Calculating ratings for objective criteria (step 3)

The third step that LN carries out in the calculate objective criteria ratings process, is the creation of rating records for each purchase order line in the Objective Ratings (tdpur8106m000) session.

In the Objective Ratings (tdpur8106m000) session, the ratings for all objective criteria are displayed. Also, the overall rating for the concerned purchase order line is displayed.

Calculation of overall rating purchase order line

The overall rating for the purchase order line is calculated as follows:

Overall rating purchase order line = sum (objective rating * weighting)

LN retrieves the weightings of the objective criteria from the Vendor Rating Parameters (tdpur0100m800) session. The weightings are recalculated to true percentages, which are taken into account.

Calculation of new objective criterion rating

Each time you add a new line, LN automatically updates the objective criteria ratings per business partner/criterion combination in the following sessions:

  • Vendor Ratings by Period (tdpur8102m000)
  • Vendor Ratings by Criterion (tdpur8102m100)

The new rating is the running average, which is calculated as follows:

NR = ((ER * EV) + (R * V)) / (EV + V)

NRNewly calculated objective criterion rating
ERRating for all existing purchase order lines of the purchase order, 
excluding the newly added line
EVTotal value of all existing purchase order lines of the purchase order, 
excluding the newly added line
RRating for the newly added purchase order line
VValue of the newly added purchase order line
Note

The value can be of the following types, according to the setting of the Weighting Method field in the Vendor Rating Parameters (tdpur0100m800) session:

  • Turnover
  • Piece Count
  • Order Lines
Update of total values

The total values (also called: running totals) of the three above mentioned value types, are also automatically updated when you add an order line. The total values are updated by business partner in the following sessions:

  • Vendor Ratings by Period (tdpur8102m000)
  • Vendor Ratings by Criterion (tdpur8102m100)

The total values of all three value types are always updated, regardless of the used weighting methods. So, if you have a hundred business partners in a specific period, three hundred running totals must be updated.

Note

Subjective criteria are not taken into account in the calculation of the objective criteria ratings and the overall rating per purchase order line. So, the overall vendor rating for each business partner per period can only be calculated after the subjective criteria ratings are also calculated.

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