PeopleSoft Strategic Sourcing 9.1 PeopleBook

Optimizing Strategic Sourcing Event Awards

This chapter provides an overview of the optimization feature and discusses how to:

Select Strategic Sourcing events for optimization.
Run the Optimize Award process.
Review award recommendations.
View award recommendations by line.
Review the award constraint summary.
Compare award recommendations.

Understanding Strategic Sourcing Optimization

You can use the optimization engine to analyze bids online or by using the batch process—Sourcing Optimization process (AUC_OPT_AE)—by using specific business constraints. The optimization engine recommends an award allocation based on best price, total cost, or score. You can optimize all events or a specific line by using the online process or the batch process. The optimization process includes all event information such as constraints, bid factors, and costs.

The optimization engine recommends award allocations based on best score, price, or cost while factoring all the constraints. After the optimization engine makes a recommendation, you can:

Accept the recommended award.
Change the recommended award.
Change global constraints, and then rerun the optimization process.

You can still analyze bids and award events online by using the Analyze Events component.

Understanding Optimization Results

When you select an event for optimization, the system sends all price, score, and cost information to the optimization engine for each bid. Depending on whether you selected to optimize based on price, cost, or score, optimization calculates the best award allocation based on that selection, while factoring in any constraints that are associated with the event. The optimization engine gives priority to mandatory constraints and higher priority constraints when determining an ideal award allocation. If you optimize by best cost or best price and two or more bidders have the best bid, the optimization engine uses the best score to determine the award allocation. In cases in which the optimization engine cannot produce a recommendation without violating one or more mandatory constraints, a message appears on the Review Award Recommendation page. You can access the Review Award Constraint Summary page to view which mandatory constraints were violated.

You can save the optimization results so that you can compare multiple optimization runs to each other to determine the impact of any changes that you made to the constraints or bid factors.

Pages Used to Optimize Strategic Sourcing Events

Page Name	Definition Name	Navigation	Usage
Search For Event To Optimize	AUC_OPT_EVSRCH_SEC	Sourcing, Maintain Events, Optimize Awards Click the Select Event link.	Select specific sourcing event awards that you want to optimize.
Optimize Awards	AUC_OPT_RUN_BATCH	Sourcing, Maintain Events, Optimize Awards, Optimize Awards	Optimize several sourcing event awards at one time.
Review Award Recommendation	AUC_AWARD_RMD_PG	Sourcing, Maintain Events, Review Optimization, Review Award Recommendation	View award recommendations after running the optimization process. Note. This page is available only if you selected the Use Optimization Engine to Recommend Award check box on the Strategic Sourcing Installation Options page.
Award Recommendation Results (by Bidder)	AUC_OPT_BID_LN_SEC	Click the Total Award Price link for the selected bidder on the Review Award Recommendation page.	View the awarded lines for the selected bidder.
Event Constraint Limit (by Line)	AUC_OPT_CNT_LMT_S2	Click the Yes link on the Award Recommendation Results (by Bidder) page.	View the constraints that limited the award for the selected line.
Award Recommendation Results	AUC_OPT_LN_SEC	Click the View Recommendations by Line link on the Review Award Recommendation page.	View recommendations for each line item.
Review Award Constraint Summary	AUC_OPT_CST_SEC	Click the View Award Constraint Summary link on the Review Award Recommendation page.	View the constraints associated with the sourcing event and for each line.
Event Constraint Limit	AUC_OPT_CNT_LMT_SE	Click the Yes link in the Event Constraint Limit column on the Review Award Recommendation page.	View the event-level constraints for the selected bidder.
Compare Award Recommendation	AUC_OPT_CMPREC_SEC	Click the Compare Award Recommendation link on the Review Award Recommendation page.	Compare award recommendations.

Selecting Strategic Sourcing Events for Optimization

Access the Search For Event To Optimize page (Sourcing, Maintain Events, Optimize Awards, and click the Select Event link).

Business Unit, Event ID, Event Type, Entered By, and Event Name

(Optional) Select a value for any of these fields to further narrow the search criteria.

Search

Click this button to retrieve sourcing events that meet the selection criteria.

Click Run when you have finished selecting the search criteria. The system sends all the required event and bid information and the constraints associated with the event to the optimization engine.

After the optimization process has finished, the system updates the event with the recommended results. You can review the recommendation by using the Analyze Events component (Sourcing, Maintain Events, Analyze Events).

Note. Only the event data for the active round and most current version of the event or line is used during the optimization process.

Running the Optimize Award Process

Access the Optimize Awards page (Sourcing, Maintain Events, Optimize Awards, Optimize Awards).

Business Unit

Select a single Strategic Sourcing business unit or a range of business units. All events that have a status of Posted and have ended or are in a Pending Award status will be optimized for the selected business units.

Entered By

(Optional) Select the individual to identify which events to optimize. Only those users who have created sourcing events are available for selection.

Event ID

Select an event that you want to optimize. Only events with a status of Pending Award or Posted and have ended are available for selection.

Select Event

Click this link to access the Search For Event To Optimize page.

Line Number

Select the line that you want to optimize. Leave this field blank if you want to optimize the entire event.

Based On

Select a value to indicate on what basis you want the bid to be analyzed using all event constraints:

Cost: If you are optimizing an entire event, then the optimization engine recommends an award based on the cost for each line of the event.

If you are optimizing a specific line, then only the costs associated with that line are used. Optimization recommends an award based on the lowest cost.

Price: If you are optimizing an entire event, then the optimization engine recommends an award based on the price for each line of the event.

If you are optimizing a specific line, then only the price associated with that specific line is used. Optimization recommends an award based on the lowest price.

Score: If you are optimizing an entire event, then the optimization engine recommends an award based on the score for each line of the event.

If you are optimizing a specific line, then only the score associated with that specific line is used. Optimization recommends an award based on the highest score.

Reviewing Award Recommendations

Access the Review Award Recommendation page (Sourcing, Maintain Events, Analyze Events, Review Optimization).

Award Recommendation Results

Name and Description	Enter the name and (optional) description of the optimization results.
Analytic Inst (analytic instance)	A display-only system-generated field that identifies the process instance.
Total Award Cost	A display-only field that indicates the total award amount of the optimization instance.
Optimization Based On	A display-only field that indicates the basis used for the optimization instance. The value comes from the Optimize Awards page.
Bidder Name	The name of the bidder selected for the award.
Bid ID	The bid ID selected for the award.
Total Awarded Price	Click a price link to view the individual line items that are included in this total for each awarded bidder.
Event Constraint Limit	Indicates whether one or more constraints affected the award for the bidder. The values are Yes and No. For example, if a constraint were associated with the event that limited the amount of the award to bidders who had a low credit score, then the field would display Yes if the bidder would have been awarded more if the constraint did not exist. Click the Yes link to view the specific constraints that affected the award.
Accept Recommendation	Click to accept the recommendation without making any changes. After you click this button, the recommended award quantities are supplied on the Analyze Total and Analyze Line pages for each of the bidders. Access the Award Details page so that you can post the awards.
View Recommendation	Select a specific optimization run that you want to view.

Viewing Award Recommendations by Line

Access the Award Recommendation Results page (click the View Recommendations by Line link on the Review Award Recommendation page).

Accept

Click to accept each award recommendation for each line. Use this option if you do not intend to accept the entire event award recommendation.

Reviewing the Award Constraint Summary

Access the Review Award Constraint Summary page (click the View Award Constraint Summary link on the Review Award Recommendation page).

View the constraints associated with the sourcing event and for each line.

Sourcing Objective	Displays whether the sourcing objective has a Target or a Mandatory goal. The optimization engine tries to meet all mandatory constraints before attempting to meet target objectives.
Progress to Date	Displays the progress to date for the award.
Recommendation Result	Displays the result of the award recommendation as it applies to the specific event.
Calculate	Click to calculate the costs for each line. When you click this button, the optimization engine is rerun without the selected constraint to determine the cost. The difference between the award price with the constraint and the one without the constraint is the cost of the constraint.
Cost of Constraint	Click the Calculate button to have the system populate this field to display the costs of each line.

Comparing Award Recommendations

Access the Compare Award Recommendation page (click the Compare Award Recommendation link on the Review Award Recommendation page).

Step 1. Select the recommendations to compare.

Select	Select the check box for each recommendation that you want to compare. You can compare up to four different award recommendations at one time.
Recommendation Name	User-defined values that are available for selection depend upon the name of the optimization results.

Step 2. Select whether to compare the entire event or line within the event.

Line Number

(Optional) Select a specific line number to use in the comparison. Leave this field blank if you want to compare the optimization results for the entire event.

Note. You can compare one line at a time or the entire event.

Compare

Click to compare the optimization results.

Accept Award

Click to accept the award recommendation for the selected recommendation.

Business Unit, Event ID, Event Type, Entered By, and Event Name	(Optional) Select a value for any of these fields to further narrow the search criteria.
Search	Click this button to retrieve sourcing events that meet the selection criteria.

Business Unit	Select a single Strategic Sourcing business unit or a range of business units. All events that have a status of Posted and have ended or are in a Pending Award status will be optimized for the selected business units.
Entered By	(Optional) Select the individual to identify which events to optimize. Only those users who have created sourcing events are available for selection.
Event ID	Select an event that you want to optimize. Only events with a status of Pending Award or Posted and have ended are available for selection.
Select Event	Click this link to access the Search For Event To Optimize page.
Line Number	Select the line that you want to optimize. Leave this field blank if you want to optimize the entire event.
Based On	Select a value to indicate on what basis you want the bid to be analyzed using all event constraints: Cost: If you are optimizing an entire event, then the optimization engine recommends an award based on the cost for each line of the event. If you are optimizing a specific line, then only the costs associated with that line are used. Optimization recommends an award based on the lowest cost. Price: If you are optimizing an entire event, then the optimization engine recommends an award based on the price for each line of the event. If you are optimizing a specific line, then only the price associated with that specific line is used. Optimization recommends an award based on the lowest price. Score: If you are optimizing an entire event, then the optimization engine recommends an award based on the score for each line of the event. If you are optimizing a specific line, then only the score associated with that specific line is used. Optimization recommends an award based on the highest score.