Agreement Line Item

Owned by Ondřej Tesař
Nov 01, 2024
4 min read

The Items tab in a formula-based agreement allows you to define scenarios and line items. It provides flexibility in configuring multiple product and formula combinations to calculate prices. Each agreement must have at least one scenario. Additional scenarios can be created for comparison purposes.

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Applying a Formula to the Agreement

Applying a formula to an agreement involves setting up scenarios, selecting products and formulas, performing calculations, and comparing results.

1. Open the Items Tab

To begin, navigate to the Items tab of your agreement. This tab is where you define and manage the scenarios and line items for the agreement.

On the Items tab, there is a predefined scenario and predefined line item. One of each must always be present in the agreement. If you delete the scenario and click Recalculate, it will be populated back. Use this line or create your own.

2. Define Scenarios

Scenarios allow you to compare different formulas or forecasts. You can have multiple scenarios within an agreement.

In the table, you have the following options for a scenario:

  • Active: This checkbox indicates that this scenario should be used for recalculations and for price record generation.

  • Calculation Period: This specifies how often the price records are recalculated: monthly or quarterly. The logic looks through all contracts, finds those with active scenarios, and then checks their calculation periods. If there is a price record generated in the current month/quarter, then no generating takes place. But if there is not one, a new price record for the current month/quarter is generated.

  • Calculation Currency and Calculation Unit of Measure: These values are propagated from the header. If they are changed in the header, the change will be reflected here only after recalculation.

3. Add Line Items to a Scenario

Add the desired line item to a scenario or adjust the current one. For each item, on the Input Parameters tab (pane on the right side), fill in the following fields:

  • Product(s): Specifies which Product Group will provide SKUs for the recalculation. The number of products and the number of Additional Calculation Output Types directly translate into how many price records are generated.

  • Open Formulas (available only to users with the AGR_SalesAgent or AGR_FormulaManager role): Allows you to access the formula library directly from the agreement. Opens a pop-up dialog where you can make changes, such as creating a new formula. Once you are done, click the Confirm button to save your changes and recalculate the entire agreement. The newly created formula can then be selected from the Formula field below.

  • Formula: Allows you to select the appropriate formula definition (the formula must be approved). Draft Agreements will display the “Revoked Formula selected on Line Item“ warning if a revoked formula is applied to the document.

A revoked formula will continue to calculate prices on any agreements to which it was assigned, as it was valid at the time of assignment. Agreements need to be revised if the revoked formula requires replacement.

  • Override Adder Type: Allows you to enter a different Adder Type than specified in the formula definition. Note that this value can still be overridden if you define an exception for selected products.

  • Override Base Adder: Allows you to enter a different Base Adder than specified in the formula definition. Note that this value can still be overridden if you define an exception for selected products.

  • Product Exceptions: Allows you to specify products which should be treated differently (different adders, different bounds, different currency).
    The priority then is as follows:

1. Exceptions

2. Overrides

3. Base (the one in formula definition)

The inputs Adder Type, Base Adder, Exceptions are broadcasted from the Cost Plus formula, so they may not always be present if a different formula is used.

4. Perform and Calculations Review Outputs

After setting up the products and formulas, click Recalculate, or Recalculate Changes to generate prices. Once the agreement is recalculated, select the line item. Results are available on the Calculations tab on the panel on the right, or within the main table in corresponding columns.

Calculation Outputs Result Matrix

Once the agreement is recalculated, you can go to the Calculations tab of the panel on the right. It shows Calculation Outputs Result Matrix, which summarizes all the combinations: SKU, resulting price, currency, UOM, formula detail and message.

The Calculation Outputs Result Matrix on Header, Line Item and Scenario differ visually and in content:

  • Header: Displays only Line Items from the Active Scenario and includes Scenario Label and Line Item Label columns.

  • Line Item: Displays the selected line item’s data.

  • Scenario: Displays only Line Items present in the selected Scenario and includes the Line Item Label column.

Forecast Calculation Outputs Result Matrix

The result matrix displays the calculated prices for specific periods and SKUs, summarizing the calculations and any associated messages. The Forecast Results Matrix is available on for a line item.

Columns

Period Name

Displays the period for which the calculation is applicable. By default, the results are grouped by this column.

SKU

This column shows the SKU (Stock Keeping Unit) for which the price is calculated.

Calculated Result

Contains the calculated price for the given period and SKU.

Message

This column displays an error message from the engine if the price is null.