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Tiered Pricing Calculator

  1. #1
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    Lightbulb Tiered Pricing Calculator

    Hello Everyone! I saw a few different tiered pricing formulas on this forum but I don't think they really had what I needed as far as I can tell. I have a tiered pricing sheet that I would like to create a formula for so that my team can simply enter in the desired qty (cell A1) and it spits out a dollar amount. The tiers go something like this:

    Tier 1: qty 500-1,000 = $15*A1
    Tier 2: qty 1,001-5,000 = $15,000+[(A1-1,000)*10]
    Tier 3: qty 5,001-10,000 = $55,000 + [(A1-5,000)*6]
    so on and so on until tier 7

    Would an if then statement be best? I just imagine it being a huge statement, so maybe there's a better way? Thank you in advance!!

  2. #2
    Forum Expert Pepe Le Mokko's Avatar
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    Re: Tiered Pricing Calculator

    Hi
    this technique is described at http://www.mcgimpsey.com/excel/variablerate1.html

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    Re: Tiered Pricing Calculator

    Deleting since I have an update on the next post. Sorry!
    Last edited by plora2003; 09-18-2019 at 04:23 PM. Reason: deleting since next post has an update.

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    Re: Tiered Pricing Calculator

    I think I'm getting there.. but I'm still coming up short. I changed the last section to just the dollar amounts:

    {15;10;6;4} and the number is almost correct, but it's over by about $30k. The marginal formula is going to charge the customer $15 for the entire qty, so let's say it's a quantity of 6k, all 6k will have $15 per item and then 1k-5k will be $10 per item, etc. I only need the first 1k items to be $15 each. I'm not sure this is the right formula?
    Last edited by plora2003; 09-18-2019 at 04:16 PM.

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    Forum Expert Pepe Le Mokko's Avatar
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    Re: Tiered Pricing Calculator

    Welcome to the forum

    Please attach a sample workbook (not a picture or pasted copy). Make sure there is just enough data to demonstrate your need. Include a BEFORE sheet and an AFTER sheet in the workbook if needed to show the process you're trying to complete or automate. Make sure your desired results are shown, mock them up manually if necessary.

    Remember to desensitize the data.

    Click on GO ADVANCED and then scroll down to Manage Attachments to open the upload window.

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    Re: Tiered Pricing Calculator

    Hey Pepe - I actually figured it out. I used a nested IF statement. So I put a table with the different formulas for each tier on a separate sheet and then using a nested IF called that table from my first sheet. Something like this:

    =IF(F15<500,Sheet2!A8,IF(F15<=1000,Sheet2!A9,IF(F15<=5000,Sheet2!A10,IF(F15<=10000,Sheet2!A11,IF(F15<=20000,Sheet2!A12,IF(F15<=50000,Sheet2!A13,IF(F15<=100000,Sheet2!A14,IF(F15>100001,Sheet2!A15))))))))

    The problem with the differential calculator is that the charges more than it should. If someone buys qty 10k of product, it will charge them discount level 1 for the entire 10k, discount level 2 for 5k of that 10k, discount level 3 for 2k of that 10k, etc. What a tiered discount normally does is charge you discount level 1 for 5k of the 10k, discount level 2 for the next 3k and discount level 3 for the next 2k.

    Does that make sense?

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    Re: Tiered Pricing Calculator

    A
    B
    C
    D
    1
    Qty
    Price
    Delta
    2
    0
    $ 15.00
    $ 15.00
    C2: =B2 -N(B1)
    3
    1,000
    $ 10.00
    $ (5.00)
    4
    5,000
    $ 6.00
    $ (4.00)
    5
    10,000
    $ 5.00
    $ (1.00)
    6
    20,000
    $ 4.50
    $ (0.50)
    7
    50,000
    $ 4.00
    $ (0.50)
    8
    100,000
    $ 3.50
    $ (0.50)
    9
    10
    Qty
    Price
    Avg Price
    11
    100
    $ 1,500
    $ 15.00
    B11: =SUMPRODUCT((A11 > $A$2:$A$8) * (A11 - $A$2:$A$8) * $C$2:$C$8)
    12
    200
    $ 3,000
    $ 15.00
    13
    500
    $ 7,500
    $ 15.00
    14
    1,000
    $ 15,000
    $ 15.00
    15
    2,000
    $ 25,000
    $ 12.50
    16
    5,000
    $ 55,000
    $ 11.00
    17
    10,000
    $ 85,000
    $ 8.50
    18
    20,000
    $ 135,000
    $ 6.75
    19
    50,000
    $ 270,000
    $ 5.40
    20
    100,000
    $ 470,000
    $ 4.70
    21
    200,000
    $ 820,000
    $ 4.10
    22
    500,000
    $ 1,870,000
    $ 3.74
    Entia non sunt multiplicanda sine necessitate

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    Re: Tiered Pricing Calculator

    What is the "N" in the first formula?

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    Re: Tiered Pricing Calculator

    N function returns a value as a number, and since B1 is text, it is "ignored" in the subtraction.

    see here for more info:
    https://support.microsoft.com/en-us/...a-29733d1278c9

    and try removing the N function and you will see the different result

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    Re: Tiered Pricing Calculator

    I am a newbie and can't even begin to make this sheet. anyone have that for me to copy?

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    Re: Tiered Pricing Calculator

    Since I don't know what Excel 10 is, I'll give you a method that will work with Excel as far back as I can remember.

    Look at VLOOKUP with the TRUE option. The value you are looking up ON should be sorted lowest to highest. The way VLOOKUP works with the True option is that if it finds an exact match, it uses the value in whatever column you selected. If it does not match it "falls up" to the next lowest value in the searched column and returns the value of the column you want to return.

    VLOOKUP is a powerful tool when working with stepped functions.
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    A picture is worth a thousand words, but a sample spreadsheet is more likely to be worked on.

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    Re: Tiered Pricing Calculator

    @mvirtue

    Administrative Note:

    Welcome to the forum.

    We are happy to help, however whilst you feel your request is similar to this thread, experience has shown that things soon get confusing when answers refer to particular cells/ranges/sheets which are unique to your post and not relevant to the original.

    Please see Forum Rule #4 about hijacking and start a new thread for your query.

    If you are not familiar with how to start a new thread see the FAQ: How to start a new thread
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