Consider"Interest earned during credit period" during "Weiging and Ranking"

Question

Dear SRM Experts,
In "Weighting and Ranking", for the comparison of bids,
suppose if we have to consider the interest gained during the credit period given by the supplier, could there be any solution?
Example:
If the supplier1 has quoted 100600 INR with u201C15 days credit as payment terms", then effective price would be 100393.29
If the supplier2 has quoted 100700 INR with "30 days credit as payment terms", then effective price would be 100286.16
Calculation Details:
Assumed Bank Interest, which purchaser's company would gain by the deiayed payment due to credit period offered by the supplier is 5%
Supplier1     
Quoted Price                                                 100,600.00
Credit Period in Payment Terms               15.00
Interest earned per day                                    13.78
Interest earned in Credit Period                       206.71
Effective Price Considering the Interest      100,393.29
Supplier2
Quoted Price                                                 100,700.00
Credit Period in Payment Terms               30.00
Interest earned per day                                     13.79
Interest earned in Credit Period              413.84
Effective Price Considering the Interest       100,286.16
Conclusion: Supplier2 is better though he has quoted more!
With Thanks and Regards,
Ganapathi

Answer 1

But for a commercial point of view,
1. Calculation of Interest gained during credit period
-  the credit period offered by the supplier and
-  the subsequent calculation of bank interest gained during credit period,
-  then to arrive at effective price, by deducting the gained interest...
(If the supplier is asking Advance, we have to add the interest lost in the replenishment lead time)
seems to be very important. Believe that is why most of the people negotiate for higher credit period with suppliers...
2. Conversion to Local Currency
3. Consideration of Import Freight Cost (or Local Freight, if local supplier)
4. Calculation of Custom Clearing Charge
5. Calculation of Local Freight charge (after custom Clearing)
6. Calculation of Bank Charges for doing payment to suppliers
7. Calculation of Non-Deductible portion of Duty/Taxes
I am an MM consultant, new to SRM... The above were the calculations which we used to practice for arriving at FINAL EFFECTIVE PRICE (in Excel out side SAP), when I was in domain, while preparing Quote comparison Statement.
Particularly, when
(1) some suppliers are international, some are local,
(2) The Credit period offered by various suppliers are different.
Rest of the points seems affordable except for the first point... request comments on first point...
Ganapathi
Edited by: Ganapathi Hegde on Jul 7, 2010 6:27 PM