R0ML's Ratio
15 days ago
- #business
- #humor
- #purchasing-strategy
- R0ML's Ratio (RR) is a method to evaluate volume purchases by comparing the Full Undiscounted Retail List Price of Units Used (FURLPoUU) to the Total Price of the Entire Enterprise Volume Licensing Agreement (TPotEEVLA).
- If RR is less than 1, the deal is good; if greater than 1, it's unfavorable ('you are the bozo').
- The key to using RR effectively is accurately estimating the number of units that will actually be used.
- For new software or SaaS purchases, it's often better to start with individual purchases to avoid potential waste, as initial usage data is unknown.
- The article humorously uses the example of purchasing clown noses for a circus to illustrate the concept.