Example - Weighted Average with Return Score
A weighted average has been set up with the following factors:
- Appointed Time Score: 0.75
- Quality Score: 1.00
- Quantity Score: 0.50
- Return Score: 0.50
Increasing the weight of a criterion makes it more significant in the total score calculation. Conversely, decreasing the weight reduces its impact.
This examples includes a full return of a received item to show the results of a return in the Vendor Rating calculation.
Process Purchase Order and Receipt
Four items are purchased from a vendor for various quantities and promised receipt dates.
| Item | Quantity | Promised Receipt Date |
|---|---|---|
| Q-20003 | 100 | October 12 |
| Q-20004 | 80 | October 18 |
| Q-20005 | 50 | October 18 |
| Q-20006 | 10 | October 29 |
The order arrives with all items on October 18th, with some discrepancies: five and seven additional items were received of items Q-20003 and Q-20005, respectively, and Q-20006 had some extensive damage to the packaging.
| Item | Quantity | Promised Receipt Date | Arrival Date | Over-Receipt Quantity | Quality Rating |
|---|---|---|---|---|---|
| Q-20003 | 100 | October 12 | October 18 | 5 | F3 (product quality 100%) |
| Q-20004 | 80 | October 18 | October 18 | F3 (product quality 100%) | |
| Q-20005 | 50 | October 18 | October 18 | 7 | F3 (product quality 100%) |
| Q-20006 | 10 | October 29 | October 18 | F6 (packaging with serious defects 77%) |
Process Return Order
After receipt processing, it was discovered that the damaged packaging affected all units of item Q-20006 and a return order was posted for the entire quantity, using Return Reason Code DAMAGED, which has a Returned Quantity Score of 20.
Calculate Hard Criteria and Vendor Rating
After the Calculate Vendor Rating and Vendor Rating batch jobs are run, the hard criteria are calculated and shown in page 1 of the Vendor Rating report. An average return score as well as the average weighted scores are shown on page 2.
Total Score Calculation for Hard Criteria
The total scores of each hard criterion was calculated from the average of each hard criteria score for each item.
| Hard Criteria | Formula | Total Score |
|---|---|---|
| Appointed Time Score | (40+100+100+100) / 4 | 85 |
| Quality Score | (100+100+100+77) / 4 | 94 (rounded from 94.25) |
| Quantity Score | (100+100+90+100) / 4 | 98 (rounded from 97.50) |
| Return Score | (100+100+100+20) / 4 | 80 |
Total Score Calculation for Items
The score for each item is calculated as the Score x Weight / Sum of Weights: 2.75 (0.75+1.00+0.50+0.50) and then the sum of each score is calculated for the total score.
| Item | Appointed Time Score x 0.75 | Quality Score x 1.00 | Quantity Score x 0.50 | Return Score x 0.50 | Formula | Total Score |
|---|---|---|---|---|---|---|
| Q-20003 | (40*0.75 / 2.75) = 10.91 | (100*1.00 / 2.75) = 36.36 | (100*0.50 / 2.75) = 18.18 | (100*0.50 / 2.75) = 18.18 | 10.91+36.36+18.18+18.18 | 84 (rounded from 83.63) |
| Q-20004 | (100*0.75 / 2.75) = 27.27 | (100*1.00 / 2.75) = 36.36 | (100*0.50 / 2.75) = 18.18 | (100*0.50 / 2.75) = 18.18 | 27.27+36.36+18.18+18.18 | 100 (rounded from 99.99) |
| Q-20005 | (100*0.75 / 2.75) = 27.27 | (100*1.00 / 2.75) = 36.36 | (90*0.50 / 2.75) = 16.36 | (100*0.50 / 2.75) = 18.18 | 27.27+36.36+16.36+18.18 | 98 (rounded from 98.17) |
| Q-20006 | (100*0.75 / 2.75) = 27.27 | (77*1.00 / 2.75) = 28 | (100*0.50 / 2.75) = 18.18 | (20*0.50 / 2.75) = 3.64 | 27.27+28+18.18+3.64 | 77 (rounded from 77.09) |
Total Hard Criteria Score
The total hard criteria score is calculated from the average of all total scores:
(84+100+98+77) / 4 = 90 (rounded from 89.75)
Weighted Average Score for Hard Criteria with Returns
Page 2 of the Vendor Rating report shows the calculated weighted average scores for the hard criteria with a return.
Average of Return Score
The Average of Return Score averages the calculated Return Score in page 1 and Return Qty. Score from the return reason code in the return order. Therefore, the Average if Return Score of type receipt + Average of Return QTY Score of type return / 2. In this example, (80 + 20) / 2 = 50.
Average Weighted Score Calculations
The weighting score for each hard criterion is based on its average score and the weighting factor.
| Hard Criteria | Average Score | Weighting Factor | Formula | Weighted Score |
|---|---|---|---|---|
| Return Score | 50 | 0.50 | 50*0.50 | 25 |
| Appointed Time Score | 85 | 0.75 | 85*0.75 | 64 (rounded from 63.75) |
| Quality Score | 94 | 1.00 | 94*1.00 | 94 |
| Quantity Score | 98 | 0.50 | 98*0.50 | 49 |
Total Average Weighted Score
The total average weighted score is calculated from the average of all total scores based on the weighted factor:
(25+64+94+48) / (0.50+0.75+1.00+0.50) = 84
This is the score that will be used for calculating the total rating for the hard criteria.
Total Rating
The Total Rating score is calculated for the combination of the Hard and Soft Criteria scores, based on the corresponding weighting factors defined for the vendor.
In this example, the Hard Criteria score of 84 and Soft Criteria score of 90 are multiplied by the weighting factor, averaged, and then summed to calculate the total rating:
| Criterion | Calculated Score | Weighting Factor | Formula | Weighted Score |
|---|---|---|---|---|
| Hard | 84 | 5 | (84*5) / 7 | 60 |
| Soft | 90 | 2 | (90*2) / 7 | 26 (rounded from 25.71) |
Therefore, the total vendor rating is calculated as 60+26 = 86.
If there is only a hard or soft criteria rating, then that criteria will be used as the total rating, e.g., if no soft criteria was included, the total rating would be 84.
See Also
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