STRATIX/Price

1. STRATIX/Price Options available to accommodate pricing strategies

2. STRATIX/Price • Provides for automatic calculation of: • Metal Price • Freight Charge • Miscellaneous Item Charges • Total Order Charges • Alloy Surcharge • Test Certificate Charges • Freight Insurance • Processing Charges and Costs

3. Benefits for Sales of Metal Pricing General Features • Suggests a metal price for Sales • Eliminates need to look up prices in printed books • Increases speed of customer service • Ability to vary prices by Customer and/or quantity sold • Contract Pricing with expiry date • Ability to adjust prices for seasonality Order Entry Features • Checks suggested metal price for price violations • Provides ability to change price by changing quantity bracket • Faster than manual changes • Encourage customer to order more to get a price break • Re-Price feature to get latest price book changes

4. Metal Pricing Features Price calculated using Price Basis and Metal Price Book Price Basis Features • Base price on Average or Replacement Cost, or Base Price • Corporate or branch based • Size & Dimension Extras • Accommodate market conditions with seasonality factors Metal Price Book • Customer specific or generic pricing available • Contract pricing • Quantity brackets

5. Selling Price Calculation

6. Price Basis • Starting point of Selling Price • Provides ability to base Selling Price on Replacement Cost, Average Cost, or Base Price • Can be configured by Customer or for all Customers

7. Price Basis Decisions Advantages • No set-up or maintenance required • Automatically maintained by STRATIX on real-time basis • More control over pricing • Consistent pricing • Repl. Cost can be used for inter-company sales, while Base Price is used for all other sales. Disadvantages • Unusually low Purchase Price may skew Average Cost • Less control over pricing • Inconsistent pricing • Set-up/maintenance required Average Cost Replacement Cost/Base Price

8. Price Basis Decisions Continued • Replacement Cost & Base Price can be defined by: • Material (with Extras) • Product • Corporate decision Material (with Extras) • Replacement Cost/Base Price equal to sum of Material Component &/or Size Extra &/or Dimension Extra Product • Replacement Cost/Base Price specific to Product & Dimension

9. Price Basis Decisions Continued Advantages • Decentralized • Branch-based • Changing Material component automatically changes all Repl. Costs/Base Prices Disadvantages • Centralized • Company-wide Material with Extras Product

10. Extras • Used to mark up Replacement Cost/Base Price based on Size and/or Dimensions of Product • Rate (Pcs, Lgth, Area, Wgt, etc.) or % Size Extra • Defined for: • Specific Size • Angles: 22316, 2214, etc. • Range of Numeric Sizes • Rounds: Up to 50, 60, etc. Dimension Extra • Specific Dimension, Range of Dimension, or All Dimensions

11. Example - Price Basis Calculation Price Basis = Material Price Base + Size Extra + Dimension Extra

12. Metal Price Book Features • Specific to a customer or generic for all Customers • Contract Pricing • Vary pricing by Customer with up to 10 Customer Pricing Levels • Vary pricing by Ordered Quantity with up to 20 Quantity Brackets • View MPB’s with upcoming Review Date • Pop-up Pricing Instructions for Sales • Facility to view missing price book entries

13. Obtaining Metal Price Book Record Once Price Basis is determined...

14. Scanning Metal Price Book Records • Most specific Record used given Customer & Product...

15. Calculating a Selling Price • Price Basis... • Marked up based on Customer Pricing Level… • And marked up based on Quantity Bracket... • Equals … Selling Price! • Price Basis1 can be either Replacement Cost, Base Price, or Average Cost.

16. Customer Pricing Level Markup Types • Marked-up based on Customer Pricing Level... • Price Basis1 can be either Replacement Cost, Base Price, or Average Cost.

17. Quantity Bracket Markup Types • Marked up based on Quantity Bracket… • Equals … Selling Price!

18. Quantity Brackets Continued • Variety of Units of Measure permitted • Lot, Units, Length, Area, or Weight • Based on Dimension Segregation • For example, Dimension Segregation “Length” can have Lot, Units, Length, or Weight, but not Area. • Alternate Unit of Measure • Used to promote Qty Bracket of Order Items that would otherwise remain in lower Brackets

19. Alternate Unit of Measure • Provides greater discount for Customers that order a Quantity low in Weight, but high in Measure • Uses higher Bracket between that of Quantity Bracket UM & Alternate UM • Typically used for tube products, which would otherwise remain in lower Brackets

20. Example - Alternate Unit of Measure • Small diameter Product (Low Weight/Foot) • Promoted to higher Quantity Bracket based on Ordered Measure.

21. Customer Pricing Profile • Specific pricing by Customer or generic for all Customers • Base Selling Price on Replacement Cost, Base Price, or Average Cost • Vary pricing by Price Category • Assign Pricing Level based on frequency of sale &/or quantities sold • Optional override of Pricing Level by Product Line • Establish Aimed & Min. Profit %’s • Per Sales Type - As Is, Processed, Bought For, etc.

22. Contract Metal Price Books • Defined for Customer & Full Product • Benefits of Contract Price • Various Units of Measure available for Contract Price (Pcs, Units, Lgth, Area, Wgt, etc.) • Ability to select Currency of Contract Price • Expiry Date & Next Contract Price provided • Selling Price = Contract Price marked up based on Quantity Bracket

23. Buyouts Selling Price calculation depends on Customer’s Metal Price Source & whether or not MPB is defined. • Customer Aimed Profit % • From Customer Pricing Profile • One per Sales Type (Maximum of 6)

24. Example - Product Marketing Factor • Used to increase/decrease Replacement Cost/Base Price based on current market conditions • Valid for a date range

25. Example - Product Marketing Factor

26. Resellers • Quantity Discounts available for Customers that are Resellers • Provide a lower markup for Customers that need to add an additional markup when reselling material Example • Given • Service center sells material to End User at 30% profit. • Result • Service center sells material to Reseller at 20% profit, allowing Reseller to make remaining 10% profit.

27. Material Price Base • Presents complete picture of Material Repl. Cost & Base Price • Applies when Material-based Method is used • Provides ability to add, review, modify, & delete existing Material Price Base records • Changes to Size & Dimension Extra Rates permitted

28. Order Entry Features • Price Violation • Re-pricing Functions • Gross-up Function

29. Price Violation Price Violation Types: • Book Price • Salesperson changes Book Price, & Selling Price < Min Price • Salesperson • Selling vs. Book Price>Salesperson’s Allowed Price Variance % • Profit • Item Profit % < Minimum Allowed % • Warning issued to Salesperson • Can be used to filter Inquiries & Reports

30. Re-pricing Functions • Re-price Order or Item due to parameter changes • Confirmation message provided to prevent accidental re-pricing Re-Price • Average & Replacement Costs recomputed • New Book Price computed • Other charges not impacted Re-Price All • Average & Replacement Costs recomputed • New Book Price computed • Automated Processing Charges re-priced • Other charges not impacted

31. Pop-up Re-pricing Function • Automatically asks user to Re-price Metal, Re-price All, or leave as is when any of the following is changed: • Ordered Quantity • What else?

32. Gross-Up Function • Used to increase Metal Price to Customer for piece of unusable metal remaining after processing is complete • Metal Price adjusted based on Dimensions of Product used to produce Dimensions of Product Sold