Price Codes
Price units as used in contracts need to be coded first. This option provides the means for the company to specify what codes can be used e.g. PMT = Per Metric Ton, CPB = Cents per lb. These codes are necessary for the calculation of contract values where quantities and prices are expressed with no common units (e.g. a purchase can be done in USD per MT of a commodity being shipped in 50KG bags). A PCP code links, by way of a conversion factor, the MT units to the 50KG bag units, and is used to generate the correct contract value. The base for conversion is to 1 kilo e.g. PMT=.001, PLB = 2.20462
Example:
Purchase: 2,000 x 50BG (50 Kilo Bags) of X commodity
Price: 350 USD PMT (Per Metric Ton) of X commodity
In this case a PCP code = PMT = .001 conversion. The PCW weight code 50BG has a conversion factor of 50.
The contract value is calculated as 2000 x 50 x 350 x .001 = $35,000