Configure Conditions for a Set of Contract Terms
Security Note: You need the Allow contract maintenance security right in the Contracts domain security rights group for this activity.
Activity Steps
- Open the Sales Contract or Purchase Contract.
- Select the node for the specific set of contract terms.
- Update the Contract Term name if required.
- In the Contract Term Conditions field group:
- Update the Start Date and End Date if required. A contract can have sets of contract terms at the contract level, product level and/or quota level. At any one level, multiple sets of contract terms are possible only if the date ranges of the contract terms do not overlap, or if the sets of contract terms have different delivery terms. Default for contract or product-level contract terms: The date range of the contract. If the contract does not have an end date, the default end date of the set of contract terms is the last day of the year. Default for quota-level contract terms: The date range of the quota.
- Select the Delivery Terms from the delivery terms defined in the Delivery Term Editor. If only one delivery term is selected, new despatch orders (DOs) are assigned that delivery term. If multiple delivery terms are selected, DOs are limited to the selected delivery terms.
- Update the following fields if required.
- Quantity Decimals—Number of decimal places to which the material amounts are rounded for pricing the contract. Default: 3.
- Unit Price Decimals—Number of decimal places to which the unit price is rounded for pricing the contract. Default: The number decimal places specified for the default currency in the Currency/Exchange Editor.
- Invoice Evaluation Method—Only applicable to contracts with product pricing. Not applicable to contracts with bricks. Select from:
- By Pricing Header (default)—Invoices are evaluated according to the Pricing Method specified in the quotation pricing (QP) header.
- By Pricing Line—Invoices are evaluated by pricing line and no Pricing Method can be specified in the QP header. This option affects the evaluation of both revenue line items and contract charges that affect the revenue line items.
- Dry Mass Calculation Rule—Rule for calculating the dry mass of DOs when there are multiple despatches per DO (or CDO). Select from:
- Aggregated By Despatch Order (default)—Wet mass and moisture are aggregated across all despatches and the dry mass is back-calculated using the DO’s wet mass and moisture.
- Aggregated By Despatch—The dry mass is calculated and rounded for each despatch. The dry mass of the DO is the rounded sum of the dry masses of the despatches.
- By Lot—The dry mass is calculated and rounded for each lot. The dry mass of the DO is the sum of the rounded dry masses of the lots.
- Use Dry Quantity—Whether the pricing in the contract terms is for the dry quantity. If unchecked, the pricing is for the wet quantity.
- Adjust Invoice Value Using Unit Price—Whether to adjust the invoice value of revenue line items and contract charges using the unit price, and whether to use any specified Payable Content Decimals (on the Payable Analyte nodes) to round the payable percentage of the applicable payable analyte (in addition to rounding the payable content). This setting does not affect service charges. If unchecked (which is the default), the following calculation method applies:
1. Original Revenue = Price * Payable Content
2. Rounded Original Revenue = Round (Original Revenue, Quantity Decimals)
3. Unit Price = Rounded Original Revenue / Quantity
4. Rounded Unit Price = Round (Unit Price, Unit Price Decimals)
If checked, the following further adjustment applies:
5. Adjusted Invoice Value = Rounded Unit Price * Quantity
6. Rounded Adjusted Invoice Value = Round (Adjusted Invoice Value, Currency Decimal Places)
Example: 9958.2922 dry metric tonnes (DMT) of material containing 24% copper is priced at $8438.80 per DMT of Cu. The Quantity Decimals, Unit Price Decimals and Currency Decimal Places are all set to 2. If the invoice price is not adjusted using the unit price:
1. Original Revenue = 8438.80 * 24% * 9958.2922 = 20,168,648.6921664
2. Rounded Original Revenue = Round (20,168,648.6921664, 2) = 20,168,648.69
3. Unit Price = 20,168,648.69 / 9958.2922 = 2025.311999
4. Rounded Unit Price = Round (2025.311999, 2) = 2025.31
However, if the invoice price is adjusted using the unit price:
5. Adjusted Invoice Value = 2025.31 * 9958.2922 = 20,168,628.78
6. Rounded Adjusted Invoice Value = Round (20,168,628.78, 2) = 20,168,628.78
Note: If Invoice Evaluation Method is By Pricing Line and the Weighting Type in the quotation pricing header is Cumulative Quantity, MineMarket can create a child despatch order (CDO) for each tier. This scenario uses split parent despatch order (SPDO) functionality. See Parent and Child Despatch Orders.
Example: A coal company has a sales contract with cumulative pricing across multiple tiers. This pricing is set up as one QP header with a Weighting Type of Cumulative and two QP lines (one for each tier). A calorific value (CV) adjustment is set up as a calculated contract charge. The CV adjustment formula is Price * (5800/6000 - 1). One DO for 130,000 mt is split over the two tiers, with 100,000 mt priced at USD65/mt and 30,000 mt priced at USD50/mt.
If the Invoice Evaluation Method of the contract terms is By Pricing Header, and the Pricing Method in the QP header is Weighted Average:
Tier WMT Price CV Adj. Rounded CV Adj. Adj. Price Total 1 100,000 65.00 2 30,000 50.00 Total 130,000 61.5384615 -2.05128205 -2.05 59.4884615 7,733,500.00 If the Invoice Evaluation Method of the contract terms is By Pricing Line:
Tier WMT Price CV Adj. Rounded CV Adj. Adj. Price Total 1 100,000 65.00 -2.16666667 -2.17 62.83 6,283,000.00 2 30,000 50.00 -1.66666667 -1.67 48.33 1,449,900.00 Total 130,000 7,732,900.00
- Click Save.
