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--- price_generation [2024/01/08 16:10] – created lisa.maloney
+++ price_generation [2025/11/24 20:24] (current) – tina.robles
@@ Line 1: / Line 1: @@
 __**Price/Rate Generation**__
-When using price_sale, where we do price generation from sales data, we will generate prices for a timeframe based on the sale data that fits within that timeframe.
+The Price Sale tier employs automated price generation derived from sales transaction data. Prices are calculated for defined timeframes based on sales data occurring within those periods.
-It is configured using Price Generation Period Type (week, month, quarter). When generating the price, we also have the Price Generation Strategy (average, min, max) that will do a weighted average (based on volume) or use the min/max price seen in that timeframe. We generate two different prices (with and without freight) to handle FOB/Delivered.
+**Price Generation Period Type**
-The Price Generation Look-back Period is not used when generating prices, and we will not fill in months with no sales with fake price data. Instead, we use that configuration to "look back" N periods to see if there is a valid price from the past that could be used. Average Sale Price Change Tolerance is used to not recalculate the price for a period if some new sales data came in that may change it a fraction of a percent but wouldn't actually change the calculated price. Sales that would change the price by more than the configured percent will cause the current price for that timeframe to be invalidated, and a corrected price put in its place.
+Defines the temporal granularity for price calculation:
+  * Week
+  * Month
+  * Quarter
+**Price Generation Strategy**
+Determines the calculation methodology applied to sales data within each period:
+  * Average: Calculates a volume-weighted average price
+  * Minimum: Applies the lowest price observed during the period
+  * Maximum: Applies the highest price observed during the period
+**Freight Handling**
+The system generates two distinct price points to accommodate different shipping terms:
+  * Price excluding freight (FOB pricing)
+  * Price including freight (Delivered pricing)
+-----
+**Price Generation Look-back Period**
+__Function__: Enables the system to reference historical pricing when current period data is unavailable.
+__Behavior__:
+  * Does not influence price calculation for periods with active sales data
+  * Does not populate periods lacking sales data with interpolated or estimated prices
+  * Searches backward N periods to identify the most recent valid price for application
+**Average Sale Price Change Tolerance**
+__Function__: Establishes a threshold for price recalculation to prevent unnecessary updates from marginal data changes.
+__Behavior__:
+  * Below Threshold: New sales data causing price variations within the configured tolerance percentage will not trigger recalculation
+  * Above Threshold: Sales data resulting in price changes exceeding the tolerance percentage will invalidate the current period price and generate a corrected value
+**Calculation Example**
+Configuration Assumptions:
+  * Period Type: Monthly
+  * Product: 5432
+  * Company: XYZ
+  * Sales Data Timeline:
+April 5: Sales transaction recorded at $10.00/case
+April 15: Delivery date on claim (claim processed in May)
+April 25: Sales transaction recorded at $20.00/case
-So, assuming that the Period Type is configured as 'monthly', let's say we have sales data for product 5432 and company XYZ that came in on April 5th at $10/cs, we have a claim that came in with a delivery date of the 15th (actual claim arrived in May), and we have extra sales data for the same product/company that came in April 25th at $20/cs. We are going to use the configured strategy to generate a price, and it will take into account the data from the 5th as well as the 25th.

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