The formulas from which valuations are derived are provided below. You may wish to enter them into a spreadsheet to analyze them. Remember, these formulas determine what you bid, but your actual cost is based on the market price as determined by progressive second price auction rules.
The curves defined by these formulas vary according to settings in the valuation windows. To avoid confusion, the names of the settings have been given in the formulas as:
· Budget for budget settings in budget-based valuations
· MaxQty for either Max Qty in Budget Valuation With Limits or the single Qty setting in the other valuation windows
· MinQty for the minimum quantity setting in the Budget-with-limits valuation
· MaxValue for the Value setting in the valuation windows
The variables in the equations are:
· Price for the unit price
· Qty for the quantity of bandwidth that will be requested at that price
Note that the units you use do not matter as long as you are consistent throughout:
· Budget is specified in currency-per-unit-time (such as $/month).
· “Quantities” are quantities of bandwidth expressed in Gbps, Mbps, or kbps.
· Price is specified in currency per unit bandwidth per unit time (such as $/Mbps/Month).
· MaxValue is given in terms of currency per unit time (such as $/month).
To convert a price equation to cost, multiply the price equation by the quantity variable (“Qty” in the equations).
Click to view the following formulas: