          Total Cost: Price + Terms

          Price Breakdown: Price = Terms

           

          I hope that helps!

          • Re: Difference between RFP with Price Breakdown and RFP With Total Cost
            Greg Gardner Newbie

            Building on the details Tim pointed out, one of the most significant distinctions between the Total Cost and Price Breakdown processes is that all the elements of the Price Breakdown are visible to and editable by the supplier, whereas the components of the Total Cost formulas may not be: things like switching costs that you add to (or otherwise use to affect) the bid price to arrive at the Total Cost may not be editable by, or even visible to, the supplier.

              • Re: Difference between RFP with Price Breakdown and RFP With Total Cost
                Sagar Varolia Novice

                Hi Greg and Tim,

                 

                Based on your inputs i created a total cost RFP  with three line items, i added few more new terms ( Installation Cost and Maintenance Cost) to each line item and created total cost formual.

                 

                Total Cost = (Price + Installation Cost ) * Qty + Maintenance Cost

                Extended Price = Price * Qty

                 

                For every line item it works perfectly fine, but when i look at the total cost for all three line items together, ariba system adds only extended price of each line item without considering cost of new terms ( Installation Cost and Maintenance Cost).

                 

                Can you please help me to resolve this problem ??

                 

                Many Thanks,

                Sagar