You can use the Cost calculation rule to define the cost function used to optimize bids, set optimization goals, and exclude bids from the evaluation. After you edit settings, click Save Changes at the top of the tab.
- Cost - Select a primary formula, secondary formula, or a column to be used as the cost calculation formula from the dropdown list. By default, the primary formula is selected. If you do not have a secondary cost calculation formula configured and want to create one, go to Design > Cost Calculation, or click the secondary formula link under the dropdown list. For more information on cost calculation, see Cost Calculation overview.
Exclude - Set parameters for excluding outlier bids using the Below and Above fields. Outlier bids are unrealistic, anomalous, or erroneous bids that can skew analysis if they are not omitted. Only values within the limits set by these parameters will be considered during evaluation. - Optimization goal - Select whether Sourcing Optimizer optimizes for lower values or higher values.
- Lower values are better: This setting can be used if lower results are preferred. For example, for price.
- Higher values are better: This setting can be used if higher results are preferred. For example, for a quality score.
- Historic cost - Select Event default, a secondary formula, or a column to be used to calculate the historic cost from the dropdown list. By default, Event default is selected. If you selected a non-primary cost calculation formula, it can be useful to also specify an alternative formula for historic cost so that so that savings can be calculated effectively.
Exclude - Set parameters for excluding outlier bids using the Below and Above fields. Outlier bids are unrealistic, anomalous, or erroneous bids that can skew analysis if they are not omitted. Only values within the limits set by these parameters will be considered historic cost.