Summary:
This document explains the purpose, behavior, and usage of Cost to Serve Additive Bumps in Global Pricing Engine (GPE). Additive Bumps are used to apply rule‑driven percentage adjustments to pricing in order to account for additional cost‑to‑serve drivers and reduce margin leakage. The article also describes how to request Additive Bumps using the standardized Pricing request template.
Table of Contents:
What are Cost to Serve Additive Bumps?
When should Additive Bumps be used?
How do Additive Bumps work?
Can multiple Additive Bumps be applied at the same time?
How is the final margin calculated?
What calculation methods are supported for Additive Bumps?
How are Cost to Serve Additive Bumps requested?
What information is required in the request template?
Question #1: What are Cost to Serve Additive Bumps?
Answer: Cost to Serve Additive Bumps are percentage‑based adjustments applied in GPE pricing to account for costs that are not fully reflected in base pricing. They are designed to help resolve margin leakage by systematically incorporating additional cost‑to‑serve factors into pricing logic.
Question #2: When should Additive Bumps be used?
Answer: Additive Bumps should be used when specific business or operational conditions impact profitability, such as:
Order type
Payment terms
Day of the week
Vendor‑related constraints
Client system or pricing segment differences
These scenarios represent costs that vary by condition and need to be reflected through structured pricing adjustments.
Question #3: How do Additive Bumps work?
Answer: Each Additive Bump is defined by:
A bump type
One or more rules
A percentage value
When an order meets the conditions defined in a rule, the corresponding bump is applied. If multiple bump types are applicable for the same customer‑SKU combination, their values are added together to determine the adjusted margin.
Question #4: Can multiple Additive Bumps be applied at the same time?
Answer: Yes. Multiple Additive Bumps can be applied simultaneously as long as:
Each bump belongs to a different bump type
All rule conditions are met
Only one rule per bump type can apply, but multiple distinct bump types can be combined on the same order.
Question #5: How is the final margin calculated?
Answer: The final margin is calculated by adding all applicable Additive Bump percentages to the original margin.
Different types of additive bumps may be present and applied to a customer-SKU combination. In the above example:
The Order type bump type is loaded on the CUSTOMER1.
There is a condition for SKU1 that bumps for a certain Payment Term.
While on VENDOR1, Day of the Week bump is present – pricing is bumped depending on the day.
Pricing segment SEGMENT1 is bumped with a Client System type of bump.
If all conditions are fulfilled on an order, all the bumps will be added together:
New Margin = Old Margin + Contract Term bump + Payment Terms bump + Day of the Week bump + Client System bump
Example calculation:
Original Margin: 2.00%
Contract Term Bump: +0.12%
Payment Terms Bump: −0.20%
Day of the Week Bump: +0.03%
Client System Bump: +0.10%
Final Margin = 2.00% + 0.12% + (-0.20%) + 0.03% + 0.10% = 2.05%
Question #6: What calculation methods are supported for Additive Bumps?
Answer: Additive Bumps support two calculation methods:
Direct addition to the price rule margin
Percentage bump applied against the calculated price amount
These options allow Pricing to model different types of business logic depending on how the cost should affect pricing.
Question #7: How are Cost to Serve Additive Bumps requested?
Answer: Cost to Serve Additive Bumps are requested through a standardized Pricing request template provided by the Pricing Department. The template ensures that all required details and business context are captured before a bump is configured in GPE. Requests are reviewed and validated by Pricing or Revenue Management teams before being loaded.
Question #8: What information is required in the request template?
Answer: The request template requires the following:
Bump type
Bump value (percentage)
Applicable dimensions (for example: customer, SKU, vendor, pricing segment)
Business use case and intended outcome
Clear and complete information is required to ensure the Additive Bump is implemented correctly and consistently.
The info tab of the request template consists of short description of the fields to be filled out.
Question #8: How to use the Pricing request template?
Answer:
