As purchase order and PO requisition lines are created on the system, StreamV calculates a “target cost” for each line item and it defaults this target cost into each purchase order line.
The target cost calculation is based on the Vendor that the PO is being placed with, the item and quantity that is being ordered, and an optional contract number that can be specified by the operator.
This information is used along with your inventory data and the vendor pricing data that has been entered into various files in your system to determine the best or lowest price (cost) for the item and quantity being ordered from the vendor.
The Target Cost that is calculated by the purchasing system is the recommended price for the PO or Requisition line and it can be accepted or over-ridden as required by the operator placing the PO. Each Purchase Order line stores a Price Source field that indicates where the price for the PO was obtained. The valid values for the Price Source field in the Purchase Order Line Item file are listed in a later section of this document.
The Target Cost calculation used by the Purchasing System makes use of the information entered into several different database files in the system. The following sections describe the data used by the calculation and the different sources from which a price for a purchase order line or requisition can be obtained.