1. Line Collection Setup Guide
  2. Product
  3. Asset Billing Rate
  4. Asset billing Calculations
  5. Tiered Rate Calculation

4.7.3.4 Tiered Rate Calculation

In Tiered Rate calculation, system selects the Asset Billing Rate Details using the Billing Points at Asset and other asset parameters and calculates the transaction amount by deriving the rate from Tiered Rate table.

Transaction Amount = (Tiered Rate) * (Tiered Points / Base Points)

For example, if an Asset has 1.5 million points and the range is maintained as - for first million points rate=0.66 with Base Points =1000 and for remaining points rate=0.60 with Base Points = 1000, the Transaction Amount = 1million * (0.66/1000) + 0.5 million * (0.6/1000) = 660 + 300 = 960.

Note the following:

  • If the range for specific points are not maintained correctly, the same is considered as 0 rate and in-turn the Transaction Amount derived also becomes 0.

    For example, if Billing Points are 8000 but if range maintained points is from 10000 with Rate = 0.55 and Base Points = 1, the transaction amount results as (0*(8000/1) =0).

  • Rate is adjusted based on Frequency and Billing Cycle as mention in Rate Method.

Parent topic: Asset billing Calculations