When you escalate a contract, Kube performs different tasks based on what charge types were selected for escalation and whether another scheduled task is taking place the same day. Price escalations coincide with the monthly posting task. For more information about the overall standard escalation process, see Standard Contract Escalation Scenarios.
This article describes scenarios if a Consumer Pricing Index (CPI) is applied and considered in a contract's price escalation. For more information about CPIs, see Adding a pricing inflation index (CPI).
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Pricing Escalation Scenarios with CPI
NOTE: All scenarios assume a current month of September, with a base escalation date of October 1st. This is not an exhaustive list of scenarios.
Scenario 1:
A CPI is created with a base percentage of 6% and a 2% adjustment.
The current standard escalation rate is 5%.
No updates are made to either the CPI or the standard escalation.
On September 25th the Monthly Posting scheduled task occurs. For more information about scheduled tasks, see Scheduled Tasks.
Kube checks the next escalation date. The next escalation date is October 1st.
Since the escalation is for the following month, Kube compares the standard escalation rate and the CPI rate.
The CPI rate is higher than the standard escalation rate.
Kube calculates and posts charges with the 8% (6% base + 2% adjustment) CPI escalation.
Scenario 2:
A CPI is created with a base percentage of 6% and a 2% adjustment.
The current standard escalation rate is 5%.
On September 10th, the CPI percentage is updated to a base percentage of 10% and a 1% adjustment.
On September 25th the Monthly Posting scheduled task occurs. For more information about scheduled tasks, see Scheduled Tasks.
Kube checks the next escalation date. The next escalation date is October 1st.
Since the escalation is for the following month, Kube compares the standard escalation rate and the CPI rate.
The CPI rate is higher than the standard escalation rate.
Kube calculates and posts charges with the 11% (10% base + 1% adjustment) CPI escalation.
Scenario 3:
A CPI is created with a base percentage of 6% and a 2% adjustment.
The current standard escalation rate is 5%.
On September 25th the Monthly Posting scheduled task occurs. For more information about scheduled tasks, see Scheduled Tasks.
Kube checks the next escalation date. The next escalation date is October 1st.
Since the escalation is for the following month, Kube compares the standard escalation rate and the CPI rate.
The CPI rate is higher than the standard escalation rate.
Kube calculates and posts charges with the 8% (6% base + 2% adjustment) CPI escalation.
On September 27th, the CPI percentage is updated to a base percentage of 1% and a .5% adjustment.
This update to the CPI is not considered for this escalation. Updates to the CPI or standard escalation rate must take place before the monthly posting scheduled task runs.