Ratio Bundle
In case of a ratio bundle, pricing is not defined at the bundle level. Instead, pricing is defined separately for each price item in the bundle.
A ratio expresses the magnitude of quantities relative to each other. It has two factors — Numerator and Denominator. For ratio bundle, the ratio of price item quantities is used to determine the rate for volume based pricing. To determine within which range of ratio limit does the price item utilization falls, the ratio of price item quantities is used. Once the range limits are determined, the rate specified for that range is applied to the quantity of the price item used. Let us understand this with the help of an example.
Bundle X, which is a ratio bundle, contains the following price items:
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Price Item A — It has been added to the bundle using the price item relationship type as Numerator. It has the following tiered pricing defined in the system:
Quantity Range Rate ($) per unit 0 – 0.6 4 0.6 – 0.9 3 0.9+ 2 -
Price Item B — It has been added to the bundle using the price item relationship type as Numerator. It has the following tiered pricing defined in the system:
Quantity Range Rate ($) per unit 0 – 0.6 5 0.6 – 0.9 4 0.9+ 3 -
Price Item C — It has been added to the bundle using the price item relationship type as Denominator. It has the following tiered pricing defined in the system:
Quantity Range Rate ($) per unit 0 – 0.6 3 0.6 – 0.9 2 0.9+ 1
Now, when the user consumes 500 units of Price Item A, 2500 units of Price Item B, and 4000 units of Price Item C, the system calculates the ratio of price item quantities (i.e. (500+2500)/4000=0.75). Once the ratio is calculated, the system determines the range of each price item within which the ratio (i.e. 0.75) falls. In this case, the ratio falls in the 0.6 – 0.9 range of Price Item A, B, and C. Therefore, the system uses $3, $4, and $2, respectively, as the rate for calculating charges (i.e. ((500*3)=1500, (2500*4)=10000, and (4000*2)=8000).
If the multi parameter based pricing feature is enabled, you can determine the price item utilization in a ratio bundle based on multiple parameters. For example:
Bundle X | Country | Currency |
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Price Item A | US | USD |
Price Item B | Germany | USD |
Price Item C | England | USD |
Price Item A, Price Item B, and Price Item C are added in Bundle X. Price Item A, Price Item B, and Price Item C utilization in Bundle X is determined based on two parameters — Country and Currency. Before you add price item to a ratio bundle, you need to define these parameters in the system. Once you define these parameters, you need to associate them to the price items (i.e. Price Item A, Price Item B, and Price Item C) and then add these price items to the bundle (i.e. Bundle X).
While adding Price Item A to Bundle X, you need to set the following price item parameters:
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Country — US
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Currency — USD
Similarly, you need to add Price Item B to Bundle X with Country set to Germany and Currency set to USD, and Price Item C with Country set to England and Currency set to USD.
The following table lists the tiered pricing defined for Price Item A:
Tier Sequence | Rate | Tiering Criteria | Price Item | Price Item Parameters | From | To |
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10 | 5 | Number of Transactions | Bundle X | 0 | 1.75 | |
20 | 4 | Number of Transactions | Bundle X | 1.75 | 2.50 | |
30 | 3 | Number of Transactions | Bundle X | 2.50 |
The following table lists the tiered pricing defined for Price Item B:
Tier Sequence | Rate | Tiering Criteria | Price Item | Price Item Parameters | From | To |
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10 | 5 | Number of Transactions | Bundle X | 0 | 3.5 | |
20 | 4 | Number of Transactions | Bundle X | 3.5 |
The following table lists the tiered pricing defined for Price Item C:
Tier Sequence | Rate | Tiering Criteria | Price Item | Price Item Parameters | From | To |
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10 | 2 | Number of Transactions | Bundle X | 0 | 2.0 | |
20 | 1 | Number of Transactions | Bundle X | 2.0 |
Now, when the user performs 5000 transactions (in USD) of Price Item A in US, 6000 transactions (in USD) of Price Item B in Germany, and 5000 transactions (in USD) of Price Item C in England, the system creates three billable charges — one for each price item (i.e. Price Item A, Price Item B, and Price Item C). The system calculates the ratio of transactions with the following combinations and then determines the range of each price item within which the ratio (i.e. 2.2) falls:
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Price Item A, US, USD
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Price Item B, Germany, USD
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Price Item C, England, USD
In this case, the ratio falls in the 1.75 – 2.50 range of Price Item A, the 0 – 3.5 range of Price Item B, and in the 2.0 — Infinite range of Price Item C. Therefore, the system uses $4, $5, and $1 as the rate for calculating charges (i.e. (5000*4)=20000 , (6000*5)=30000 , and (5000*1)=5000).
You can also add a price item more than once in a ratio bundle with different set of parameters. For example:
Bundle X | Relationship Type | Country | Currency |
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Price Item A | Numerator | US | USD |
Price Item A | Numerator | England | USD |
Price Item B | Numerator | Germany | USD |
Price Item C | Denominator | England | USD |
Price Item C | Denominator | US | USD |
In this case, the system calculates the ratio of transactions with the following combinations and then determines the range of each price item (i.e. Price Item A, Price Item B, and Price Item C) within which the ratio falls:
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Price Item A, US, USD
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Price Item A, England, USD
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Price Item B, Germany, USD
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Price Item C, England, USD
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Price Item C, US, USD