Usage Pooling Example

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Overview

Outlined below is an example of how usage is rated over one billing period for a service with usage pooling enabled and the below rate schedule.

Rate Schedule

API Calls		Document Downloads
Units	Rates	Units	Rates
1–100	.00	1–100	.00
101–500	.10	101–500	.08
501–1000	.08	501–1000	.06
1001–∞	.05	1001–∞	.04

Calculating Usage Rating with Usage Pooling

To understand the usage rating for this service, it is important to consider the way that the usage is pooled across multiple rate schedule tiers and how the factor unit rate is then calculated.

Service	Units	Pooled Usage	Factored Unit Rate	Total Charge	Calculation Explanation
API Calls	125 units	125 units	$0.02	$2.50	The first 100 units of API calls fall into the first tier and are charged at $0.00. The remaining 25 API calls fall into the second tier and are charged at $0.10 for a total charge of $2.50 (25 units X $0.10). This makes the total charge for this usage $2.50 ($0.00 + $2.50).
Document Downloads	300 units	425 units	$0.08	$24.00	The pooled usage prior to this load is 125 units. 300 units are loaded for document downloads, which falls into the second tier and are charged at $0.08 per unit for a total charge of $24.00 (300 units X $0.08).
API Calls	200 units	625 units	$0.09	$17.50	The pooled usage prior to this load is 425 units. The first 75 units of this load for API calls are rated at $0.10 per unit for a total charge of $7.50 (75 units x $0.10). The remaining 125 units are rated at $0.08 per unit for a total charge of $10.00 (125 units x $0.08). This makes the total charge for this usage $17.50 ($7.50 + $10.00).
Document Downloads	150 units	775 units	$0.06	$9.00	The pooled usage prior to this load is 625. 150 units are loaded for document downloads, which falls into the third tier and are charged at $0.06 per unit for a total of $9.00 (150 units X $0.06).

Factored Unit Rate

To understand how the invoice calculates the total charge for the service, it is important to realize how the factored unit rate is calculated for each usage load charge. A factored rate is the adjusted rate per unit for a usage load that falls across tiers of a rate schedule. You can use the below formula to get the factored rate per unit.

Factored Rate Per Unit = Total Charge of Usage Load / Number of Units in the Usage Load

For instance, in the first usage load of the above scenario, 125 units were loaded for a total charge of $2.50 (100 units at $0.00 and 25 units at $0.10). This means the factored rate for each unit in this usage load is $2.50 / 125, which is equal to $0.02.

The factored unit can be seen as the Price Per Unit on the generated invoice (Account > Statements & Invoices > Invoices), as shown below.