Question:
- What is a users Variance Limit?
- What is a Purchasers Variance Limit?
Answer:
The Purchase Price Variance Limit is a threshold that determines how much control a Purchaser has when editing the cost of items within the Procurement stage. Variance limits are affected by either a decrease or an increase in the cost of an item.
For example, if Pat has a variance limit of $50, and he is editing an item that costs $100 per piece, he will only be able to increase the value up to $150. This example references a dollar value variance, but the variance can also be set up using percentage limits as well.
If a percentage Price Variance Limit is set up, and the Purchaser has a limit of 10%, they can only edit orders up to 10% of the value of the item. In this case, if the cost of the item is $25.00 the user is only able to add or remove up to $2.50.
Tips!
- It's important to be aware of the prices and types of items that your company purchases when you are determining whether you will set up a percentage or a cash value limit. Either option will create greater limitations or freedom depending on the cost of the items.
- How to set or edit a Purchaser's price edit variance limit
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