Average Price Validation Using Floor and Ceil Limits

Until now, the system ensured that the relationship manager, division level or deal level approver, and price item manager could approve the average price of a price item in a deal when it is within the absolute floor and ceil limits of the respective To Do role. Now, in addition, the system provides the following features:

  • Validate Average Price Using Spread Amount or Spread Percentage

  • Validate Average Price Against Eligible Price List Pricing

On simulating the deal, the system checks whether the Price Item Approval Required field is set to Yes in the respective deal type. If the Price Item Approval Required field is set to Yes, the system derives the eligible price lists for the customer using the division, customer segment, and customer tier attributes. If one or more eligible price lists exist for the customer, the system checks whether a price assignment for the price item exists in any of the eligible price list. If the price assignment exists for the price item in an eligible price list, the system checks whether the Average Price Floor and Ceil Limits field in the price assignment is set to Absolute Value Range, Spread Amount, or Spread Percentage. The system does the following depending on the value specified in the Average Price Floor and Ceil Limits field:

  • Absolute Value Range - If the Average Price Floor and Ceil Limits field in the price assignment is set to Absolute Value Range, the system checks whether the average price of the price item in the deal is within the floor and ceil limits of the relationship manager's To Do role. If the pricing currency is different from the floor and ceil currency, the system does the currency conversion. If the average price of the price item in the deal is within the absolute floor and ceil limits, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the absolute floor and ceil limits, the status of the price item remains as Pending for Approval.

  • Spread Amount - If the Average Price Floor and Ceil Limits field in the price assignment is set to Spread Amount, the system calculates the average price of the price assignment. If a flat pricing is defined in the price assignment, the system sets the average price to the flat rate. However, if a tiered pricing is defined in the price assignment, the system calculates the average price using the following formula:

    Average Price = Price Item Revenue/Price Item Commitments

    The system then considers the spread amount specified for the relationship manager's To Do role in the price assignment. Using the spread amount and average price, the system calculates the average price floor and ceil values. The system then checks whether the average price of the price item in the deal is within the derived average price floor and ceil limits. If so, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the derived average price floor and ceil limits, the status of the price item remains as Pending for Approval.

  • Spread Percentage - If the Average Price Floor and Ceil Limits field in the price assignment is set to Spread Percentage, the system calculates the average price of the price assignment. If a flat pricing is defined in the price assignment, the system sets the average price to the flat rate. However, if a tiered pricing is defined in the price assignment, the system calculates the average price using the following formula:

    Average Price = Price Item Revenue/Price Item Commitments

    The system then considers the spread parentage specified for the relationship manager's To Do role in the price assignment. Using the spread percentage and average price, the system calculates the average price floor and ceil values. The system then checks whether the average price of the price item in the deal is within the derived average price floor and ceil limits. If so, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the derived average price floor and ceil limits, the status of the price item remains as Pending for Approval.

If the absolute floor and ceil limits, spread amount, or spread percentage is not defined for the To Do role in the price assignment, the system checks whether the Average Price Floor and Ceil Limits field in the price item is set to Absolute Value Range, Spread Amount, or Spread Percentage. The system does the following depending on the value specified in the Average Price Floor and Ceil Limits field:

  • Absolute Value Range - If the Average Price Floor and Ceil Limits field in the price item is set to Absolute Value Range, the system checks whether the average price of the price item in the deal is within the floor and ceil limits of the relationship manager's To Do role. If the pricing currency is different from the floor and ceil currency, the system does the currency conversion. If the average price of the price item in the deal is within the absolute floor and ceil limits, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the absolute floor and ceil limits, the status of the price item remains as Pending for Approval.

  • Spread Amount - If the Average Price Floor and Ceil Limits field in the price item is set to Spread Amount, the system calculates the average price of the price assignment. If a flat pricing is defined in the price assignment, the system sets the average price to the flat rate. However, if a tiered pricing is defined in the price assignment, the system calculates the average price using the following formula:

    Average Price = Price Item Revenue/Price Item Commitments

    The system then considers the spread amount specified for the relationship manager's To Do role in the price item. Using the spread amount and average price, the system calculates the average price floor and ceil values. The system then checks whether the average price of the price item in the deal is within the derived average price floor and ceil limits. If so, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the derived average price floor and ceil limits, the status of the price item remains as Pending for Approval.

  • Spread Percentage - If the Average Price Floor and Ceil Limits field in the price item is set to Spread Percentage, the system calculates the average price of the price assignment. If a flat pricing is defined in the price assignment, the system sets the average price to the flat rate. However, if a tiered pricing is defined in the price assignment, the system calculates the average price using the following formula:

    Average Price = Price Item Revenue/Price Item Commitments

    The system then considers the spread parentage specified for the relationship manager's To Do role in the price item. Using the spread percentage and average price, the system calculates the average price floor and ceil values. The system then checks whether the average price of the price item in the deal is within the derived average price floor and ceil limits. If so, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the derived average price floor and ceil limits, the status of the price item remains as Pending for Approval.

However, if the absolute floor and ceil limits, spread amount, or spread percentage is not defined for the To Do role in the price item, the system changes the status of the price item to Error. If the system could not derive a price assignment for the price item from any of the eligible price list, the system checks whether the Average Price Floor and Ceil Limits field in the price item is set to Absolute Value Range, Spread Amount, or Spread Percentage. If the Average Price Floor and Ceil Limits field in the price item is set to Absolute Value Range, the system validates the average price of the price item in the deal using the absolute floor and ceil values of the respective To Do role. But, if the Average Price Floor and Ceil Limits field in the price item is set to Spread Amount or Spread Percentage, the system changes the status of the price item to Error.

Similarly, the system validates the average price of a price item when the product level approver, division level approver, deal level approver, or price item manager approves the price item in a deal.