STEM help / Calculation framework

10.3.5.1 Cost Allocation

When using cost-dependent tariffs, it is important to consider how the different costs allocated to a Service should be recovered from the Connection, Rental and Usage Tariffs, i.e., the proportion of each cost to be recovered from each type of tariff. For costs allocated from Resources in a given Function (Depreciation and Amortisation – known as Capital Charge, Maintenance, Churn, Connection, Rental, Usage and Operations Costs), these proportions are defined in the Function/Cost Allocation dialog. Service Administrative Costs (Administration and Provision) are apportioned in the Service/Administrative Costs/Cost Allocation dialog.

By default, each cost is recovered wholly from one particular tariff:

  • Service Provision Costs, and Resource Churn and Connection Costs from the Connection Tariff
  • Service Administration Costs, and Resource Depreciation and Amortisation and Rental Costs from the Rental Tariff
  • Resource Maintenance, Usage and Operations Costs from the Usage Tariff.
 

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