Telus TPM Documentation
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Probable Exposure Explained
Probable Exposure is the amount of dollars you'll need to set aside to pay for everything you've offered in the contract. The easiest way to explain is with a simple example where you offer $2/case and the Estimated Quantity of cases they say they'll buy is 100 cases. This means you need to be prepared to pay out $200(100 x $2/case). This doesn't mean you will pay this out. The contractee might only buy 50 cases…or might buy 200 cases.
Here's how it works:
We'll use this screenshot as the example. There are 5 scenarios below:
Scenario 1: Here the estimated cases are 100 and the direct rebate is $1 so it's a simple 100 x 1 = $100. Scenario 2: Similar to scenario 1 above but this is a deviated rate through the distributor. No difference though since you're still giving a fixed rate so 100 estimated cases x $2 = $200 Scenario 3: Here you're giving a deviated price. Since the default price your Admin set up for this product is $42.40 (see picture directly below) and you want to give your customer this case for $40.00, the formula takes the difference of the two and then multiplies by estimated quantity. So in this case it's $42.40 - $40.00 = $2.40 and then $2.40 x 100 = $240. Scenario 4: Here you chose the Value Type of Percent and have a 5% rebate set up. Since the product has a Default Price of $30 your rebate would be 30 x 5% = $1.50. $1.50 x 100 estimated cases = $150 in Probable Exposure. Scenario 5: Growth Program. Please see below for a more defined explanation of how Growth works with Probable Exposure.
Scenario 3 pic. Use this when reading through scenario 3 above.
Scenario 5 pic: Helps explain how Growth and Probable Exposure work together.
We're done with SKU based Probable Exposure, now onto Lump Sum which is very simple. Your Probable exposure in this area is exactly what you type in as the amount(s) of each Lump Sum payment.
Finally, if you look at the Exposure area in the Contract Header, you'll see it's summed up for you at the contract level now. So in this example, you should be prepared to spend $4,542.25 on this contract in rebates and Lump Sums.
The Contract Header will display Exposure, Actuals and Remaining Dollars for the Contract. This is broken out at the Product and LumpSum levels as well as displaying the Total for the Contract. The Actuals displays the dollar amounts for Products and LumpSums claimed against the Contract.
There are a few instances in which probable exposure cannot be calculated at the row. In these instances, there will be a warning displayed in the contract header.
The reasons probable exposure can't be calculated are as follows:
The row is a product grouping and there are products without a conversion factor to the contract UOM.
The row is a product grouping and there are products in the group without a default price value and the contract has a Deviated or Direct Type of Fixed Price or is set up as a Percent.
The row is a product and is missing default pricing and has a Type of Fixed Price.
The row is a product and is missing default pricing and is set up as a Percent.
