Fairmarkit can automatically attempt to detect and flag outliers, or supplier responses that seem incorrect or out of normal range. Once flagged, the values are suppressed in your reporting. In some cases, outliers may still need to be manually reported, so continue to review any values that do not look correct.
When are responses flagged?
Supplier responses are reviewed and flagged for outliers when an event moves to Closed status. They are reviewed again when an event is reopened and closed.
Opened events: Because outliers are not flagged until an event is closed, outlier values could appear on any high savings reports when the event is still opened.
How are outliers calculated?
Outliers are calculated at the quotation level (individual line items are not reviewed and flagged) when the event is closed. Any supplier response that exceeds 90% savings is flagged as an outlier.
Benchmark price on all items
If a benchmark price is included for all items on the event, the supplier responses are compared the benchmark price, and any supplier response that exceeds 90% savings is flagged as an outlier.
Benchmark price not included
If the event does not include benchmark prices, the average of all of the supplier responses is calculated. Offline bids are not included in the average. Then, each supplier response is compared to the average value, and any response that exceeds 90% savings is flagged as an outlier.
What about other unusually high responses?
Only supplier responses that exceeds 90% savings are flagged. Erroneously high supplier responses are not flagged. For example if one response is 4 times higher than the average of the responses or the benchmark price, it will not be automatically flagged as an outlier and should still be reported manually.
Can I update benchmark prices?
No, if you update the benchmark prices after the outliers are calculated, they will not be recalculated.
Additionally, this process only flags supplier responses and will not update if the benchmark price is incorrect. Incorrect benchmark values could cause a supplier response to be incorrectly flagged (e.g., the response is a lot lower than the benchmark price). In this case, correct the benchmark price, where able, and report the records to support@fairmarkit.com so the incorrect outlier flag can be removed.
Are offline bids included?
No, offline bids are not considered in the calculation and will not be flagged as an outlier. Additionally, offline bids are not included if an average of responses is needed to calculate outliers.