| Smoothing factor |  |
| One of the two methods to calculate the overall vendor ratings is Smoothing Factor. If the method is Smoothing Factor, you must define the factor in the Smoothing Factor field of the Vendor Rating Parameters (tdpur0100m800) session. ERP LN calculates the overall vendor rating per business partner as follows:

                               New overall vendor rating =

    (OR * OV * (1 - F)) + (PR * NV * F) /
    (OV * (1 - F)) + (NV * F)

                                     OR
                                     The existing overall vendor rating of the business partner.

                                     OV
                                     The value on which the old rating was based.

                                     NV
                                     The total value of the period. The value type is retrieved
    from the Weighting Method field of the Vendor Rating Parameters (tdpur0100m800) session.

                                     F
                                     Smoothing factor that is defined in the Vendor Rating Parameters (tdpur0100m800) session.

                                     PR
                                     The vendor rating for the newest business partner/period combination.
Example The existing overall vendor rating is 70%. The old value on which the existing rating is based is 8000 pieces. The Smoothing Factor is set to 0.8. The new value for the new period is 1000 pieces. The period rating calculated for the newest period is 85%. New overall vendor rating:
    (70 * 8000 * (1 - 0.8)) + (85 * 1000 * 0.8) / (8000 * (1 - 0.8)) + (1000 * 0.8) = 75%
Related topics To update overall vendor rating Moving average To calculate vendor ratings Overview of vendor rating |