Has anyone tried creating a washup based model to explain the...

Has anyone tried creating a washup based model to explain the oddities in what revenue is being received each quarter?

When getting out a calculator on the $4m revenue received this month, it was pretty clear that the shipment hadn't collected the 44% pricing applying at departure date. If it had, revenue would have been higher. I'm wondering whether all the pricing elements are set approximately a month before departure (Grade, volume, shipping price). Any departure from the estimate is then managed as a washup applied to the payment for the next shipment.

Some of the impacts of this could be:

• No single period can be taken in isolation from a revenue viewpoint. Previous errors in estimates in the pricing agreement cascade to the next period. Current period errors in estimates cascade into the next period.
• When E25 agreed to ship 47kt in Q2, they would have been paid for 47kt in Q2 (But Q3 collects a large negative washup because the delivery was 4kt short).
• When E25 talked about huge shipping costs following Q1, some of those costs may not yet be in the Q1 cashflow and may be a negative washup in Q2. Q2 therefore could have unders and overs.
• There could be other between period volume washup's beyond the 47kt noted above
• There could be grade washup's within the pricing if the grade being produced is not stable (which appears distinctly possible if there is variable performance around washing and sorting the ore).
• The 44% prices E25 has received on shipments are lower than expected because they were set a month before delivery and the general trend has been rising prices

Back to Q3
Only receiving $4.0m this quarter is hard to explain. Its however a lot easier if pricing was effectively only for 30kt (because an extra 4kt was paid in Q2). Its also a lot easier if the price for the Q3 shipment was the Fastmarkets price from 5 Feb ($5.46) or 12 Feb ($5.73).