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Cost calculation rule use cases

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This section features a use case for the Cost calculation rule. You can use this example to help you create similar and different rules for your scenarios.

Creating a quality score calculation formula

In this example, we have already run a cost calculation formula to solve for lowest cost in our event. The results have shown that there are a number of very competitive and close bids. To get an additional perspective of factors that we can use to better inform our choice in awarding winners, we configure a secondary cost calculation formula that encompasses cost, transit time, coverage, and reputation.

The Quality score formula we create awards 40 marks for cost, 20 marks for transit time, 20 marks for coverage, and 20 marks for reputation, giving each bidder a maximum score of 100. Because we are looking for bidders with higher scores, we configure our optimization goal for higher values.

Cost calculation rule — Example 1
Figure 1. Cost calculation rule — Example 1

Example explained:

  1. First, we select Quality score as the cost calculation formula.
  2. Then, we enter 10 in the Below field to exclude scores of less than 10 as they are considered outliers.
  3. Next, we select Higher values are better, because our optimization goal is for a higher quality score.
  4. Then, we select Quality score as the historic cost to compare the quality scores from the cost calculation with historic quality scores.
  5. Finally, we enter 10 in the Below field to exclude scores of less than 10 from the historic cost because they are considered outliers.