Skip to main content
Solved

Price markup and contribution margin

  • January 14, 2021
  • 2 replies
  • 258 views

Forum|alt.badge.img+17

Hello, 

I have noticed an issue with existing Sales Parts and I am unsure of the correct way to apply a % increase to the price. Initially, I assumed I could use the contribution margin on a Sales Quotation to accomplish this, however, if the part is existing in your system, that is calculated automatically. 

The scenario below outlines the issue I am facing:

  1. Existing part number XYZ has a Cost of $4.55 and a Price of $18.35
  2. The system calculated Contribution Margin rate is 75.17%
  3. The customer has contacted us and stated they want 255 XYZ parts expedited and they would like to see a quote for this.
  4. We would like to add 20% to the price of the part for the expediting. 
  5. Our Sales team created a quote and modified the contribution margin. They changed it to 20%, which dramatically lowered the price.

Modifying the CM does not appear to be the correct method to markup a price of an existing part in this instance.

Is there a function in IFS that would accommodate this scenario? Any help would be greatly appreciated. 

Best answer by paul harland

Hi @cjohnson 

If the requirement is to add 20% to the price, then why don’t they just add 20% to the price? maybe go into the price field and type *1.2 (would be the fewest keystrokes)?

The tool of being able to manage the CM is there in case there are defined minimums on margin. 

View original
Did this topic help you find an answer to your question?
This topic has been closed for comments

2 replies

paul harland
Superhero (Employee)
Forum|alt.badge.img+24

Hi @cjohnson 

If the requirement is to add 20% to the price, then why don’t they just add 20% to the price? maybe go into the price field and type *1.2 (would be the fewest keystrokes)?

The tool of being able to manage the CM is there in case there are defined minimums on margin. 


Forum|alt.badge.img+17
  • Author
  • Superhero (Customer)
  • 224 replies
  • January 14, 2021

Hey @paul harland great idea! That addressed it perfectly. Thank you!


Cookie policy

We use cookies to enhance and personalize your experience. If you accept you agree to our full cookie policy. Learn more about our cookies.

 
Cookie settings