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Re: Payment terms  how do you handle them?
David Morel Oct 17, 2012 8:39 AM (in response to James Lambert)1 of 1 people found this helpfulYou can include the impact of their payment terms via a total cost formula. The supplier can choose the payment term via a question in the event, the options for that question can be mapped to different impact values...say .95, .98, 1.0, 1.03, 1.05 and the impact included in the total cost. Then you can optimize to minimize cost.

Re: Payment terms  how do you handle them?
James Lambert Oct 29, 2012 4:53 AM (in response to David Morel)Thanks David  that's a great start. As a follow on, could you answer these addtional questions?
 To take account of working capital impact in any sourcing event, it will be necessary to always use the total cost RFP. Correct?
 Am I correct in thinking we can set up the baseline payment terms in each item (expressed in days) and then use a formula based on the numeric value for payment terms selected by a participating supplier in the event?
 Is it possible to separate the working capital impact from the year on year savings impact?
Thanks in advance for your additonal input!
