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Former Member
Nov 14, 2016 at 11:44 PM

Subcontracting Production Rate based pricing

119 Views Last edit Nov 14, 2016 at 11:58 PM 3 rev

Hi,

I need help in addressing a business scenario at a client. Our contract with a Subcontracting vendor Pricing is based on Production Rate/Throughput that can be achieved per day. Here how it is-

-Day rate of $7000/day during test phase and until the production rate reaches 2.5 Metric Tonnes Per Day.

-Once the Production Rate reaches 2.5 MT, rate switches to $2 per KG.

-If Production rate reaches 3.5 MT, Rate switches to $1.5 per KG

-If any time the production falls below 2.5 MT, Rate automatically switches to the day rate of $7000/day.

Few of the options I have explored are

Quantity based Scales in Purchasing Info-records. (Does not work in this scenario)

Manual Option. Where we can maintain the pricing manually in PO with three separate line items representing each production rate. (Clumsy solution and potential for data entry errors).

Could anyone suggest me a way forward.