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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

5231.0. "IEG Pricing" by 19584::JACOBI (Paul A. Jacobi - OpenVMS Development) Wed Apr 09 1997 17:54

    According to the following URL, the Internal Equipment Group prices
    equipment at list price, minus either 40% or 70%.  What is the
    reasoning behind this pricing policy?
               
    Wouldn't a fair internal pricing strategy be to base all prices on
    strictly cost, plus a small percentage to fund the services of IEG? 
    The Digital employee discount program at CompUSA is based on this
    pricing strategy, which sometimes results in cheaper pricing on some
    components.

    The excuse that I have heard is: "Don't worry about the internal price! 
    It's only 'funny' money!".  Perhaps this "funny money" is one of the
    fundamental problems at Digital.


    							-Paul


    http://cassidy.mro.dec.com/ieg/price.htm

IEG Discounts

     o ALPHA and VAX system part numbers and their respective CPU upgrade part
       numbers are discounted at 70%. (Note: Only the system CPU line item and
       any CPU upgrade line item is discounted at 70%). 
     o ALPHA and VAX options are discounted at 40%. 
     o Personal computers, PC CPU upgrades, PC options and all other options 
       are discounted at 40%. 
T.RTitleUserPersonal
Name
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5231.12082::LIONELFree advice is worth every centWed Apr 09 1997 18:308
Well, it would require that there be a separate database of "cost" figures
created, and this information is generally considered highly confidential
(on a "need to know" basis.)  The current system is easy to understand, based
on available data, and works.

Besides, how do you define "cost"?  Does it include engineering or labor?

				Steve
5231.2the real reason!PCBUOA::WHITECParrot_TrooperWed Apr 09 1997 22:024
    
    And don't forget the salary of the IEG VP!
    
    
5231.3CAMPY::ADEYPC Server...now there's an oxymoron!Thu Apr 10 1997 00:405
    re: Note 5231.0 by 19584::JACOBI "Paul A. Jacobi
    
    Maybe the discounted price DOES reflect cost + some small %! 8>)
    
    Ken....
5231.4DSC vs. MLPKAOM25::WALLDEC Is DigitalThu Apr 10 1997 13:1612
    re .1
    
    While I agree that you might not want the numbers to be widely known,
    there is a DEC Standard Cost for most (all) parts as well as the
    Maynard List Price...last time I checked anyway.
    
    r
    
    [I used to get a kick out of the price differential of a G727 grant
    card. I guess I'm showing my age here aren't I?]
    
    
5231.5SALEM::GAUVINThu Apr 10 1997 16:011
    So what was the difference on the G727 ???
5231.6IEG Says......26031::CARROLLThu Apr 10 1997 20:0751
    Let me see if I can give you a short answer to a complicated question!
    
    We (IEG) have in fact been approved for an enhancment to a legacy
    system (Focus/mach1) whereby with a July implementation (july 18th ?)
    we will change our pricing to STD COST plus an UPLIFT.   The major
    component of the uplift will represent what is referred to as OCOGS
    (Other Cost of Goods Sold) which we currently JV to each Business Unit
    on a Qtly basis.  The "X" factor (Uplift) will depend upon how we are
    able to get the enhancement done.  If we can use a table and segment it
    by BU by product we will (ie - the OCOG % on a PCBU Notebook is much
    higher than a Server); if we can just do it by BU we will; OR if we
    have to establish a "peanut butter" flat % for all producst we will.
    
    The key is the F/M1 resources -- there are NOT many left!
    
    We are able to do this for two reasons;
    
    1. with the delay in SAP (which is the new system the company is moving 
       to) we were able to get approval for this enhancement to a legacy
       system.
    
    2. with the advent of the IEG WEB SITE -- http://cassidy.mro.dec.com/ieg/
       we will be able to have pricing logic which will give you the NET
       IEG Price, which will be cost plus.  With the firewall this
       information should be secure!  The IEG WEB SITE will be the ONLY
       place to get pricing, as it will simply return NET IEG PRICE to you.
       (note: we are working with the WEB development group to enhance our
       web site so that you can enter multiple part numbers -- say up to 10
       at a time.)
    
    So much for the short answer, but we are in fact (and have been during
    the past few years) trying to address this issue.
    
    This information has been sent electronically to the members of the 
    Finance Standards Committee and I will be attending their meeting later
    this month, so I imagine the information will start flowing.  We are
    also working with the Web folks to see if we can provide assess to a
    prototype database for you folks doing budgets.
    
    As for the "VP of U.S. IEG" he is still poor. Being a net zero business
    any recoveries above and beyond STD COST, plus OCOGS, plus our pittance
    of a cost for my folks services, are liquated to Corporate.
    
    In conclusion, I hope that our efforts here, as well as the efforts
    expended on our Web site, indicate that we are trying to be responsive 
    to the needs of you -- our customers.    
    
    regards,
    Mike Carroll
    IEG US Operations
    
5231.7G727 how much?SCASS1::TERPENINGThu Apr 10 1997 21:211
    I remember the G727 too! How huch was it? Any body know?
5231.8It's foggy but...KAOM25::WALLDEC Is DigitalFri Apr 11 1997 12:4310
5231.9CATMAX::SKALTSISDebFri Apr 11 1997 13:283
    Was that the "Flip Chip"?
    
    Deb
5231.10LEXSS1::GINGERRon GingerFri Apr 11 1997 13:493
    Flip Chip was a trademark used for a whole line of modules, not for any
    one specific module. I think I still have the Logic Handbook for them
    in my 'historical' drawer.
5231.11Earlier than 11AOSG::MONTAGUEFri Apr 11 1997 13:5110
>                  <<< Note 5231.9 by CATMAX::SKALTSIS "Deb" >>>
>
>    Was that the "Flip Chip"?
>    
>    Deb

The flip chip is PDP8 and possibly earlier vintage. 

/jon

5231.13STAR::PARKESometimes pigeon, Sometimes statueFri Apr 11 1997 15:318
    Re .11
    
    Well, yes, I believe you are right PDP-8 guts were "flip chips".  I 
    remember, at Pitt, when we raided an 8 to get a couple of modules
    for an experiment we were doing on a "flip chip" rack (upgrade from
    the original logic module stuff).  If I remember correctly, the 8-guts
    were compatible.
    
5231.14Glad to know that a fix is in progressSTAR::JACOBIPaul A. Jacobi - OpenVMS DevelopmentFri Apr 11 1997 17:2915
    Mike,

    Thanks for your response in note 5231.6.

    The specific case that prompted this note was note 5218.56 which
    indicates that the markup on a Digital mouse is over 1000%.  Under the
    current system, an IEG discount of 40%, or even 70%, results in an
    internal price far above cost and above the price this is commonly
    available in local stores.  I hope the new pricing system will result
    in a more fair cost center charge.

    Good luck with the implementation!

    
    							-Paul
5231.15I really need to clean house this year!37030::FPRUSSFrank Pruss, 202-232-7347Sun Apr 13 1997 17:444
    I _think_ I have a carton of "flip chip" modules in the basement.  
    
    I know I stil have the pdp-8 power supply modified to support an s-100
    bus machine...
5231.16I'll take Pricing for $100.....26031::CARROLLMon Apr 14 1997 17:525
    For a minute I thought I had responded to the wrong note!  I will post
    a periodic update as we move closer to implementation.
    
    regards,
    Mike C