Variable Cost Service Requests

Variable Cost Service Requests

Original Post:     Jesse Graham, Health Care Services Corporation
Looking to see how companies setup requests for variable cost sevices. We get a quote from a vendor as such:

| Service Order |   |   |   |   |   |   |   |   |   |   |
|   |   | Start | End |   | Term/Mo |   | Mo/Unit Price |   | Qty |   | Total |
|   | Service | 12/8/2012 | 7/29/2015 |   |        31.73 |   |                75.00 |   | 60 |   |   142,785.00 |
|   | Data | 12/8/2012 | 7/29/2015 |   |        31.73 |   |                15.00 |   | 60 |   |     28,557.00 |
|   | Dev | 12/8/2012 | 7/29/2015 |   |        31.73 |   |          1,115.00 |   | 1 |   |     35,378.95 |
|   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   | Total |   |   206,720.95 |

And then get the below Invoice:

| Invoice |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   | Months |   | Unit Price |   | Qty |   | Total |
|   | Service | 1/20/2013 | 7/29/2013 |   |          6.33 |   |                75.00 |   | 60 |   |     28,485.00 |
|   | Data | 1/20/2013 | 7/29/2013 |   |          6.33 |   |                15.00 |   | 60 |   |       5,697.00 |
|   | Dev | 1/20/2013 | 7/29/2013 |   |          6.33 |   |          1,115.00 |   | 1 |   |       7,057.95 |
|   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |   | Total |   |     41,239.95 |

Any help would be appreciated

Reply:                   Jared Mosqueda, Quest International Users Group
Jesse, I sent out this question to some people in the area of SCM and the response is below. If you have any further questions I'll be happy to provide contact information. Thanks! /// "We typically set up the dollar cost at $1, and then use the quantity to adjust the total. So in short, if we expect monthly charges of $50 for the year, then we would enter the PO with a $1 cost, and a quantity of 600. That gives the flexibility needed to manage the variable service costs. "