Master Data Tolerance Schedule



Overview

Commodity materials quantities delivered between counter parties will vary due to loading/unloading, moisture, etc. Therefore, the system provides a tolerance schedule to allow acceptance of the delivered materials to be within a range using either a percentage or absolute value. The tolerance schedule also provides the ability to apply either a premium or discount to the delivered quantity which is over or under the contracted quantity. Based on the tolerance type defined in the contract, the assigned tolerance schedule shall be evaluated during application.

The tolerance schedule can be configured with the following statuses: draft, released, and retired.

Definitions

The tolerance schedule is used to define the quantities which are allowed to be over and/or under the contracted or delivered quantity allowed towards fulfillment of the contract. The tolerance schedule is also dependent on the tolerance type used during definition. The tolerance type enables the counterparties a qualifier that determines when the assigned tolerance schedule is evaluated, e.g. per delivery, per delivery period or per contract.

Tolerance Type – how tolerance schedule is evaluated

• Per Delivery: Tolerance schedule rules apply for the quantity applied to the contract for a given load. If this type is selected in the contract, an expected delivery quantity must also be defined, against which the actual load quantity can be evaluated.

• Per Delivery Period: Once the last load to apply to the delivery period has been identified, tolerance schedule rules shall be evaluated against the quantity assigned to the delivery period, even if there had been multiple deliveries.

• Per Contract: Tolerance schedule rules apply to all of the line items of a contract, for the same commodity.

The tolerance schedule provides the following fields for determination:

• Direction (Under/Over-fills): Defines whether the schedule line is applicable for an underfill or an overfill.

• Percentage: Percentage of the expected quantity up to which the under/overfill may be applied.

• Absolute Value: Absolute quantity of the under/overfill that can be applied. This quantity must be in the same unit of measure as the contract.

• Tolerance is Higher/Lower of Percentage or Value:
  *Usually tolerance is defined as a percentage of an expected quantity or an absolute quantity. If both a percentage and a quantity value are defined, this column states whether the lower or higher of these two limit values is applicable. If this value is used in a schedule, only one underfill and one overfill line may be defined in the schedule. In both master data and at a contract level, validation is required to ensure that multiple schedule lines are not defined if a lower or higher of these two limit values is to be used.

Price Application (Flat or Tiered): Definition of how the price will be applied.

• Flat will apply the same price within the defined range for the under/overfill quantities.

• Tiered will apply the price dependent on the defined range according to the under/overfill quantities.

Replacement base price: The underfill or overfill quantity could be settled at contract price or at a negotiated price.

• Contract Price: The price of the under/overfilled quantity would be the same as the price determined for the remainder of the delivered quantity. If pricing lots are not fully priced, a provisional price is retrieved for the non-fully priced lots.

• Negotiated Price: The price to be applied for the under-overfill quantity must be negotiated by the buyer and seller.

• Consumption Rule (Weighted Avg Price/Last Pricing Lot Consumed): This is only applicable for overfills. In this case, the price for the overfill quantity would be based on either a weighted average of the prices in the pricing lots consumed by the delivery or the price of the last consumed pricing lot (based on the rules for pricing lot application and consumption).

  Screen Views Tolerance Schedule

  
  

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