What is the difference between Standard and Baseline cost? Follow

Within your organization’s LevaData administrative settings, you can configure either a Standard Cost Key (with multiple variable options) or maintain a Baseline Cost that reflects the target cost from a specific reference period.
The LevaData Platform is designed to mirror how your organization tracks and manages part-spend data, providing flexibility to align with your internal cost-accounting methods.

Standard Cost

The Standard Cost is typically provided by your organization’s Finance team on a recurring cadence for each part.  This data is uploaded into the LevaData Platform by our Customer Data Quality team, ensuring that part-level reference costs are properly recognized in the backend.

The Standard Cost serves as a reference point for calculations such as Savings awareness and can be viewed under:

Spend Intelligence → Savings Awareness → View Spend and Savings Detail

In the example above, the previous quarter’s (2023 Q4) CPN and MPN costs become the current quarter’s (2024 Q1)

• CPN Standard Cost
• MPN Baseline Cost

Note: The CPN Standard Cost appears as CPN Global Level Reference Cost (Per Unit).

If your organization has both Standard and Baseline costs configured, you can toggle between them within Savings Awareness:

This toggle changes how CPN and MPN savings are calculated for your tenant:

[
(\text{Baseline or Standard Cost} - \text{Current Cost}) \times \text{Demand}
]

Configuring a Standard Cost Key

Your organization can define a Standard Cost Key at a unique level using any combination of the following variables:

• CPN (Customer Part Number)
• CMODM (Contract Manufacturer / ODM)
• MPN (Manufacturer Part Number)
• Manufacturer
• Supplier

Baseline Cost

The Baseline Cost represents the reference cost from a defined historical period, most often the last quarter of the previous fiscal year (Baseline Quarter).
It serves as the cost baseline used in savings calculations.

Priority Definition of Baseline Cost for a Part

1. If a Standard Cost exists → it becomes the default Baseline Cost.
2. If no Standard Cost but a Predecessor Part exists → use that part’s Standard Cost.
3. If no Standard Cost for the predecessor → use its Baseline Quarter cost.
4. If neither exists → use the configured Baseline Quarter.

Note: Some organizations define a Baseline Quarter other than Q4, depending on their fiscal policies.

Baseline Savings

Savings calculations are based on the reference Baseline Quarter cost.

[
\text{CPN Savings} = (\text{CPN Baseline Cost} - \text{CPN Current Quarter Cost}) \times \text{CPN Current Quarter Demand}
]

[
\text{CPN Spend} = \text{CPN Current Quarter Cost} \times \text{CPN Current Quarter Demand}
]

[
\text{CPN Savings %} = \frac{\text{CPN Savings Amount}}{\text{CPN Spend Amount} + \text{CPN Savings Amount}}
]

Example Calculation

Baseline Quarter: 2023 Q4
CPN: Cable_CPU
Baseline Cost (2023 Q4): $39.475462
Current Cost (2024 Q2): $36.251815
Current Demand (2024 Q2): 135,000 units

[
\text{CPN Savings} = (39.475462 - 36.251815) \times 135{,}000 = 435{,}192
]

[
\text{CPN Spend} = 36.251815 \times 135{,}000 = 4{,}893{,}995.03
]

[
\text{CPN Savings %} = \frac{435{,}192}{4{,}893{,}995.03 + 435{,}192} = 8.17%
]

Spend Awareness Detail Example

[
\text{CPN Demand} = 25{,}000 + 110{,}000 = 135{,}000
]

[
\text{CPN Spend} = 885{,}925 + 4{,}008{,}070 = 4{,}893{,}995.03
]

Conclusion

We hope this example clarifies how costs and savings are calculated across the LevaData Platform.
If your organization requires an alternate cost or savings structure, please reach out to us and we’ll help configure your tenant accordingly.