How do I add Rate Card and Step Cost transportation?

  • 30 December 2021
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How do I add Rate Card and Step Cost transportation?
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Have you wondered how you could model more accurately your supply chain?

Will you have to include Rate cards and Step cost for your transportation modes?

Here is a short tutorial on how to do it!

Step cost

The purpose of adding step cost functionality is to be able to create different drop size buckets where the cost per THU changes according to the volume you are sending. This type of transport can be used for primary, secondary, inter resource and direct transport. To create this type of lane you must first ensure that you have selected that option in your configuration wizard as shown below.

 

This will add a new sheet in your template called “Transport Step Cost Data”. This sheet looks very similar to the “Transport Cost Data” sheet you are probably more familiar with. In this new sheet you must also specify the name of the “Step” this can be a number or text; this will be shown in the app when the solution is given. There is also a column called “Cost is Incremental” here you must write all 0 if you do not want the cost to be incremental so if we use the example below, if you are sending 25,000 Units the cost per unit of all the 25,000 is 0.7 because it is in Step 2 of your step cost. If you select Cost incremental to be 1, then the same 25,000 units will have a different cost for the first 20,000 with a cost of 1.2 and the other 5,000 will cost 0.7.

In addition, you must create the appropriate lane in “Transport Cost Data” as shown below. There is no need to include any information on average drop size or any other cost since both values are already specified in the “Transport Step Cost Data”.

 

Rate Card

Rate cards are similar to Step cost, but we can specify a delivery range in units and in distance. It is possible to use only units or only distance as well as combining them. This type of transport must be enabled in the configuration wizard as shown below.

It is important to note that rate cards can only be used in secondary transport or direct transport. They can only be used for last mile transportation.

Remember if you are using different THU you must specify the THU you want to use in the configuration itself. Currently, rate cards unlike “step Cost” only have the option of one unique THU.

When you save your configuration and export the template you will see two additional excel sheets “Rate Card Data” and “Drop Size Customer Product Data”.

In “Rate Card Data” you will add the specific information with respect to your rate card. As you can see from the example below you can name your rate card bands any text or number you want. In addition, you will notice that the rate cards are differentiated by the mode of transport, this means that if you want to specify a “From Location” and “To Location” for a rate card you need to create a specific lane in the “Transport Cost Data” with the unique Mode of Transport, there is no need to add any cost or average drop size.

The other sheet you will see is “Drop Size Customer Product Data” this will appear instead of the usual “Customer Product Data” because it is the new way of defining the demand for each customer. When you look at the sheet there is a column called “Drop Size” where you will be able to specify the different amount of product per trip you deliver for a specific client. There is two ways of filling this information. If all the demand for a client and product is being delivered in one drop size, you need to put the drop size and the total demand in the demand column. You can also define as many drop sizes as you want per client and the amount of the demand covered by each drop size. Make sure the drop sizes that you include in your data are within the range of drop size you have specified in your rate card, you will get a warning in Data Validation if this is not correct.

In the example above you can see both options. White_Chardonnay has a total demand of 858,000 and it is being delivered in shipments of 286,000 units at a time. Red_Merlot has a total demand of 473,101 and it will be shipped in 2 trips of 200,000 units and one trip of 73,101 units.

It is important to notice that volume and distance are continuous values therefore the range you set must include all the possible values. For both Rate Cards and Step Cost you will see that “Upper Limit” or “Maximum Step” are equal to the “Lower Limit” or “Minimum Step” of the following range.

This is how you set up your transportation and demand if you wanted to use Rate Cards or Step cost, or both! 

If you have any further questions about this, please let us know in the comments below.


3 replies

Great documentation, thanks!


I am wondering whether it is possible - with respect to your rate card example - to define another THU such as litres for the customer demand (“Drop Size Customer Product Data”) while using another unit such as the defined bottles for the transport lane and rate card bands?

I am asking this because we frequently face the situation that clients define their demand in units (“each”) while the transport provider charges in kg. 

Best,
Tim

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Hi Tim!

Thanks for your message. The unit of measurement you choose in the rate card is independent of the one used in the Customer Demand. This means that in your example, it would be possible to give the demand in “each” and the rate card in Kg. However, have in mind that you can only select one unit of measurement for all the rate cards and you must specify it in the configuration.

When the unit of measure for the rate card is different than your base unit you will need to provide the equivalency in the “THU Product Data” sheet.

 

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Hi Catalina,

Thanks for the documentation!

I would like to know if in the 2nd image describing Step Cost: column name “step max capacity”, value is 50,000 or 25,000 (as given in description explaining transport step cost data and “Cost is Incremental” column)?

Best 

Saurabh

 

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