Cumulative pricing and non-cumulative pricing are two different types of price breaks that can be used in Oracle Cloud Procurement.
Cumulative pricing is a type of pricing where the price break is applied to the total quantity of the item that has been ordered since the blanket purchase agreement (BPA) was created. For example, if a BPA has a cumulative price break for 50 units at $10 per unit, and 30 units have already been ordered, then the next 20 units would be priced at $10 per unit.
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Non-cumulative pricing is a type of pricing where the price break is applied only to the quantity of the item that is being ordered on the current purchase order (PO). For example, if a BPA has a non-cumulative price break for 50 units at $10 per unit, then a PO for 40 units would be priced at $10 per unit, and a PO for 20 units would also be priced at $10 per unit.
Here is a table summarizing the key differences between cumulative pricing and non-cumulative pricing:
| Feature | Cumulative Pricing | Non-Cumulative Pricing |
|---|---|---|
| Price break application | Total quantity ordered since BPA creation | Quantity ordered on current PO |
| Price break applicability | Multiple POs | Single PO |
| Suitable for | Large orders with predictable demand | Small orders with variable demand |
Examples of when to use each type of pricing:
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Cumulative pricing is a good choice when you know that you will be ordering a large quantity of an item over time and you want to get a discount for the total quantity ordered.
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Non-cumulative pricing is a good choice when you are not sure how much of an item you will need and you want to have the flexibility to order the item at different times without affecting the price.
In general, cumulative pricing is a more complex type of pricing to manage than non-cumulative pricing, but it can also be more cost-effective for large orders.
