Sample Retail Strategies

Lowest Cost

• Requires high use of variable pricing (market-following)
• Highest price uncertainty; price risk depends upon pricing selected
• Immediately affected by market changes (down or up)

Cost (Budget) Certainty

• Requires use of fixed pricing at all times
• Highest price certainty; lowest price risk
• Affected by periodic market changes

Protection Against Major Price Movements

• Requires use of fixed pricing most of the time
• Requires contracting at opportunistic times
• Requires use of long term contracting
• Driven by periodic market changes

Cost Certainty with Low Cost

• Same as Cost Certainty except,
• Market changes drive timing of contracting
• Contract terms may vary in length

Usage Flexibility with Cost Certainty

• Requires use of blend of fixed and variable pricing
• Market changes drive timing of contracting
• Contract terms may vary in length