Average Usage Method. Where an average purchase order size is used to calculate the Product freight per case, the Average Usage will be calculated on a basis consistent with the Inventory Pricing Policies that govern the items on that purchase order – i.e. period or weekly. For the purpose of calculating the Average Usage, Distributor will use the average of purchase order sizes received during the 28 day period immediately prior to the date pricing is determined. The Average Usage should be representative of the typical volume moving inbound to the distribution center on a Lane and will exclude outlier purchase orders from the calculation of the Average Usage. The methodology for excluding outlier purchased orders will be mutually agreed to between UFPC and Distributor. In the event there are no receipts in those 28 days either due to no activity or introduction of new item or Lane on which an Average Usage can be calculated, freight pricing will be based upon the Actual Purchase Order Size until such time an Average Usage can be calculated. The Average Usage shall be the basis for determining the applicable freight bracket as communicated via GPS and used in the calculation for determining the freight per case for all Products. Any changes to the Average Usage method must be agreed to in writing by UFPC and Distributor.
