Cost Factor and price Break in Oracle Sourcing

There are two types of cost factors.

1.Supplier cost factors identify additional costs (beyond just price) that the buyer must pay a supplier to acquire an item or service.

 A new Specialized Equipment or Machine bought might include a cost of Training.

Buyers define supplier cost factors and suppliers respond with the amount they will charge.

2.Buyer cost factors reflect additional costs involved when dealing with a particular supplier.

This Could be Transporation Cost Due to Supplier geographical Location

Buyers define buyer cost factors and specify the amount for each. Suppliers do not respond to buyer cost factors.

We can Define a Default Cost Factor for Negotiation Documents. Buyers can override this value when creating a negotiation.

Options are 1.Buyer 2.Supplier 3. Buyer & Supplier 4. None.


Price Breaks      

Price Breaks can be Specified when creation Negotiation for Blanket and/or Contract Purchase Agreement.

Buyers can Require and Allow Supplier to respond with Price Break quantity and values.

Options are 

1.None - no price breaks are defined.
2.Required - suppliers must respond to the price breaks and cannot modify them.
3.Optional - supplier must respond to the price breaks but can also modify the buyer's price break values.

Always a Buyer can override the default Price Break type at Document level.