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Scenarios for System-Calculated Revenue Allocations

This topic gives the following examples of how system-calculated revenue allocations might be used. You might use system-calculated revenue allocations differently, depending on your business model.

This topic contains the following topics:

• Calculating Allocations for a Two-Item Package
• Calculating Allocations for a Two-Item Package with Discounted Price
• Calculating Allocations for a Three-Item Package with Menu Per Person
• Calculating Allocations for a Package Within a Package

Calculating Allocations for a Two-Item Package

A sales representative enters a basic package containing two items. Table 16 shows an example of how Siebel Hospitality might calculate revenue allocations for this type of package. Each item in the table has a quantity of 1.

Siebel Hospitality determines the revenue contribution percentage of each item from the list price of the item. The list price of an item divided by the total of the item list prices equals the contribution percentage of that item. Multiply this contribution percentage by the unit net price of the package to determine how much that item contributes to the price of the package.

Calculating Allocations for a Two-Item Package with Discounted Price

A sales representative enters a basic package containing two items. This package has a discounted price. Table 17 shows an example of how Siebel Hospitality might calculate revenue allocations for this type of package. This scenario is similar to Calculating Allocations for a Two-Item Package, except that the customer has negotiated a lower price. Each item in the table has a quantity of 1.

Siebel Hospitality determines the revenue contribution percentage of each item from the list price of the item. The list price of an item divided by the total of the item list prices equals the contribution percentage of that item. Multiply this contribution percentage by the unit net price of the package to determine how much that item contributes to the price of the package.

Calculating Allocations for a Three-Item Package with Menu Per Person

A sales representative enters a basic package that includes a menu per person as a line item. Table 18 shows an example of how Siebel Hospitality might calculate revenue allocations for this type of package. Each item in the table has a quantity of 1.

The contribution percentage for the menu per person is based on the list price of the menu per person. (However, if the menu per person is a split menu, Siebel Hospitality ignores it and does not include it in any calculations.)

Calculating Allocations for a Package Within a Package

A sales representative enters a package within a package. Table 19 shows an example of how Siebel Hospitality might calculate revenue allocations for this type of package. Each item in the table has a quantity of 1.

To calculate the contribution percentages of the items in the child package, Siebel Hospitality first calculates the contribution percentage of the child package. Siebel Hospitality then calculates the contribution percentages of the child line items of the package to the contribution percentage of the child package. A breakdown of the calculation steps follows.

1. The price of Package Per Person 1 is 50.
2. This 50 is made up of Event Order Item and Package Per Person 2.
3. The per person allocation for Event Order Item out of the 50 is 22.22.
4. This leaves 27.78 of the 50 for Package Per Person 2.
5. Siebel Hospitality now determines how to allocate the 27.78 to the items in Package Per Person 2.
6. Siebel Hospitality determines the contribution percentage of Menu Item 1 and Menu Per Person within Package Per Person 2.
7. The contribution percentage of Menu Item 1 equals ((20/(20+18)).
8. The contribution percentage of the Menu Per Person equals (18/(20+18)).
9. The contribution percentages of Menu Item 1 and Menu Per Person, multiplied by 27.78, determine how much of the 27.78 to allocate to each of the respective line items.

NOTE:  If another level of a package within a package exists, Siebel Hospitality follows the same iterative process to determine the per person allocations for that package.