Price Increase
How to calculate a realized price increase

I tend to calculate price increases on the realized prices on invoice (or net net if accurate accrual information per customer / material is available). 

Formal gross price list increases tend to say very little if no proper pricing framework is in place. Best story to illustrate this is a former team mate who described that he tried to sell something to a purchaser who was adamant to have at least 40% discount on his gross price list. This was the personal/company target of the purchasers. As the current discount was only around 20% he could not give away an additional 20% discount. After a few rounds my team mate left and returned a few days later with a new gross price list allowing the purchaser get 40% discount and my friend to keep his prices. 

Aggregating a cacophony of products and customers over various entities can be a daunting task. The easiest way to do this is to calculate every price increase on a customer / article level and aggregating this. Aggregation is done not by simply a summation of all individual price increases but the use a weighted average. Although anything can be used, in practice I have found revenue the easiest approach in a more complex mix. Margin tends hide the products you care more about, the under-performers, whereas quantity or weight (kg) can vary significantly in a product portfolio. 

Furthermore this approach allows you to slice and dice your data in any group you want. 

Weighted Price Increase (WPI) = (P2 - P1)/P1 *R1

P1 - Price in first period

P2 - Price in second period

R1 - Revenue in first period

sum (WPI) / sum (R1) = WAPI (%)

 The second choice I made is to use the revenue of first (reference) period. Any chances in volumes are to be considered in a price / volume analysis. Negative effects of price chances would be hidden if the revenue of the second period is used.