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Pricing & Margins Workflow

Pricing is the strategic layer that sits on top of technical costing. It transforms the "Cost to Manufacture" into a "Price to Customer" based on business objectives and market conditions.

The Cost-Price Separation

One of the core design principles of CostEngine is the absolute separation of cost and price. - Costing: Deterministic calculation of material, labor, and overheads. - Pricing: Strategic application of margins, discounts, and payment terms.

Margin Scenarios

CostEngine allows estimators to generate multiple pricing scenarios for every quote, helping them understand the trade-offs between volume and profit.

Standard 3-Scenario Model

By default, the system generates three scenarios:

Scenario Margin % Logic Use Case
Base 25% Cost * 1.25 Standard profitable quote
Aggressive 15% Cost * 1.15 High-volume тендер or strategic account
Safe 35% Cost * 1.35 Low-volume or high-risk trial part

Price Buildup Formula

The final selling price is calculated as:

\[ \text{Selling Price} = (\text{Total Mfg Cost} \times (1 + \text{Margin \%})) + \text{Packaging} + \text{Freight} \]

Pricing Influencers

Beyond a simple margin percentage, several factors can influence the final price in the workflow:

1. Payment Terms

Delayed payments (e.g., Net 90) increase the cost of capital. - System Action: If payment terms > 30 days, apply a "Cost of Capital" surcharge (default 1.5% per extra month).

2. Customer Grade

Strategic customers may have pre-negotiated margin caps. - Example: "Level A" customers always get a 12% margin priority.

3. Quantity Breaks

Economy of scale impacts both cost and price. - Logic: Setup costs are amortized better at higher quantities, allowing for more aggressive pricing.

Pricing Approval Workflow

To protect margins, pricing below a specific threshold triggers an automated approval request:

graph TD
    User[Estimator Sets Margin] --> Check{Below Floor?}
    Check -->|No| Publish[Generate Quote PDF]
    Check -->|Yes| Notify[Notify Sales Manager]
    Notify --> Approval{Approved?}
    Approval -->|Yes| Publish
    Approval -->|No| User

Quote Output

The selected scenarios are displayed on the PDF Quote, allowing the customer to choose the volume/price combination that fits their needs.