This document provides an overview of Oracle Advance Pricing. It discusses key concepts like price lists, qualifiers, modifiers, and pricing agreements. Price lists define item prices and pricing attributes. Qualifiers specify discount conditions. Modifiers apply discounts, surcharges, promotions, and freight charges. Pricing agreements negotiate prices with customers. The document demonstrates how to set up a price list, discount modifier, and apply the modifier in a sales order to provide a 10% discount.
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Agenda
Price List
Need for Advance Pricing
Basic Concepts
Pricing Features
Qualifier Groups
Qualifiers
Modifiers
Pricing Agreement
3. 3
Basic Concepts
Advance Pricing basically takes into account the following two concepts :
B to B : Business Group to Business Group
B to C : Business Group to Customer
B to B : This a long standing relationship between multiple business groups and
it doesn’t calls for some sort of promotions or advertisements. What really
matters here is the time to deliver, quality etc.
B to C : This relationship is more of business oriented. There is a need to attract
customers which can be achieved by various discounts, promotions etc.
Attribute : The pricing attributes are the parameters which in a relationship will
give the price of the end product. For example - Length, Breadth and Height are
the parameters. When they are given the system will calculate the Volume
(Length * Breadth * Height) and give the Rate / Unit Volume.
Qualifiers : Qualifiers are the conditions which decides the qualification for a
particular Discount or Surcharge.
Pricing Engine : Pricing request will be called from an application like Order
Management. The Pricing Engine starts working from here on. The Attributes and
Qualifiers is passed into the Pricing Engine. The Pricing Engine processes all
these details and give the Final Price of the product.
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Need for Advance Pricing
Advanced Pricing is useful as it supports the following features :
Range & Point Price Breaks on Price Lists.
Multiple Secondary Price Lists.
Qualifiers for Price Lists & Modifiers.
Multi-Currency Conversion Lists for Price Lists.
Dynamic Formula for Price Lists and Modifiers.
Promotion Modifier.
Buckets for Manual Modifiers.
Freight and Special Charges
Coupons etc.
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Pricing Features
Oracle Advance Pricing provides the following Pricing features :
Price list
Pricing Agreement
Qualifier
Modifier
Formulas
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Price List
Price List :
Price list contains basic list information and one or more pricing lines, Pricing
attributes, formula and secondary price list.
Basic information includes the price list name, effective dates, currency,
rounding factor and shipping defaults such as freight terms and freight carrier.
Price is defined for an Item & UOM combination as a price list line.
Primary UOM feature
Secondary price list
Multi-Currency Conversion List
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Price List
To Start With Lets create a Price List “TEST PRICE LIST” from Order
Management Responsibility and enter the details as per the below screen shot.
Item Names : 3936666, SO60332 and prices as under.
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Agreement Price List
Oracle Advance Pricing allows you to establish agreements with your
customers that define the prices, payment terms, and freight terms that
you negotiate.
There are two methods by which you can manage agreements:
Standard agreements which use standard price lists (PRL)
Pricing agreements which use agreement price lists (AGR)
Negotiated Price for a specific customer
Always associated with a Price List
Price List can be Standard Price List of Agreement Price List
Consists of Terms along with Price
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Qualifiers
Qualifiers are the conditions which decides the qualification for a particular
Discount or Surcharge.
Entities defined for receiving discounts and adjustments could be as follows:
Specific customer
Customer groups
By order type
Any other seeded or custom attribute
Qualifiers can be linked with the following :
Price lists
Modifiers
Qualifier can be:
Seeded
Custom
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Qualifier Groups :
Similar Qualifiers are the grouped together to form a Qualifier Group.
Main advantage of defining the Qualifier group are as follows :
To link the common qualifiers for common benefits (discounts)
Qualifier groups can be attached easily to modifiers.
Create AND / OR condition among qualifiers.
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Modifiers
Modifiers are like Price Lists
However Price List will be associated to a particular customer, but modifiers
are Global
They are applied on all the Sales Order where the conditions are met. The
conditions are the qualifiers.
There are 5 basic types of Modifiers :
1. Deal
2. Discount
3. Freight and Special Charges
4. Promotion
5. Surcharge
There are 3 Modifier Levels available in Advance Pricing :
1. Group of Lines : Applied for making Modifiers for a group of Lines
2. Line : Applicable for all lines where the conditions are satisfied.
3. Order : Applicable at Order Level
There are 4 modifier Application methods available in Advance Pricing :
1. Amount
2. Percentage
3. New price
4. Lumpsum
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Modifiers
We would cover the following topics in Modifiers in more details
Discounts
Discounts – Additional Features
Competing Modifiers
Competing Modifiers - Rules
Buckets
Freight and Special Charges
Promotions
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Modifiers : Discounts
Discounts : Discount are the amounts that a customer has to pay less than
the normal price of the item.
Various enterprises give different types of discounts to attract more
customers based on certain conditions.
Modifiers in Oracle Applications also provides similar functionalities to
define the discounts, apply the discounts based on the conditions which are
called qualifiers.
They are applied on all the Sales Order where the conditions are met. These
conditions are the qualifiers.
Lets start with the creation of Discounts i.e. define a Discount Modifier
Navigation Path is : Oracle Pricing Manager* > Modifiers > Modifier Setup
*Responsibility can differ from instance to instance
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Modifiers : Discounts
Select Type as “Discount List” and enter the Modifier Number and Name as
“TM1”. The other details in the respective fields can be entered. Select
Automatic option in the Modifier header. Refer the following Screen Shot :
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Modifiers : Discounts
Go to the Line Level, Modifier Summary.
Modifier Number at the Line Level will be generated automatically.
Select Modifier Level as Line. However Modifier Level can be any of the
following :
For Discount Type modifier, we have further 3 sub-modifiers as follows :
Discount
Price Break Header
Surcharge
Select “Discount” in the Modifier Type. Since we have selected “Automatic”
in the Header, the “Automatic” check box in the Modifier Line is activated.
Select “Override”. This will allow us to change/modify the Modifier from the
Sales Order.
Select “List Line Adjustment” in the Pricing Phase
Select “Item Number” in the Products Attribute. This is mainly used for
applying restrictions.
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Modifiers : Discounts
Enter the Item Name as “3936666” in the Product Attribute Value. This
would mean that this modifier will be applicable on when the Item Name on
the Sales Order line is “3936666”
Select the Product Attribute as “Item Quantity” in the Volume Type and
“Point” in the Break Type
UOM should be selected as the primary UOM of the Item i.e. “NOS”.
Value From and Value To be entered as “5” and “10” respectively.
Now lets us go to the Discount/Charges Tab and define the Application
method and the extent of discount.
Select “Percent” in the Application method and enter “10” in the value.
Save this modifier.
So far, we have created a Discount Modifier to provide a discount for a
specific Item “3936666” when the Order Quantity is between 5 and 10 (both
values included). Refer to the screen shot attached.
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Modifiers : Discounts
A typical screen shot of Discount Type of Modifier would look like below :
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Modifiers : Discounts
Now lets see how the defined Modifier would work.
Create a Sales Order and attach the price list with the item as “3936666” for
which we have created a modifier. Since we have created the Price List
“TEST PRICE LIST” in the beginning, we will attach this price list to our new
Sales Order. Enter Qty as “10”.
We can see in the following screen that the Extended Price (Qty * List Price)
is still 1000. i.e. the unit price is still 100 as per the Price List.
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Modifiers : Discounts
Save and Book the Sales Order.
Now we can see that the Extended Price has changed to 900, which implies
that the Unit price has changed to 90 after applying the discount of 10% as
per the defined modifier. Please refer the below screen shot.
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Modifiers : Discounts
To see the details of the applied modifier, Click “Actions” and select “View
Adjustments”. The following screenshot indicates that the defined Modifier
TM1 has been applied on this Sales Order and discount@ 10% has been
granted.
This modifier is applied automatically as we have selected the “Automatic”
option at the time of Modifier Definition.
Since, we have selected the Override allowed, so the Rate of discount can be
changed or the modifier can be deleted, which otherwise would not have
been possible.
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Modifiers : Discounts – Additional Features
Lets go back to our original modifier TM1 and copy the first line twice. Enter
the discount as 20% and 30% respectively for line number 2 & 3
respectively.
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Modifiers : Discounts – Additional Features
Let us create another Sales Order and attach the price list with the item as
“3936666” for which we have created a modifier. Attach the Price List
“TEST PRICE LIST” the Sales Order. Enter Qty as “10”.
We can see in the following screen that the Extended Price is 400. i.e. the
Unit Price is 40 which implies that a discount of 60% has been granted.
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Modifiers : Discounts – Additional Features
Since in the modifier all the three lines were same, the total discount is
added up and hence 60%(10+20+30) discount is granted.
The following screen indicates the discounts that has been applied.
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Modifiers : Competing Modifiers
For a given price phase, if a modifier has the same incompatible group, then
it is referred to as Competing Modifiers.
Also called as Incompatible modifiers.
Only one modifier will qualify among all the incompatible modifiers.
In case of discount, the one which gives best discount will be qualified.
In case of surcharge, the one where the surcharge is minimum will be
qualified.
The best price for customer is always the criteria.
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Modifiers : Competing Modifiers
Let us go back to our modifier TM1, and apply the same Incompatibility
Group – Level 1 for all the three modifier lines.
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Modifiers : Competing Modifiers
The percentage of discount be retained as 10%, 20%, and 30% for each of
the modifier line as follows :
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Modifiers : Competing Modifiers
Let us create another Sales Order and attach the price list with the item as
“3936666” for which we have created a modifier. Attach the Price List
“TEST PRICE LIST” the Sales Order. Enter Qty as “10”.
We can see in the following screen that the modifier line 3 which has the
maximum discount i.e. 30% is applied on the Sales Order.
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Modifiers : Competing Modifiers
If we have the same Incompatibility group with different precedence, then
the modifier line with the lower precedence will be applied.
Lets change the precedence in each of our modifier lines as 220, 210 and
230 for modifier line 1, line 2 and line 3 respectively
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Modifiers : Competing Modifiers
Let us create another Sales Order and attach the price list with the item as
“3936666” for which we have created a modifier. Attach the Price List
“TEST PRICE LIST” the Sales Order. Enter Qty as “10”.
We can see in the following screen that the modifier line 2, with the lowest
precedence is applied on the Sales Order.
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Modifiers : Competing Modifiers
Now let us go to our original modifier and select “Exclusive Group” in one of
the modifier line Incompatibility group.
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Modifiers : Competing Modifiers
Let us create another Sales Order and attach the price list with the item as
“3936666” for which we have created a modifier. Attach the Price List
“TEST PRICE LIST” the Sales Order. Enter Qty as “10”.
We can see in the following screen that the modifier line 1, i.e. “Exclusive”
Incompatibility is applied.
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Modifiers : Competing Modifiers - Rules
An Exclusive incompatibility is always applied.
It supercedes both best price and precedence.
For two line of “Exclusiveness” the line with higher discount will qualify.
If incompatibility is not solved, then the first line will be populated (based
on modifier number).
As a summary, Incompatibility is resolved by
1. Best price
2. Precedence
3. Exclusive supercedes both the above
4. Among exclusive groups, above rule 1 and 2 will apply
5. Unresolved incompatible modifiers will be picked based on the
modifier line which occurs first.
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Modifiers : Buckets
For example, if a company is giving a promotion on purchase of an item as
below :
If you are from India – Bucket Number 1 : 5%
If you are from Pune – Bucket Number 2 : 2%
If you are from Hinjewadi – Bucket Number 3 : 1%
The first two promotions have the same bucket number. This is called as
Additive Bucket.
The third promotion which belongs to next Bucket is called as Cascading
Bucket.
For all Additive Buckets, the discount will be added.
For Cascading Buckets, the discount will be obtained after reducing the
additive bucket.
If the base price of a product is 100/-, then the calculation is as follows :
Bucket Number Discount Price Value Calculation
1 5% 95 (100-5%)
1 2% 93
(95-2%) –
rounded off
2 1% 92.07 (93-1%)
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Modifiers : Buckets
Now let us create another modifier and give the bucket numbers and
discounts as per the previous slide.
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Modifiers : Buckets
Let us create another Sales Order and attach the price list with the item as
“3936666” for which we have created a modifier. Attach the Price List
“TEST PRICE LIST” the Sales Order. Enter Qty as “1”.
We can see the modifier calculation in the following screen
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Modifiers : Freight and Special Charges
Freight and Special Charges are used for making changes in the freight and
special charges based on Sales Order.
There are two types of Freight Charges
Packing Charges
Handling Charges
Packing Charges are for individual items and at Line Level.
Handling Charges are lump sum amounts at the Order Level.
Useful for automatic application of Freight and Handling charges.
Freight and Special Charges can be further subdivided as Charges
Examples of Charges are Freight Cost, Insurance, Handling Cost,
Transportation Cost, Restocking Fee, Miscellaneous Charges etc.
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Modifiers : Freight and Special Charges
Select Type as “Freight and Special charge List” and enter the Modifier
Number and Name as “TM4”. The other details in the respective fields can be
entered. Select Automatic option in the Modifier header. Refer the following
Screen Shot :
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Modifiers : Freight and Special Charges
Go to the Line Level, Modifier Summary.
Modifier Number at the Line Level will be generated automatically.
Select Modifier Level as Line.
Modifier Type will be only one i.e. “:Freight/Special Charge” . Since we have
selected “Automatic” in the Header, the “Automatic” check box in the
Modifier Line is activated.
Select “Override”. This will allow us to change/modify the Modifier from the
Sales Order.
Select “List Line Adjustment” in the Pricing Phase
Select appropriate Charge Name in the Charge Type in Discounts/Charges
tab. Lets take Freight Cost for our example.
Select the Application as “Amount” and enter the “Amount” as “1000”.
Go to the next Modifier Line and give the Level as “Order”. Rest all values
same as first modifier Line, except for Charge. Lets select the Charge as
“Handling Cost” and the amount as 500.
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Modifiers : Freight and Special Charges
Refer the following screen shot :
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Modifiers : Freight and Special Charges
Let us create another Sales Order and attach the price list with the item as
“3936666” for which we have created a modifier. Attach the Price List
“TEST PRICE LIST” the Sales Order. Enter Qty as “10”.
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Modifiers : Freight and Special Charges
Click on the Actions and select “Charges and Freight Costs”
We can observe from the following screen that a total Freight of 10,000 has
been applied at the Line Level @ 1000/- per unit.
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Modifiers : Freight and Special Charges
Similarly click on the Actions at Header Level and select “Charges”
We can observe from the following screen that a Handling Cost of 500/- is
been applied at the Order Level.
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Modifiers : Freight and Special Charges
Total Charges applied on the Sales Order can be viewed in the Sales Order
Header as per the following screenshot.
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Modifiers : Promotions
Promotions are for B to C type of Sales Orders.
Normally company gives discounts when it is direct selling to the customer.
In case of B to B types of Sales Orders, the promotions are called Deals.
Promotions can be by way of Coupons.
Example of Coupon Types of promotions : Suppose a customer purchased
items for more than Rs. 1000/-, then he is entitled for a Coupon. He can use
the Coupon at a future date to get a discount of 10%. This redemption can
be done only if the customer purchase for a minimum amount of Rs. 200/-
We can see the creation of Promotion Modifier in the next slide.
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Modifiers : Promotions
Select Type as “Promotion” and enter the Modifier Number and Name as
“TM3”. The other details in the respective fields can be entered. Select
Automatic option in the Modifier header. Refer the following Screen Shot :
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Modifiers : Promotions
Go to the Line Level, Modifier Summary.
Modifier Number at the Line Level will be generated automatically.
Select Modifier Level as Line. However Modifier Level can be any of the
following :
Group of Lines : Applied for making Modifiers for a group of Lines
Line : Applicable for all lines where the conditions are satisfied.
Order : Applicable at Order Level
Select “Discount” in the Modifier Type. Since we have selected “Automatic”
in the Header, the “Automatic” check box in the Modifier Line is activated.
Select “Override”. This will allow us to change/modify the Modifier from the
Sales Order.
Select “List Line Adjustment” in the Pricing Phase
Select “Item Number” in the Products Attribute. This is mainly used for
applying restrictions.
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Modifiers : Promotions
Enter the Item Name as “SO60332” in the Product Attribute Value.
Select the Product Attribute as “Item Amount” in the Volume Type and
“Point” in the Break Type
UOM should be selected as the primary UOM of the Item i.e. “NOS”.
Value From and Value To be entered as “200” and “9999999999”
respectively.
Now lets us go to the Discount/Charges Tab and define the Application
method and the extent of discount.
Select “Percent” in the Application method and enter “10” in the value.
Save this modifier.
So far, we have created a Discount Modifier to provide a discount of 10% for
an Item “SO60332” when the Order Amount is more than Rs. 200/-
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Modifiers : Promotions
Since it is a simple discount now, we have to make it restricted and coupon
issued.
Go to next line in Modifier and enter the Modifier number as “Coupons”.
Select Modifier Level as “Group of Lines”.
Select “Coupon Issue” in the Modifier Type. Since we have selected
“Automatic” in the Header, the “Automatic” check box in the Modifier Line is
activated.
Select “Override”. This will allow us to change/modify the Modifier from the
Sales Order.
Select “All Line Adjustment” in the Pricing Phase
Select “Item Number” in the Products Attribute. This is mainly used for
applying restrictions. Enter “3936666” in the Item. The rest of the details be
entered as per the first line.
Now the system has applied a restriction in the Qualifier.
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Modifiers : Promotions
Refer the following screen shots for the modifier details. Subsequent screen
will also suggest the Restriction applied in the qualifier.
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Modifiers : Promotions
Let us create another Sales Order and attach the price list with the item as
“SO60332” for which we have created a modifier. Attach the Price List
“TEST PRICE LIST” the Sales Order.
A coupon will be issued based on the quantity or amount set as qualifier.
Once the coupon is issued, another restriction will come up stating that the
discount that has to be granted for the particular Coupon.
The coupon has to redeemed.
So lets create another Sales Order for item “3936666” for value more than
Rs. 200/-. Book the Order
Go to the Coupon Tab and Select the relevant coupon number and click
“Apply”.
The discount mentioned while defining the Coupon Modifier will be applied
on the Sales Order.
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