Quotation Pricing Headers and Lines

• Quotation Pricing Headers and Lines
• • Quotation Pricing Header Configuration
  • Quotation Pricing Line Configuration

Pricing for a contract product can be based on the product or analytes, and is entered as quotation pricing (QP) lines within QP headers. Each QP header can contain as many QP lines as are required. Each QP line has the information required to calculate a price. This information includes a fixed price, or a date range (the quotation period) for obtaining the price from a price series. QP lines can be limited to a quantity of material: either a fixed quantity or a percentage of the material to be priced.

In MineMarket, the acronym 'QP' can also refer to a quotation period.

QP headers can be set up for each invoice type that is selected on the Contractual Invoice Types node of the contract terms. Multiple QP headers can be configured for an invoice type if Maximum Iterations is greater than 1 for that invoice type on the Contractual Invoice Types node.

The Pricing Method of the QP header controls which QP lines are used to determine the actual price. For example, a weighted average or sum of all lines; or only the highest or lowest line.

The Pricing Method of the QP line controls which prices are considered within the quotation period; for example, the average, highest or lowest.

Forward curve prices can be used for provisional invoices and in snapshot calculations when actual prices are not yet available. See Price Series.

QP lines can be hedged to manage the risk of fluctuating prices or exchange rates. See Hedge Positions.

QP headers and lines can be overridden for individual despatch orders if required. See Override Contractual Quotation Pricing for a Despatch Order.

Quotation Pricing Header Configuration

Applicable fields of the QP header are used in combination. The following list describes all possible QP header fields.

Quotation Pricing Type—Invoice type to which the QP header applies, set when the QP header is created. Select from the enabled invoice types on the Contractual Invoice Types node of the contract terms.

Quotation Pricing Iteration—Invoice iteration to which the QP header applies. Only enabled if Maximum Iterations is greater than 1 for that invoice type on the Contractual Invoice Types node. When creating QP headers, if the Maximum Iterations is n for a final invoice, the first Final quotation pricing type generated is given the Default quotation pricing iteration. The second Final quotation pricing type is given 1 as its quotation pricing iteration, and the third given 2, and so on. No more than n can be specified for the selected invoice type.

Pricing Method—Method to control which QP lines from the Quotation Pricing table are used to determine the actual price. Not applicable if Invoice Evaluation Method is By Pricing Line on the Contract Terms node. Select from:

• Average—Average of all QP lines
• Highest—Highest QP line
• Lowest—Lowest QP line
• Linked Pricing—Pricing method from the contract that is specified under the Contract Links node of the contract terms. Not applicable when overriding pricing in an invoice.
• Sum—Sum of all QP lines
• Weighted Average—Weighted average of each QP line, calculated as:

  Price per Price UOM * Weighting Value (converted from quantity UOM) / Total of each value in the Weighting Value column (converted from Quantity UOM)

  Example: Three QPs are defined: $100 per tonne for the first 1000 tonnes, $200 per tonne for the next 2000 tonnes, and $275 per tonne for the remaining quantity. For a despatched quantity of 5500 tonnes:

  Price = ($100 /t * 1000 t) + ($200 /t * 2000 t) + ($275 /t * 2500 t) = $1,187,500.00

  Average price per tonne = $1,187,500.00 / 5500 t = $215.9091 /t

  This price is the unit price on the invoice, regardless of the loaded weight.

Weighting Type—Weighting applied when there are multiple QP lines.

Note: The following examples assume that the Pricing Method in the QP header is Weighted Average.

Select from:

• Percentage—This weighting is applied as a percentage of the despatched quantity.

  Example: Two QP lines are defined: $10 per tonne for the first 60%, and $12 per tonne for the remaining 40%. For a despatched quantity of 8600 tonnes, the price is calculated as:

  (10 $/t * 60% * 8600 t) + (12 $/t * 40% * 8600 t) = 10 $/t * 5160 t + 12 $/t * 3440 t = $51,600 + $41,280 = $92,880

  The average price of the product is calculated as:

  $92,880 / 8600 t = $10.8/t

• Quantity—This weighting is applied on the despatched quantity.

  Example: Two QP lines are defined: $10 per tonne for the first 5000 tonnes, and $12 per tonne for the remaining quantity. For a despatched quantity of 8600 tonnes, the price is calculated as:

  (10 $/t * 5000 t) + (12 $/t * 3600 t) = 50,000 + 43,200 = $93,200

  The average price of the product is calculated as:

  $93,200 / 8600 t = $10.8372/t

• Cumulative Quantity—This weighting is applied on either the wet mass or the dry mass, and considers all despatches for the set of contract terms cumulatively. Only applicable to contracts with product pricing where the Invoice Evaluation Method in the contract terms is By Pricing Line.

  Example: Two QP lines are defined: $65 per tonne for the first 50,000 tonnes, and $60 per tonne for any subsequent quantity. For a first despatch of 46,000 tonnes, the price is calculated only with the first QP line:

  65 $/t * 46,000 t = $2,990,000

  For a second despatch of 10,000 tonnes, the price is calculated using both QP lines because 4000 tonnes remain in the 50,000 of the first QP line:

  65 $/t * (50,000 t - 46,000 t) + 60 $/t * (10,000 t - (50,000 t - 46,000 t)) = 65 $/t * 4000 t + 60 $/t * 6000 t = $260,000 + $360,000 = $620,000

  The average price of the product in the second despatch is calculated as:

  $620,000 / 10,000 t = $62/t

  For a third despatch of 25,000 tonnes, the price is calculated only with the second QP line:

  60 $/t * 25,000 t = $1,500,000

  Note: If Invoice Evaluation Method in the contract terms is By Pricing Line and the Weighting Type is Cumulative Quantity, MineMarket can create a child despatch order (CDO) for each tier. This scenario uses split parent despatch order (SPDO) functionality. See Split Parent Despatch Orders.

Weighting Reference—Weighting reference for the QP header.

• For contracts with product pricing and Weighting Type of the QP header set to Percentage or Quantity, select from Contract Product Quantity, Dry Mass, Priced Quantity, Quota Quantity, Required Quantity and Wet Mass.
• For contracts with product pricing and Weighting Type of the QP header set to Cumulative Quantity, select from Dry Mass and Wet Mass.
• For contracts with analyte pricing, select from Analyte Content, Parent Analyte Content and Quota Analyte Content.

Pricing Decimals—Number of decimal places to which the QP header amount is rounded and displayed on the invoice. Even though the individual QP lines may be calculated using the Pricing Decimals defined in the Quotation Pricing field group, the final price is rounded to this number of decimals. If decimal places are not defined, no rounding is applied and the values are stored unrounded.

Example: If the number of decimal places for the QP header price is two, and there are three QP lines, the first to be rounded to six decimal places, the second to four decimal places and the third to zero decimal places, they will each be calculated according to their number of decimal places. However, the final price is rounded to two decimal places.

Force QP Header—Whether to force the use of this QP header for the specified invoice type. If unchecked, the latest possible QP header will be used in invoice calculations. For example, if all required information is already available to calculate the invoice with the final QP header, that QP header will be used, even if the invoice being created is a provisional invoice.

Price Approved—Whether the QP header is approved. The QP header must be approved before it can be used in an invoice. Only displays if Require Price Approval is checked on the Sales and Marketing tab of the Options screen. See Specify Sales and Marketing Settings.

Include Forward Curve Prices—Whether to include prices from a forward curve when calculating provisional prices. If the QP is incomplete, required actual prices might not all be available. If this setting is selected, a combination of actual prices from the price series and forward prices from the related forward curve are used. Only applicable for QP headers with Quotation Pricing Type of Provisional. Only affects QP lines with a Pricing Method of Average, Highest or Lowest.

Note: This setting does not affect despatch order and quota snapshots. To include forward curve prices in snapshots, set Estimate Price If QP Unfinished to Actual Prices + Forward Curve on the Snapshot Settings tab of the Options screen. See Specify Snapshot Settings.

Quotation Pricing Line Configuration

Applicable fields of each QP line are used in combination. The following list describes all possible QP line fields.

Order—Order in which the QP lines are used to determine the pricing for the QP header.

Spot Pricing Date—Date of the spot pricing.

Pricing Method—Method to determine the price of the QP line. Select from:

• Average—Average of all prices in the Price Series for the specified Quotation Period
• Highest—Highest price of all prices in the Price Series for the specified Quotation Period
• Lowest—Lowest price of all prices in the Price Series for the specified Quotation Period
• Fixed Unit Price—The price specified in Price Value
• Same As Previous Invoice—The price from the previous commercial invoice within the scope of the despatch order
• Linked Pricing—The price from the contract that is specified under the Contract Links node
• Unknown—The price needs to be declared per despatch order. Only applicable to QP lines for final QP headers. Not applicable to sets of mark-to-market terms. See Quotation Pricing Certainty.

Price Series—Price series used to calculate the price for the QP line. Select from the price series defined in the Pricing Editor. Only price series with matching Material Type, Products or Analyte display; however, for payable analytes that are calculated analytes, all price series display. Only applicable if the Pricing Method of the QP line is Average, Highest or Lowest.

Quotation Period—Date range for which to use prices from the Price Series for the quotation pricing line. Select from:

• Fixed—Selected start and end dates.
• Predefined—Predefined functions, based on a time period, that depend on the despatch dates or another date. See Expression Editor Functions - Quotation Period Category for descriptions. For example:
  • MAMA: M1 months after the month of arrival + M2 months
  • MOS: M1 months after the month of shipment + M2 months
• Calculated—Complex calculations can be entered and tested using the Expression Editor. Dates and times associated with the despatch can be accessed, and an expression can combine various functions.

Daily Pricing—Whether to calculate the total price using a price for each day's quantity and allow prices to be overridden. If checked, each day's quantity is multiplied by each day's price. The price for each day can be overridden in the Pricing Detail (if opened from the quotation pricing on the Contract Term Overrides tab of a despatch order). If unchecked, the Pricing Detail displays quantities and prices per day; however, the total price is calculated using the total quantity and the average of the prices. No overrides are possible. Only applicable if the Pricing Method is Average.

Price Value—Fixed price value for the QP line. Only applicable if the Pricing Method is Fixed Unit Price.

Floor—Minimum price for the QP line. Only applicable if the Pricing Method is Average, Highest or Lowest.

Cap—Maximum price for the QP line. Only applicable if the Pricing Method is Average, Highest or Lowest.

Fixed Price Charge—Fixed charge or adjustment to be added to the price.

Decimal Places—Number of decimal places to which the QP line is rounded. If decimal places are not defined, no rounding is applied and the values are stored unrounded.

Price Currency—Currency for the price calculated with the QP line. Select from the currencies defined in the Currency/Exchange Editor.

Price UOM—Unit of measure for the price calculated with the QP line. Select from the Mass units of measure defined in the Unit Conversion Editor.

Adjust To 3rd Wednesday—Whether to adjust the pricing to the third Wednesday of the month for unknown quotation pricing. Only applicable to QP lines with Pricing Method set to Unknown.

If checked and the declaration date:

• Is on or before the third Wednesday, MineMarket uses the price from the third Wednesday of that month.
• Is after the third Wednesday, MineMarket uses the price from the third Wednesday of the next month.

If unchecked and the declaration date:

• Is before the end of the quotation period, MineMarket uses the price from the declaration date.
• Is after the end of the quotation period, MineMarket uses the last price of the quotation period.

If unchecked and the pricing is undeclared:

• If the snapshot calculation is before the end of the quotation period, MineMarket uses the (forward) prices between the date of snapshot calculation and the end of the quotation period.
• If the snapshot calculation is after the end of the quotation period, MineMarket uses the last price of the quotation period.

Declare By—Configuration for the date by which the pricing for the QP line must be declared. Only applicable to QP lines with a Pricing Method of Unknown, or for optional QP lines. Select from:

• Start Of Quotation Period—If the start or end of the quotation period is selected, an offset of a number of months or days can be specified. The offsets can be positive or negative numbers. The QP must be declared per despatch order.
• End Of Quotation Period
• Fixed Date—If a fixed date is selected, an optional QP can be declared in the set of contract terms. The declaration applies to all despatch orders using that QP configuration. Unknown QPs can only be declared per despatch order.

Declaration—Whether the optional quotation pricing declaration was made by the buyer or seller and the date of the declaration. This field is read-only.

Weighting Value—Limit the QP line to a percentage of the quantity or to a fixed quantity. This can be used if different portions of the quantity are to be priced differently. If there is only one QP line, the Weighting Value should be blank because the QP line is applicable to the entire quantity (100%).

For multiple QP lines within the one QP header, if the Weighting Type of the QP header is:

• Percentage—This value specifies a percentage of the quantity. The total of the QP lines for the QP header must either be 100%, or the last QP line can have the Weighting Value blank.
• Quantity—This value is a fixed quantity. The last QP line must have the Weighting Value blank. This is to cover any remainder of the quantity after the other QP lines are considered.
• Cumulative Quantity—This value is a fixed quantity. The last QP line must have the Weighting Value blank. This is to cover any remainder of the quantity after the other QP lines are considered.

  Note: If Invoice Evaluation Method in the contract terms 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.

Quantity UOM—If the Weighting Type is:

• Percentage—The quantity UOM is %.
• Quantity—Select from the Mass units defined in the Unit Conversion Editor.

Use All Fixed Weight—Whether to use all the fixed weight specified for the QP line, even if the despatch order weight is less than the QP line's fixed weight. Any difference is then calculated with a QP line without a fixed weighting value. Only applicable for QP lines within a QP header where the Pricing Method is Weighted Average.

Example: A despatch order has a weight to be valued of 203.195 lb. The Pricing Method of the QP header is Weighted Average. The following QP lines are set up for the QP header.

(QP Line) Pricing Method	Price	Weighting Value (Quantity)
Fixed Price	1675.75	175
Fixed Price	2000.00	50
Average (Price Series)	MOS(1,0)=1593.909	NA

If Use All Fixed Weight is unchecked (default), the weighted average of the QP lines will be calculated as follows.

Price	Quantity	DO Available Mass	Notes
1675.75	175	203.195	Continue to next line because available mass > fixed weight.
2000.00	50	28.195	Stop because available mass < fixed weight.
1593.909	NA	NA
WA={(1675.75*175)+(2000*28.195)}/203.195=1720.74

If Use All Fixed Weight is checked for the first two QP items, the weighted average of the QP lines will be calculated as follows.

Price	Quantity	DO Available Mass	Notes
1675.75	175	203.195	Continue to next line because all fixed weight must be used.
2000.00	50	28.195	Continue to next line because all fixed weight must be used.
1593.909	NA	–21.805	The negative difference is priced using the non-fixed-weight line.
WA={(1675.75*175)+(2000*50)+(1593.909*–21.805)}/203.195=1764.32

Applicable To Quantity Of Invoice—Calculate the QP line based on the quantity of a previous locked invoice. If a previous invoice iteration of the same type, or a previous invoice type exists, this option can be selected so that all or part of the QP line relates to the quantity of the specified invoice type and iteration.

• If a Weighting Value is specified, only that percentage or quantity is applicable for this QP line.
• If a Weighting Value is not specified, the entire quantity (or 100%) from the specified previous invoice type and iteration is applicable for this QP line.

Applicable To Quantity Of Invoice must be specified if Pricing Method is Same as Previous Invoice.

If Applicable To Quantity Of Invoice is blank (which is the default option), the QP line does not depend on the quantity of any previous invoice.

Example: A customer requires that the quantity that was applicable in the provisional invoice will be priced in exactly the same way when the final invoice is created. However, if the quantity has changed since the provisional invoice, the difference will have new pricing. The following configuration is required in MineMarket:

• In the provisional QP header, Force QP Header is checked.
• The final QP header has two QP lines:
  1. The first QP line has:
     • Pricing Method = Same as Previous Invoice
     • Weighting Value = blank (therefore, the entire quantity from the provisional invoice is used)
     • Use All Fixed Weight = checked (if the provisional invoice has a greater quantity than the final invoice, the second QP line will be calculated with a negative quantity)
     • Applicable To Quantity Of Invoice = Provisional
     • Invoice Iteration = blank (so that the last locked provisional invoice is used, whatever the iteration)
  2. The second QP line has the pricing specific to the difference in quantity (for example, from a price series and based on the bill of lading date, or fixed pricing):
     • Weighting Value = blank (therefore, the difference between the provisional and final invoice quantities is used)
     • Use All Fixed Weight = unchecked
     • Applicable To Quantity Of Invoice = blank
     • Invoice Iteration = blank

Invoice Iteration—If Applicable To Quantity Of Invoice is defined, this is either:

• The iteration number of the specified invoice type
• Blank, in which case, the last iteration of the specified invoice type is used

Exchange Rate Source—Exchange rate source used to determine the exchange rate from the Price Currency to the primary currency used in the contract terms. Select from the currencies defined in the Currency/Exchange Editor.

Exchange Rate Method—Method to determine the exchange rate to the QP line's Price Currency. Select from:

• Average Quotation Period—The exchange rates for the quotation period are averaged, and the result is used to convert the price value into the currency of the QP line.
• Daily Quotation Period Average—The price value is converted into the currency of the QP line for each day of the quotation period, and these converted values are then averaged.
• Date Of Invoice
• Previous Month Average
• Last Day Of Previous Month—Uses the last business day of the previous month if a calendar is specified for the Exchange Rate Source. If multiple calendars are specified, the last business day common to all calendars is used.
• Day Before Invoice Date—Uses the last business day before the invoice date if a calendar is specified for the Price Series of the QP. If multiple calendars are specified, the last business day common to all calendars is used.
• Last Known Exchange Rate
• Bill Of Lading—If the bill of lading date is a non-working day in the applicable calendar, uses the exchange rate from the previous business day.
• Day Before First Invoice Date—Uses the last business day before the date of the first commercial invoice if a calendar is specified for the Exchange Rate Source. If multiple calendars are specified, the last business day common to all calendars is used.

If the applicable QP header has multiple QP lines, each line is calculated individually before the Pricing Method of the QP header is applied.

Fixed Exchange Rates—Fixed exchange rates to use instead of rates from the specified Exchange Rate Source. Click the ellipsis (...) to open the Fixed Exchange Rates screen where rates can be created, edited and deleted as required.

Allow Incomplete Period to Invoice Date—Whether the invoice can be calculated before the end of the quotation period. If unchecked and the quotation period is not finished, an error displays during invoice creation.

Note: This setting does not affect calculation of the line item on the invoice preview of the despatch order snapshot. The snapshot is calculated with any available prices in the price series for the quotation period, even if the quotation period has not yet finished.

Hedge Action—Name of the hedge action if the QP line has been hedged. Not applicable to QP lines within:

• Contract-level contract terms
• Contracts with analyte-based pricing

If the QP line has been hedged, the ellipsis (...) displays. Clicking this button opens the Hedge Action screen to edit the hedge position details.

Sync Hedge Action—Whether to synchronise the pricing of the hedge position. If selected, any change to the QP line's fixed price will be synchronised with the strike price of the hedge position, and vice versa. Not applicable to QP lines within:

• Contract-level contract terms
• Contracts with analyte-based pricing

Planned Hedge Date—Planned date of hedging. Used for reporting purposes only.