01 · Assets A
Excel model
The working model with every formula visible, the equations in plain words, and a parity table against the tool.
| · APPLIED COMPUTE · TAKE-HOME ·
Pricing the Engine
The cost, price, margin and contract for one enterprise RL post-training engagement. Every page is generated from one engine, and the Excel model is the reference the engine is checked against.
The deliverables, in reading order
02 · Internal · A
COGS model
Every delivery cost, its phase and its source. Shows cost and margin, so it stays internal.
03 · Review page · B
Pricing model and proposal
The price the customer sees, the reasoning behind each phase fee, and the customer copy of the proposal.
04 · Review page · B
Statement of work
The contract terms the proposal depends on: scope now, customer control as it grows, and the re-paper triggers. Includes the customer copy.
05 · Internal · B
Pricing and margin rationale
Why the price is what it is: the margin target and floor, pushback on cost, the competitor walk-away and what is still unknown.
06 · Interactive
Live tool
Change any input and every number on every page updates from the same engine. The Start here page explains the process.
Requirement map
The take-home asks for A (a COGS model) and B (pricing, SOW and their defence). Each row names the page that answers it and why the answer is shaped that way.
| Requirement | Where | Why it is answered this way |
|---|---|---|
| A. Every cost line in delivering the engagement | COGS model Cost ledger (md) | A price can only be defended if every cost is listed, phased and sourced. Eight workbook cost pools, plus extension lines that default to $0 so the default deal equals the workbook. |
| A. Assumptions needed to price accurately | Excel model Pricing rationale | Every input is either measured or tagged as an assumption. Unverified inputs hold the quote (HOLD) rather than being rounded into a confident price. |
| A. An asset the team can flex per deal | Live tool Excel model | The workbook is the reference; the tool is the flexible version. The parity table shows they agree cell by cell, so a change in one can be carried to the other. |
| B. Scope of work and pricing proposal with rationale | Proposal SOW | Each phase says what the customer gets, why it costs that, how many effort hours sit behind it and when it is invoiced, so every charge maps to a deliverable. |
| B. Margin profile and reasoning | Pricing and margin Live tool: economics | A 45% target leaves room for a 35% floor: below the floor the engagement is not worth the GPU and engineering risk. The rationale explains why, and the tool shows what moves the margin. |
| B. Contract terms: short term vs long term protection | SOW | Now: scope is one workflow and model, the customer decides after each cycle, acceptance rests on objective evidence, and invoices follow milestones. As the customer expands, new models, regions or production need a new order. |
| B. When to re-paper or restructure | SOW, section 5 | Seven explicit triggers, such as a new base model, more cycles, a new workflow or region, production use, or usage above 80% of the envelope. Each is a signal to re-scope, not to quietly absorb more work. |
| B. Defending price against cost pushback | Pricing and margin Proposal | The readiness fee is justified against cost and market benchmarks. Internal cost and margin never appear in customer documents; a test enforces this. |
| B. A cheaper competitor undercutting | Pricing and margin Live tool: economics | Match on scope, not rate. Cutting the price cuts margin, so the rationale shows the margin left after a match and the walk-away price. |
How the pieces agree
- The workbook’s own formulas were recalculated in LibreOffice for 17 scenarios; the engine matches every mapped cell to 1e-6. Parity table · PARITY.md
- Customer documents (proposal, SOW) are generated without cost, margin or labour rates. A test fails the build if one ever includes them.
- Every number on this page is read from the engine when the site is built.
npm run verifyrebuilds the site and fails if a number or a link is stale.
Known limits, stated up front
- Throughput (100,000 tokens per GPU-hour) is a proxy and the largest unknown. Until it is measured, every margin is provisional.
- Rates, labour, extension costs and margin policy are illustrative. The workbook’s $3.99 H100 price is an expired promotion; list is $5.49.
- The final holdout evaluation is not costed, so the handoff margin is overstated.
- The deck and GTM PDFs in the original pack carried different figures ($112,097 COGS against the workbook’s $106,590). They are not used; the workbook is canonical. See PARITY.md §3.
- Legal text is placeholder; bracketed items need counsel review.
No licence is granted; all rights reserved. This is a take-home submission, not an official Applied Compute document. Source: github.com/wpu3325/pricing-the-engine.