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Complex Pricing formula

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  1. #1
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    Complex Pricing formula

    Hi guys,

    About ready to jump off a cliff. Here is the scenario. I need to build a formula in excel that calculates the cost for software license. I need to take into consideration two factors, users and assets of the company I am licensing to.

    I have 5 tiers of Assets for companies (in millions):
    0-100
    100-300
    300-600
    600-1,000
    1,000+

    I have several pre-determined allotments of user:
    5 user license
    10 users
    25 users
    50 users
    100+ users

    At these price points I need to ensure I am hitting these marks.(or close to them)

    5 user @ 100 mil = $12,000
    10 user @ 300 mil = $24,000
    25 user @ 600 mil = 42,500
    50 user @ 1 bil = 60,000
    100 user @ 1 bil + = 125,000

    I need to make this flexible, so in other words,

    Company A is 100M in assets and wants 10 users..
    Company B is 290M in assets and wants 10 users.
    Company C is 200M in assets and wants 10 users.
    I want to ensure that it’s a sliding scale, so Company A would pay less than Company B and Company C would be right down the middle. This is true for all the tiers...

    I have been playing with Progressive pricing models and using an array to try and calculate this, but I keep hitting brick walls.

    so in A1 I want to be able to put in the desired user count
    and in A2 want to be able to put assets for company in Million (290,000,000 = 290 in A2)
    and then in A 3 gives me the sliding scale price I should be charging.

    Another example:

    Company A is 99 Mil in assets and wants 5 user licenses, should be very close to 12k. If I then put in 110 Mil company and 5 user license, would be just slightly more.

    Not sure if this is helpful, but the price per user cost at the levels I mentioned above are:

    Assets:
    1-100 @ 2400 per user @ 5 users
    100-300 @ 2400 per user @ 10 users
    300-600 @ 1700 per user @ 25 users
    600-1000 @ 1200 per user @ 50 users
    1000 + @ 1200 per user @ 100 users

    I hope this is clear enough and please feel free to correct any logic issues and/or best practice for the formula. Thanks for your help in advance and look forward getting some good help before I go completely insane.

    Thanks, Jon

    Attached Files Attached Files
    Last edited by bunchesinoz; 05-20-2010 at 09:18 AM. Reason: Updates and upload

  2. #2
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    Re: Help with Complex Pricing formula - PLEASE HELP ASAP!

    Hi Jon,

    Your thread title does not conform to forum rules so please modify it.

    Also kindly upload a sample file always for quicker response

  3. #3
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    Re: Help with Complex Pricing formula - PLEASE HELP ASAP!

    Quote Originally Posted by veejar View Post
    Hi Jon,

    Your thread title does not conform to forum rules so please modify it.

    Also kindly upload a sample file always for quicker response
    File Uploaded, good luck making sense of my pathetic attempt at using two arrays.

    I spent 10 minutes scanning FAQ's on what format was accepted and could not. Very useful if you could direct me to this information.

    Thanks, Jon

  4. #4
    Forum Expert shg's Avatar
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    Re: Complex Pricing formula

    You could start with a lookup table with assets down the left side, number of licenses across the top, and unit license price in the body. Then you could do either a lookup or interpolation as desired.
           -J-- -K-- -L-- -M-- -N-- -O-- -P--
      17           1    5   10   25   50  100
      18      0 ???? ???? ???? ???? ???? ????
      19    100 ???? 2400 ???? ???? ???? ????
      20    300 ???? ???? 2400 ???? ???? ????
      21    600 ???? ???? ???? ???? ???? ????
      22   1000 ???? ???? ???? ???? 1200 1200
    Entia non sunt multiplicanda sine necessitate

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