Apply Internal Cost Factors

In the Setup and Maintenance work area, do these tasks:

Go to the Manage Negotiation Styles task, create a negotiation style and enable the internal cost factor for line price and response amount, and the overall rank.

This table contains various combinations of negotiation style configurations and response rules, and their outcomes.

When This Negotiation Style Configuration Is Selected	When These Response Rules Are Selected in The Create Negotiation Overview Page	Outcomes
Internal Cost Factors Response Amount Line Price Overall Rank	Response rules to display transformed amount and ranks to suppliers aren't selected.	Internal Cost is applied to both the response amount and line price. However, transformed prices and ranks aren't displayed to suppliers. Buyer see transformed prices and ranks at the line level, transformed amount and overall rank at the response level, and award accordingly.
Internal Cost Factor Line Price Overall Rank	Response rules to display transformed amount and ranks to suppliers aren't selected.	Internal cost is applied to line price only. However, transformed prices and ranks aren't displayed to suppliers. Buyer sees transformed prices and ranks at the line level, transformed amount and overall rank at the response level, and award accordingly.
Internal Cost Factor Response Amount Overall Rank	Display transformed amount to suppliers Display transformed overall rank to suppliers	Internal cost is applied to the response amount only. Suppliers compete with each other based on transformed response amount and overall rank. Buyers analyze and award based on the transformed response amount and overall rank of suppliers.
Internal Cost Factor Line Price Overall Rank	Display transformed amount to suppliers Display transformed line ranks to suppliers Display transformed overall rank to suppliers	Internal cost is applied to the line price only. Suppliers see transformed price, transformed line rank, and transformed overall rank. Therefore, they compete with each other based on transformed price, transformed line rank, and transformed overall rank. Buyers analyze and award individual negotiation lines based on the transformed price and transformed line rank of suppliers. Buyers also consider the transformed overall rank of suppliers; If a supplier is trailing in a negotiation line but leading in majority of lines and therefore has a better overall rank, buyer may still choose to award to this supplier.
Internal Cost Factors Line Price Overall Rank	Display transformed line ranks to suppliers Display transformed overall rank to suppliers	Internal cost is applied to the line price only. Suppliers don't see transformed amounts but can see the transformed ranks. Therefore, they compete with each other based on transformed line and overall rank. Buyers analyze and award individual negotiation lines based on the transformed price and transformed line rank of suppliers. Buyers also consider the transformed overall rank of suppliers; If a supplier is trailing in a negotiation line but leading in majority of lines and therefore has a better overall rank, buyer may still choose to award to this supplier.
Internal Cost Factors Response Amount Line Price Overall Rank	Display transformed amount to suppliers Display transformed line ranks to suppliers Display transformed overall rank to suppliers	Internal cost is applied to the line price only. Suppliers see transformed price, transformed line rank, and transformed overall rank. Therefore, they compete with each other based on transformed price, transformed line rank, and transformed overall rank. Buyers analyze and award individual negotiation lines based on the transformed price and transformed line rank of suppliers. Buyers also consider the transformed overall rank of suppliers; if a supplier is trailing in a negotiation line but leading in overall rank due to lower total internal cost at the response level, buyer may still choose to award to this supplier.

In the Negotiations work area, create an auction and set the response rules, transformed amount to suppliers, transformed line rank to suppliers, and transformed overall rank to suppliers.

See table in the preceding step for more details on response rules and the outcomes.

To add the internal cost factors, go to the Suppliers train stop and in the Edit Negotiation page, click Actions > Apply Internal Cost Factors.

In the Apply Internal Cost Factors page, depending on the selection in the negotiation style, response or lines tabs are visible.

Add cost factors to the response amount or line price from the Add Cost Factors page in the respective tabs.

If you're using a negotiation template in which the internal cost factors are already added, then you will automatically see the internal cost factors. However, in the Add Cost Factors page, you can add, delete or update the internal cost factors.

After you add the cost factors, you can set their values for suppliers in the Apply Internal Cost Factors page.

Publish the auction.