Lot Weights

What are Lot Weights?

Lot weights are a way to adjust the value of lots behind-the-scenes to emphasize or de-emphasize certain lots. During the evaluation stage, Sourcing Optimizer will multiply the bid value by the assigned weight. By default, all lots have a weight of 1.

For example, entering a lot weight of 2 will result in an increased weight value for that lot (e.g., an original bid value of $2,000 becomes $4,000 ($2,000 x 2)). Note that the lot weights are not communicated to the bidders.

Establishing Lot Weights

Go to the 'Lot Design' step under 'Design'. After creating your attributes and entering the lot details, add one more attribute called 'Lot Weight'. Then, enter a weight for each lot (e.g., 1, 2, etc.). Fractional numbers are not supported.

Next, click on the gear icon at the top right and select '+ Lot Weight' (see figure below). Choose 'Lot Weight' as the column you'd like to map. Click 'Create Mapping'.

Figure 1: Lot Weight Mapping

Let's look at an example demonstrating the impact of lot bids. In the figure above, there are six lots - assume that the first three (Lot A, Lot B, and Lot C) are strategic and high-value, while the remaining lots are being phased out. However, because the quantities are much greater for Lots D, E, and F, their total value exceeds that of the strategic items.

Furthermore, assume that a bidder has created two bundles - one consisting of the strategic items and another consisting of the other items. For both, the discount is the same. Also, the bidder has a maximum limit of three lots.

In this case, Sourcing Optimizer will always choose the bundle with the other items because their total value is higher, and therefore, the discount is higher.

If the user adjusts the lot weight values for the strategic items, say changing them from 1 to 2, then they more accurately represent the value of the lots to the buyer.

After this adjustment, Sourcing Optimizer will award the bundle with the strategic items because, behind the scenes, it's now applying a higher value to these items and to the discount. The higher quantities for the other items were distorting the results, but by using lot weights, the user obtains a result that achieves a greater discount per unit.

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