Manage Contribution Margins - Business Opportunity

Explanation

This activity is used to make changes in the contribution margins in each of the business opportunity lines. When a business opportunity line is entered, the contribution margin is calculated by the system based on the part cost, prices and discounts.

By using Manage Contribution Margins dialog box, user can define the required margin and decide if the price or the discount should be adjusted in order to obtain the user-entered margin. If user selects the adjust price option, then the base price will be recalculated by the system in order to obtain the user-entered required margin. If user selects the adjust discount option, then the line discount percentage will be recalculated by the system in order to obtain the user-entered required margin.

If the sales price is 300 and part cost is 150 then the system-calculated contribution margin will be 50% in the business opportunity line. If user wants to reduce the contribution margin to 25%, then it can be done by either adjusting the price or the discount. If adjust price option is selected, then calculated price will be 200. If adjust discount option is selected, then calculated discount will be 33.33%.

Prerequisites

System Effects

Window

Business Opportunity

Related Window Descriptions

Business Opportunity
Manage Contribution Margins

Procedure

  1. Open the Business Opportunity window and search for the opportunity you want to view.
  2. Click the Opportunity Lines tab and select a line.
  3. Right-click and then click Manage Contribution Margins.
  4. The Manage Contribution Margins dialog box will be opened.
  5. In the dialog box, enter a value in the Required Margin and select if the price or discount should be adjusted in order to achieve the required margin.
  6. Click Calculate and see the adjusted prices or discounts based on the selected option.
  7. If you are ok with the adjusted prices or discounts, click OK to save and close the dialog box.