Glossary TP

1.1. GBU Settings

• a GBU can specify unique set of settings to configure the Transactional Pricing Tool to their needs
• for a GBU Settings and description, see GBU Settings Matrix

1.2. Transaction

• raw sales data provided by the GBU in a specific format
• data contains details about Customers, Products, Revenue and Costs
• for format details, see the Transaction Data Template

1.3. Cost of Goods Sold (CoGS)

• direct costs attributable to the production of the goods sold
• includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good
• a specific field in the Transactions that is aggregated for a Data Point
• this is typically a negative value

1.4. Logistics Cost/Transportation Costs

• direct costs not attributable to the production of the goods sold
• include expenses such as distribution costs
• a specific field in the Transactions that is aggregated for a Data Point
• this is typically a negative value

1.5. Contribution Margin (CM)

• a measure used to determine the profitability of individual products based on its operating costs at a specific price

• CM, Revenue, CoGS and Logistics Costs share the same unit of measure, for example:
  • to calculate CM $, Revenue, CoGS and Logistic Costs are measured in $
  • to calculate CM $/Kg, Revenue (or rather Price), CoGS and Logistic Costs are measured in $/Kg

1.6. Ex Works (EXW)

• a measure used to determine the price and/or revenue of individual products without factoring the logistics costs
• this can occur in situations where the buyer incurs logistics costs

• EXW, Revenue and Logistics Costs share the same unit of measure, for example:
  • to calculate EXW $, Revenue and Logistic Costs are measured in $
  • to calculate EXW $/Kg, Revenue (or rather Price) and Logistic Costs are measured in $/Kg

1.7. Round

• a collection of Data Points, Segments and Commitments over a time range
• contains generic details about the Data Points, Segments and Commitments

1.8. Data Points

• an aggregation of Transactions on the Material Code, Sold-To Code and Country
• also known as a Customer Product combination for a Round
• Transactions are aggregated over a time range specified by the Start and End Date of the Round, and can be filtered by the Region and BU

1.9. Mapping Key

• an instance of a Material Code, Sold-To Code and Country; e.g. 43225-97114-BELGIUM
• each Data Point and Commitment has a Mapping Key

1.10. Segment

• a collection of Data Points grouped by one or many Dimensions

1.11. Dimension

• common fields across GBUs that can be used to group Data Points
• there are specific Dimensions that can be used to group Data Points into Segments in the Segment Generation Phase
• two types: Tracked and Untracked Dimensions

1.11.1. Tracked Dimension

• commonly used in Segment Generation
• when the Round is used as a Reference, Reference Mappings are also applied to the new Round
• field name typically ends with “SP” and have their original value without; e.g. Market and Market SP
• List of Tracked Dimensions:
  • Market SP
  • Product SP
  • Region SP
  • End Use SP
  • Sub Activity SP

1.11.2. Untracked Dimension

• NOT commonly used in Segment Generation, mainly used as a high-level grouping
• when the Round is used as a Reference, Reference Mappings are NOT applied to the new Round
• original values are NOT available to the user if overwritten
• values are updated to the latest value available in a Round
  • For example, a Customer-Product-Country belongs to Product Family “A” in Q1 but is moved to Product Family “B” in Q2
    • If a Round is created for only Q1, this Customer-Product-Country’s Product Family is “A”.
    • If a Round is created for Q1-Q2, this Customer-Product-Country’s Product Family is “B”.
• List of Untracked Dimensions:
  • BU
  • Product Family
  • Sold-To Name

1.12. Mapping

• the instance of a reassignment of a Tracked Dimension value to a new value for a Mapping Key
• For example:

1.13. Global Mappings

• a collection of Mappings from multiple Rounds that have reached the Impact Tracking Phase
• these Mappings are always applied during the creation of any new Round
• when a Round is prompted to the Impact Tracking Phase, all Reference Mappings are saved to the Global Mappings
• any existing Mapping Keys in the Global Mappings are overridden by the Mappings in the Round

1.14. Reference Mappings

• a collection of Mappings for a specific Reference Round
• these Mappings are applied after the Global Mappings during the creation of a new Round that has specified a Reference Round; this means that the Reference Mappings will overwrite the Global Mappings if there are any overlapping

1.15. Reference Round

• a specified Round in Round creation where Segments and Reference Mappings from the Reference Round can be applied to the Round being created

1.16. Scatter Plot

• the visual representation of a Segment’s Data Points as Dots on a bubble chart with Tier and Rock Bottom calculations

1.17. Dot

• an aggregation of a Segment’s Data Points on the Sold-To Name and Color On Dimension if applicable
• represents group of customers who should be considered as one entity for analysis; for example, a company with many subsidiaries
• one-to-many relationship with Data Points
• Tier and Rock Bottom calculations are based on Dots

1.18. Tier

• a collection of Dots in the Scatter Plot determined by the percentage of total Volume
• visually represented on the Scatter Plot as the area between the black vertical lines
• from left to right on the Scatter Plot, the Tiers are in descending order if applicable; for example, Tier 3, Tier 2 and Tier 1 denotes the area of the Tiers on the Scatter Plot
• more details in Scatter Plot section

1.19. Scatter Plot Settings

• a set of configurations in the Scatter Plot for a specific Segment that allow to the user to customize visuals and calculations
• changes can only be made in the Segment Generation and Target Setting Phases
• accessible via the options button as indicated by #1 in Figure 10

1.19.1. Visual Settings

• Whale Mode
  • On: Segment’s Data Points as Dots are graphed as a Whale Curve
  • Off: Segment’s Data Points as Dots are graphed as a Scatter Plot
  • Default: Off
• Uniform Bubble Size
  • On: all Dots are the same size
  • Off: each Dot is scaled to the Z-axis value relative the maximum Z-axis value
  • Default: On
• Label Selection Mode
  • On: each Dot selected will toggle a label displaying the Dimension values the Dot is aggregated on
  • Off: selected Dot will filter in the downstream components if applicable
  • Default: Off

1.19.2. Calculation Settings

• Split/Merge On
  • Dimension that will be used for Split and Merge
  • Default: First available Dimension of the Segment
  • more details in the Split and Merge section
• Y-Axis Field
  • financial indicator on the Y-Axis of the Scatter Plot
  • Default: GBU Setting
• Color On
  • user customizable additional Dimension that the Dot will be aggregated on in addition to Sold-To Name
  • this means that Dots that were originally aggregated by Sold-To Name can be split into more than one Dot depending on the Color On Dimension
  • Dots will be colored on the Scatter Plot based on this Dimension value
  • user can customize the color and toggle the visibility
  • Always Show Legend option is available if the Color On Dimension is defined
  • Default: GBU Setting
  • Dot visibility is used in Split and Merge, more details in the Split and Merge section
• Always Show Legend
  • On: Scatter Plot is reduced in display size and the Legend is always be shown
  • Off: Scatter Plot is set to maximum display size and the Legend is placed on top the top right corner of the Scatter Plot, the Legend can be minimized
  • Default: Off
• Tier Settings
  • a set of configurations for each Tier that affect Tier and Rock Bottom calculations
  • Default: GBU Setting
  • more details in the Segment Details and Tier Targets section

1.20. Whale Curve

• the visual representation of the concentration of contribution margin based on Customers, Products or a Segment
• more details in the Whale Curve section

1.21. Commitment

• an agreement between the Product Manager and Sales Rep on a Price for a specific Mapping Key
• there is a one to one or one to none relationship between Data Points and Commitment
• Commitments are hosted in Salesforce and can be accessed in pvelocity or Salesforce

1.22. Financial Indicator

• the measure that is focused on for the GBU in the Transactional Pricing Process
• it is set as the default Y-Axis for the Scatter Plot
• is one of the following: CM %, CM Per Unit, EXW Price Per Unit, Price Per Unit

1.23. Rock Bottom (Minimum)

• a measure used to determine the minimum that the Target should be based on
• the Rock Bottom Price or Margin is based on the financial indicator; for example, if the financial indicator is CM Per Unit, the Rock Bottom Margin is the minimum CM Per Unit the Target should be set to
• the Rock Bottom Price or Margin can be converted to be expressed as any financial indicator assuming that the costs remain the same
• in the Commitment, it is known as the Minimum Price and/or Margin
• more details on the calculation in Scatter Plot section

1.24. Tier Target

• a measure used to determine to recommended Price that the Sales Rep should commit to for the Data Points in a Tier
• it is set by the Product Manager based on the Rock Bottom
• the Tier Target Price or Margin is based on the financial indicator; for example, if the financial indicator is CM Per Unit, the Tier Target Margin is the recommended CM Per Unit for the Data Points in the Tier
• more details in the Segment Details and Tier Targets section

1.25. Target

• a measure used to determine to recommended Price that the Sales Rep should commit to for a specific Data Point
• it is set by the Product Manager based on the Rock Bottom and financial indicator of the Data Point
• the Target Price or Margin is based on the financial indicator; for example, if the financial indicator is CM Per Unit, the Target Margin is the recommended CM Per Unit for the Data Point
• the Target Price or Margin can be converted to be expressed as any financial indicator assuming that the costs remain the same
• more details in the Segment Details and Tier Targets and Data Point Details and Targets sections

1.26. Committed Price

• the Price determined by the Sales Rep that they will pursue with the customer for the specific Mapping Key
• approved or rejected by the Product Manager in the Commitment
• based on the Target Price, Last Price, Minimum Price and Average Price
• the Committed Price can be converted to be expressed as any financial indicator assuming that the costs remain the same
• more details in the Commitment Workflows section

1.27. Last Price

• the latest Price available in the Transactions data for a Mapping Key

1.28. Average Price

• the aggregated Price in the Data Point used to create the Commitment

1.29. Potential Impact

• a set of comparison measures used to analyze the impact between the target, rock bottom and/or committed price and the average price for a specific Mapping Key
• the comparison is expressed as a total Potential Impact

Potential Impact = (Viable Price Per Unit - Average Price Per Unit) * Expected Volume

• Potential Impacts are in Euros
• Viable Price can be Rock Bottom, Target or Committed Price and are in Euros
• Potential Rock Bottom Impact is only calculated if the Rock Bottom Price is higher than the average price.

1.30. Impact

• a set of comparison for a specific Mapping Key on a calendar quarter between
  • the price, costs, volume and exchange rates from the Actual Quarter to the Reference Quarter
  • the Rock Bottom, Target and Committed Price from a Round to the Reference Quarter
• the comparison is also expressed as the Impact to the Actual Quarter
• at most, there will only be 8 Impacts (2 years) for a specific Mapping Key depending on the data available

1.31. Impact Scatter Plot

• the visual representation of a Segment’s Data Points as Impacts on a bubble chart with Tier and Rock Bottom calculations
• more details in the Impact Scatter Plot section

1.32. Actual Quarter

• the calendar quarter (where prices, costs, volume and exchange rates will be sourced from) that is compared with the Reference Quarter and used calculate the Impact
• the Actual Quarter is displayed in the Transactional Pricing Tool as Quarter
• it is at least one year ahead of the Reference Quarter
• more details in the Impact Creation Algorithm section

1.33. Reference Quarter

• the calendar quarter (where prices, costs, volume and exchange rates will be sourced from) that is compared with the Actual Quarter and the Rock Bottom, Target and Committed Price
• it is at least one year behind the Actual Quarter
• more details in the Impact Creation Algorithm section

1.34. Quarter on Quarter Impact

• Quarter on Quarter (QOQ) Impact measures the change between one financial quarter (Actual Quarter) and the previous financial quarter (Reference Quarter)

1.35. Year over Year Impact

• Year over Year (YOY) Impact measures the change between the financial quarter in one year (Actual Quarter) and the same financial quarter in the previous year (Reference Quarter)

1.36. Cumulative Price Impact

• Cumulative Price Impact is the total Price Impact of previous financial quarters for Quarter on Quarter Impacts
• Year over Year Impacts does not have Cumulative Price Impact

1.37 . Impact Generation Details

1.37.1. Impact Calculations

Viable Delta price = Viable Price - Reference Price

• Reference Prices are in Euro
• Viable Prices are in Euro
• Viable Price can be Target, Committed or Actual Price

Viable Price Impact = Viable Delta Price * Reference Volume

Delta Volume = Actual Volume - Reference Volume

Volume Impact = Reference Price * Delta Volume

• Reference Prices are in Euro

Price Elasticity Impact = Delta Price * Delta Volume

Viable Delta FX Rate = -1 * Reference Price * (Viable FX Rate - Reference FX Rate)

• Reference Prices are in Currency
• FX Rate is defined as the rate to convert the Currency to Euro
• Viable FX Rate can be Commitment or Actual FX Rate, otherwise FX Impact is 0
• FX Impact is 0 if the Viable FX Unit does not match the Reference FX Unit

Viable FX Impact ) Viable Delta FX Rate * Reference Volume

Delta COGS = Actual COGS - Reference COGS

COGS Impact = -1 * Actual Volume * Delta COGS

Delta Logistics = Actual Logistics - Reference Logistics

Logistics Impact = -1 * Actual Volume * Delta logistics

Actual Sales w/o FX Impact = Reference Sales + Viable Price Impact + Volume Impact + Price Elasticity Impact

Actual Sales = Actual Sales + COGS Impact + Logistics Impact

Cumulative Viable Price Impact (Q_n)= Σ _{i=0 to n} Viable Price Impact (Q_i)

1.37.2.   Quarter on Quarter Impact Creation Algorithm

For each available Actual Quarter

Reference Quarter is prior to the Actual Quarter

Calculate the impact

1.37.2.1 Case 1: Impact Start Date At End Of Quarter

For all Data Points (Sold-to Code, Material Code, Country combinations) with a sale in every quarter and belongs to a Round analyzing Sep 2015 to Mar 2016, will have following Reference and Actual Quarters:

1.37.2.2 Case 2: Impact Start Date In Middle Of Quarter

For all Data Points (Sold-to Code, Material Code, Country combinations) with a sale in every quarter and belongs to a Round analyzing Sep 2015 to Apr 2016, will have following Reference and Actual Quarters:

1.37.2.3 Case 3: Impact Start Date with Multiple Rounds

For all Data Points with a sale in every quarter and belongs to a Round analyzing Sep 2015 to Dec 2015 and another Round analyzing Sep 2015 to Apr 2016, will have following Reference and Actual Quarters:

1.37.2.4 Case 4: Impact Start Date with Multiple Rounds

For all Data Points with a sale in every quarter and belongs to a Round analyzing Sep 2015 to Dec 2015 and another Round analyzing Sep 2015 to Apr 2016, will have following Reference and Actual Quarters:

1.37.2.5 Case 5: Infrequent Sales

For all Data Points with only sales in Q3 and belongs to a Round analyzing Sep 2015 to Apr 2016, will have following Reference and Actual Quarters:

* Q3 will show a gain due to the gain in sales from Q2

** Q4 will show a loss due to the loss in sales from Q3

1.37.3. Year over Year Impact Creation Algorithm

For each available Actual Quarter

For each Reference Quarter prior to Actual Quarter’s Year – 1 up to Actual Year – 1

If Reference Quarter exists

Calculate the impact

1.37.3.1 Case 1: Impact Start Date After Start of New Year

For all Data Points (Sold-to Code, Material Code, Country combinations) with a sale in every quarter and belongs to a Round analyzing Sep 2015 to Apr 2016, will have following Reference and Actual Quarters:

1.37.3.2 Case 2: Impact Start Date Before Start of New Year

For all Data Points with a sale in every quarter and belongs to a Round analyzing Sep 2015 to Dec 2015, will have following Reference and Actual Quarters:

1.37.3.3 Case 3: Impact Start Date with Multiple Rounds

For all Data Points with a sale in every quarter and belongs to a Round analyzing Sep 2015 to Dec 2015 and another Round analyzing Sep 2015 to Apr 2016, will have following Reference and Actual Quarters:

1.37.3.4 Case 4: Scheduled Sales

For all Data Points with only sales in Q3 and belongs to a Round analyzing Sep 2015 to Apr 2016, will have following Reference and Actual Quarters:

1.37.3.5 Case 5: Scheduled Sales with Late Sale

For all Data Points that belongs to a Round analyzing Sep 2015 to Apr 2016, with the following sales schedule in:

will have following Reference and Actual Quarters:

1.37.3.6 Case 6: Frequent Unscheduled Sales

For all Data Points that belongs to a Round analyzing Sep 2015 to Apr 2016, with the following sales schedule in:

will have following Reference and Actual Quarters:

1.37.3.7 Case 7: Infrequent Sales Referencing Previous Year

For all Data Points that belongs to a Round analyzing Sep 2015 to Apr 2016, with the following sales schedule in:

will have following Reference and Actual Quarters:

1.37.3.8 Case 8: Infrequent Sales Referencing No Data

For all Data Points that belongs to a Round analyzing Sep 2015 to Apr 2016, with the following sales schedule in:

will have following Reference and Actual Quarters: