It's possible to create variable pricing for certain types of items. For example, if you create a contract for printing services, you can set up special pricing to allow for variable factors, such as paper weight and size, ink, print methods, print locations, and so on.

Use the Formula Pricing option to set up special pricing when different variables will affect the final price of the catalog item or category-based item.

You can add and edit formula pricing (when available) from the Pricing Terms tab on the Summary screen.

See the Ariba Category Procurement Guide for details on how to set up contractible factors (or properties), and how they are used in contracts to determine final pricing.

See the Ariba Contract Compliance Guide for details on how to add other operator buttons (for minimum, maximum, average, and so on) to this screen.

To create formula pricing, some catalog setup is required to define attributes that will determine pricing and to create a partial item. Category-based service items can also define contractible factors that are used like attributes to catalog items in formula pricing too. Your Catalog Manager or other application support staff can assist in this process. Prices are not assigned to attributes in the catalog because you can create special pricing based on the item attributes.

When formula pricing is listed as an option under Pricing and Discounts (or under an expanded Contractible Factor) on the Add/Edit Item Level Pricing Terms screen, you can assign values to the item attributes or contractible factors, and add the attributes to a formula that will be used to calculate the final price of the item.

To create formula pricing for the item:

1. Click Define values for each attribute that you will use in the price calculation, and enter the attribute values. For example, if the attribute is size, you might enter prices for small, medium, large, and extra large. Values are used to calculate formula pricing for the item. You can select two attributes and click Create Matrix to combine these attributes into a single attribute defined by a two-dimensional matrix (or table). For example, if one attribute is color and the other is size, you might enter various prices for the combinations of size and color: small and blue, small and red, large and blue, large and red, and so on. Once you define values for an attribute, the attribute displays in the Add Attributes to Formula section and can be added to the formula.
2. Click Add to formula for each attribute to be used in the formula. Use the arithmetic operators to create the formula that will be used to calculate pricing for the item.
• Once you add values, click Edit to change the values, if desired.
• To delete values you previously added, check the associated check box and click Delete. You can add new values for the attribute, if desired. If you delete an attribute that you previously added to the formula, remove the attribute manually from the formula field.
• You can use the same attribute multiple times to create different variables within a formula, provided you use a different name when defining a new set of values for the attribute. For example, the paper weight attribute of a printing job could define a “setup” charge, as well as a “per impression” charge.
3. When you finish creating the formula, click Validate to ensure the formula is complete and can be used to calculate the price when the item is added to an order.
• If errors occur during validation, an error message displays.
• Correct the errors and validate the formula.
4. Click OK to save the formula and return to the previous screen, or click Cancel to return without saving the formula.