Name: Creating Tier Alternatives in SAP Ariba Sourcing Events
Uploaded: 2023-10-19
Duration: 271 s
Description: This video provides an overview of how to use tiered pricing within SAP Ariba sourcing events. Learn how tiered pricing allows you to see price breaks based on volume and make informed purchasing decisions.

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<div><div>This video provides an overview of how to use tiered pricing within SAP Ariba sourcing events. Learn how tiered pricing allows you to see price breaks based on volume and make informed purchasing decisions.</div></div>

Creating Tier Alternatives in SAP Ariba Sourcing Events

This video will provide an overview of how to use tiered pricing within SAP Ariba sourcing events. There are times when suppliers may offer discounts based on different volume tiers. Tiered pricing allows you to see where the price breaks are based on volume for each supplier. Updated pricing can be beneficial when you are not exactly sure what quantity you will be buying in the future. Having price based on various quantities saves you from asking for updated pricing when your forecasted quantities change. It is also helpful to see where the price breaks are and for each supplier, since supplier A may provide a different tiered structure than supplier B. In addition to your forecast, the knowledge of what quantities will yield specific discounts can help you decide exactly how much to buy. For example, if you are sourcing for two items and the quantities needed of each item may change due to fluctuating forecasts, tiered pricing will be needed to know what quantities yield a price discount. In order to allow participants to submit bids using volume discounts, be sure that the rule Can Participants Create Tiers? is set to yes in the bidding rules of your template or event. Create your event as you normally would, and when you create the content within your event, you input a single quantity for each line item. Suppliers must submit a bid based on these quantities in their primary bid. Initially, suppliers submit their primary bid based on the quantities indicated by the project owner. Once their primary bid has been accepted, they will have the option of creating an alternative bid. In order to create an alternative bid, suppliers click Alternative, Tiered Alternative. The options available in the alternative menu depend on what alternative response types participant bundles, tiers, and or alternative pricing have been enabled, and in our example only tiers will be enabled. On the next screen each supplier provides a name for the alternative bid. Since the suppliers create a primary bid and potentially multiple alternative bids, the system organizes them requiring a name for each bid. The primary bid is automatically labeled by the system as primary. All alternative bids are given names by the suppliers as they create the alternative bids. The alternative bid names are also displayed to the project owner. Next, the supplier provides a name for the tiered structure and selects the items that will be included in it. They can select only the items for which they've already submitted a primary bid. If more than one item is selected, the items will have the same tier structure. In the Tiers section, the supplier builds each tier by entering the minimum and maximum quantity for each tier. The quantities must be whole numbers and not overlap. In other words, you cannot have a tier of 1 to 100 and another tier of 100 to 200, since the quantity of 100 is in both tiers. The supplier must provide a value for both minimum and maximum quantity to define each tier. They could not create a tier where they entered 501 in the minimum quantity field and leave the max quantity field blank. They would have to enter something in the max quantity field such as 1000. Once the supplier has completed building the tiers, they click apply to add pricing to each tier within that tier structure. The system will populate these fields with the bids from the primary bid, but the supplier can edit them with new pricing. Also, the supplier can click Sync Primary Bid to have the system automatically enter the current primary price bids in the tiered pricing fields. The supplier would then edit them as needed. For additional information on tiered pricing, please consult our product documentation.