1. Billing Optimization
Every time a rental billing run is performed, all active contracts (except for Rent to Purchase contracts) are examined. Any rental items that are not returned are analyzed by a calculation to determine if further billing should occur. This optimization happens regardless of the Billing Method value in the Rental Control setup.
Based on the physical amount of time the unit has been out, and the hours that apply to the current duration, the system determines whether it should increment the quantity of the current duration, or bump the rental duration into the next larger duration (if it is set for use in optimization in the Duration setup - DSP=Y) category if that would be cheaper.
If the duration is set to DSP=S for Static, or the individual contract line is flagged as Static, the rental duration on the line will not change. Only the quantity will be incremented.
If the duration is set to DSP=F for Fixed, neither the rental duration nor the rental quantity on the line will change. These lines must be changed by the user.
If the duration is set to DSP=U for Usage Hours, neither the rental duration nor the rental quantity on the line will change. These types of rental items do not optimize in the usual sense. The rental item's quantity will change once hour meter readings are entered, to reflect the unit's usage.
For regular optimization, the system calculates the number of hours the machine has been out by comparing the date and time out on the contract, to the billing run date and time. This value is then compared to the hours defined in the duration master for this duration in the Max Hrs field. If this value is greater than the Max Hrs, the duration quantity in incremented by a value of 1. If however, this incrementing would result in a higher price than the next higher duration, the rental item is changed to the next higher duration with a quantity of 1.
The Max Hrs is used to allow for a grace period only on the last quantity of the final duration. For example, there is a Min of 24 hours and Max of 25 hours on a Daily duration. Assume that a 1 day duration rolls to 2 days. A grace period of 1 hour will be given to the 2nd day, not 2 hours, 1 for each day. If the Daily duration was to roll up to a Weekly duration, the grace period (Max minus Min) will be used that is on the Weekly duration. The Daily duration grace period will no longer be used.
The system will always use whole durations. For example, the system will not change the duration to be 1 week and 3 days, it would just set it to 2 weeks.
2. Return optimization - Amount of time unit is out
When a rental item is returned, the system allows for optimization of duration based on the exact amount of time the unit was out. This optimization only happens if the Billing Method value is set to 2, 4 or 5 in the Rental Control setup, and the item is not set up as a Usage Hours, Static or Fixed duration rental. The physical amount of time the unit has been out is calculated as a number of hours. The date and time out on the contract are compared to the date and time returned (system date) or set to off-rent.
This amount of hours is then compared to all durations setup for regular use (DSP FLAG is Y in the duration control file) to see which combination of durations and quantities would work out to be the cheapest amount for the physical amount of time the unit has been out. For example, if the unit had been Billing Run optimized to a value of 2 weeks, but the unit was really only out 1 week and 2 days, and the total for 1 week and 2 days was cheaper, the system would automatically change the durations to be 1 week and 2 days.
Static items will change to a quantity sufficient to cover the indicated rental period, but Fixed items will not change at all. These must be manually changed, if desired. Usage Hours items will recalculate the rental quantity once the hours in value is input.
3. Return optimization - Overtime calculation
When a rental item is returned, if it is not set as a Usage Hours duration, the system calculates overtime based on the Max Mach Hrs value in the duration control file. This calculation happens regardless of the Billing Method value in the Rental Control Setup.
The hours used on the machine (derived as HRS IN - HRS OUT) is compared to the Max Mach Hrs value for the applicable duration(s). For example, if optimization in step 2 above determines that 1 week and 2 days is the optimal billing, the system will add up the Max Mach Hrs for both of the durations (multiplied by the quantity). If the hours used are greater than the Max Mach Hrs total, the overtime rate defined for the applicable base code is applied. The overtime charge is calculated as
excess hours x overtime rate.
Note: This overtime charge can be manually changed if desired. No overtime is calculated on an exchange, so if dealer wants to charge they should return and invoice the overtime and then setup the new unit for the contract if they wish to charge overtime on the original unit.