Grower Contract Management (GCM) - Worked Examples

Supported Settlement Calculations

Below are a number of examples that demonstrate how different features of M3 Business Engine can be used in the settlement process for a Grower Agreement. The results can be used to display information online and/or in the settlement document. They can also be used as part of the price calculation when setting up the module elements in 'Costing Element. Open' (PPS280). The examples are based on a processor buying grain from growers.

For all examples mentioned, attributes must be connected to the Item via an Attribute Model or via a Quality Specification. Costing elements must be connected to a Costing Model that again is connected to the Agreement Line.

A task can be solved in different ways using different combination of Attributes, Matrixes, Formulas, Custom fields and Costing Elements. It is important to remember that one tool can provide information to another tool, where the required information is not available. For example, although there is no option to use Custom field information from agreement in a matrix lookup, a custom field can be used in a formula, that again can be used as a matrix selection column.

1. Calculate quantity at basis dry weight from received quantity

This example describes how to calculate theoretical dry weight of grains based on the received weight, the measured water content, and pollutions in the received batch of grain. The formula that is used is:

Quantity Basis Dry Weight = (Delivered Quantity – (Deliver quantity * (100-%foreign objects)/100) * (100 – water content %)/(100-basis water %)

  1. Pre-requisite configuration:

    • A numeric attribute to hold measured water content percentage is created in ‘Attribute. Open’ (ATS010). It is recommended that this is a quality controlled attribute.
    • A numeric attribute to hold measured pollution and foreign object weight or percentage content is created in ‘Attribute. Open’ (ATS010). It is recommended that this is a quality controlled attribute.
    • A formula to calculate dry weight using the received weight, minus the weight in the attribute for foreign objects, and, reduced by the value held by the attribute for water content, is created in ‘Formula. Open’ (CRS570).
    • A numeric attribute to hold the calculated dry quantity is created in ‘Attribute. Open’ (ATS010). The dynamically calculated option must be selected for the attribute.
    • The default value for the attribute for dry quantity is set to the formula created in ‘Attribute Matrix. Enter Default Values’ (ATS030).

  2. Inputs:

    • Quantity received on purchase order, captured in ‘Purchase Order. Receive Goods’ (PPS300).
    • Test result of water content, captured in ‘M3 QI Test Results. Open’ (QMS400).
    • Test result of pollution, captured in ‘M3 QI Test Results. Open’ (QMS400).

  3. Outputs:

    • The formula can be used as a quantity factor in a price calculation using the costing operators 15 "Price per calculated quantity", 26 "Minimum price" and 27 "Maximum price.
    • The attribute for calculated dry quantity can be used for informational purposes in the settlement document and online in 'Purchase Order. Connect Charges' (PPS251).
    • The attribute for water content can be:
      • Used as matrix lookup in example 2.
      • Included in the settlement document when included in the Settlement Printing Model.

2. Price deduction for drying grain to standard water content

This example describes how to register price deduction where the water content is higher than the basis water content. The example uses the result of the "calculation of quantity to basis water" content.

The grower will get a price deduction based on a table lookup using water content percentage rounded to 0.5%. Deduction is: Quantity Basis Dry Weight * result of table look-up. The table to look-up differs per item group. The table below is an example of price deduction per weight unit dependent on water content in percent.

Water Content Markup
15,5 -3,5
16,0 -4,5
16,5 -6,7
17,0 -8,7
17,5 -14,4
18,0 -16,7
18,5 -20,5

  1. Pre-requisite configuration:

    • A formula using the attribute for water content is created to calculate water content and rounded to the nearest 0.5%.
    • A numeric dynamically calculated attribute is created using the formula above as the default value.
    • A matrix per item group to hold the markup per half percent water content is created. The matrix should use the attribute above as selection key.
    • A formula per item group is created, returning the value from the matrix, for the same item group.

  2. Inputs:

    • Quantity received on purchase order, captured in 'Purchase Order. Receive Goods’ (PPS300).
    • Test result of water content, captured in ‘M3 QI Test Results. Open’ (QMS400).
    • Updated price markup in matrixes, captured in ‘M3 QI Test Results. Open’ (QMS400).

  3. Outputs:

    • The formula returning the matrix can be used as a formula in costing markups in ‘Costing Element. Enter Values’ (PPS282).
    • The costing element should use item group as cost distribution key in ‘Costing Element. Open’ (PPS280/E).
    • The costing element should use costing operator 15 and the formula for calculating basis dry weight as quantity.

3. Correction of bulk density based on water content.

This example describes how to calculate corrected bulk density based on water content. The corrected bulk density is calculated using bulk density for basis dry weight, corrected by a weight table for different intervals of water content. A matrix per grouping is required where the correction depends on any kind of product grouping. The table below is an example of this:

Water content less than Weight correction
15,5 0
16,0 1
17,0 2
18,0 3
19,0 4
20,0 5
21,0 6
22,0 7
23,0 8
24,0 9
25,0 10
26,0 11
greater than 26 12

  1. Pre-requisite configuration:

    • A matrix holding the weight correction is created. The matrix should use the attribute for water content as selection key and the Value in range parameter set for the lookup to the correct water content interval.
    • A formula is created that returns the calculated bulk density, based on the base bulk density and corrected with the value from the matrix for the same item group.
    • A numeric Dynamically calculated attribute is created for the corrected bulk density using the formula above as default value.

  2. Inputs:

    • Test result of water content, captured in ‘M3 QI Test Results. Open’ (QMS400).
    • Updated values in the weight correction matrix, captured in 'Selection Matrix. Open' (PDS090).

  3. Outputs:

    • The formula returning the matrix can be used as formula in costing markups in ‘Costing Element. Enter Values’ (PPS282).
    • The costing element should use item group as cost distribution key in ‘Costing Element. Open’ (PPS280/E).
    • The costing element should use costing operator 15 and the formula for calculating basis dry weight as quantity.
    • The attribute for bulk density can be included in the Settlement Document when included in the Settlement Printing Model.

4. Calculation of interest based on delay in settlement calculation.

This example describes how to add interest to a settlement when the duration from delivery to settlement has passed an agreed number of days.

  1. Pre-requisite configuration:

    • A custom field is connected to the agreement via the supplier, stating number of days allowed before a settlement should be done.
    • A custom field is connected to the agreement via the supplier stating the interest rate.
    • A formula is created that returns the interest percentage in the custom field, where the calculation of current date minus received date is greater than the allowed date given in the custom field.

      A cost element of type 06 is created – % of net/net so far - using the above formula as costing markup.

  2. Outputs:

    • A possible price line in the settlement for delayed settlement interest.