What is 'penalty threshold' in SAP LOD-ESO - Sourcing OnDemand?

penalty threshold - Overview

• Component: LOD-ESO

• Component Name: Sourcing OnDemand

• Description: The transaction volume that a master agreement must meet to avoid a penalty.

penalty threshold - Details

• 
  Key Concepts: 
  Penalty threshold is a feature of SAP LOD-ESO Sourcing OnDemand that allows buyers to set a threshold for the amount of penalty they are willing to accept when negotiating with suppliers. This feature helps buyers to ensure that they are not overpaying for goods and services, while also allowing them to negotiate with suppliers in a more efficient manner. 
  
  How to use it: 
  To use the penalty threshold feature, buyers must first set the threshold amount they are willing to accept. This can be done by accessing the “Penalty Threshold” tab in the SAP LOD-ESO Sourcing OnDemand interface. Once the threshold has been set, buyers can then negotiate with suppliers using this threshold as a guide. 
  
  Tips & Tricks: 
  When setting the penalty threshold, it is important to consider the cost of goods and services being negotiated as well as any potential savings that could be achieved by negotiating with suppliers. Additionally, buyers should also consider any potential risks associated with accepting a higher penalty threshold. 
  
  Related Information: 
  For more information on how to use the penalty threshold feature in SAP LOD-ESO Sourcing OnDemand, please refer to the official SAP documentation. Additionally, buyers may also find helpful information on how to negotiate with suppliers in order to achieve the best possible outcome.