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Friday, November 12, 2004

Basic Vs Advanced Pricing

A very common frequently asked question about Oracle Advanced Pricing is: “What are the additional benefits of Oracle Advanced Pricing over the basic Pricing that are included with Order Management ?”. I will try to list down the additional features that Advanced pricing provides. The list is probably not comprehensive but will cover the major differences. Any suggestion/comments on this list for missing features are welcome.

Due to some technical difficulties in putting tables wider than 520 pixels here I moved the comparison table here.

Thursday, October 21, 2004

Pricing Scenario: How to use price breaks based on Weight?

This post describes how to use the attribute mapping method in Oracle Advanced Pricing to implement a complex contract pricing rule

Recently I came across the following pricing requirement that seemed to be tricky at first glance: -

Use price breaks based on a weight of an item as defined in a DFF.

  1. An item from Inventory is assigned to a contract line and has a quantity of 1 with a UOM of Each
  2. Each item has a break price (either by item category or the item number) based on the weight. E.g., price is $1000 < 5000 tons and $1500 if weight is between 5001 and 9999 tons and $2000 if > 10000 tons.

The Advanced Pricing allows you to hook up your SQL code to drive pricing. The attribute mapping feature of Oracle Advanced Pricing helped us to implement the above pricing rules by adding a few lines of SQL code.

First, we cannot use the standard price break functionality to achieve this since standard price break uses volume or quantity as basis. We followed the steps below:

Step 1: Create a function to get the weight of the item using item id

e.g.,

Function get_weight( p_item_id number, p_organization_id number) is
l_weight number;
begin
select attribute5 - DFF that stores weight
into l_weight
from mtl_system_items
where inventory_item_id = p_item_id
and organization_id = p_organization_id
return l_weight;
when others then
return 0;
End

Step 2: Create a pricing attribute called weight (datatype: Number)

Navigation: Pricing Manager > Setup > Attribute Management > Contexts and Attribute

Step 3: Setup Attribute Mapping for this pricing attribute

Navigation: Pricing Manager > Setup > Attribute Management > Attribute Linking and Mapping > (B) Link Attributes

Attribute Mapping Method: Attribute Mapped
Level: Line
User Source Type: PL/SQL API
User Value String: pkg_name.get_weight(okc_price_pub.g_contract_info.inventory_item_id, okc_price_pub.g_contract_info.inv_org_id)

Step 4: Run ‘Build Attribute Mapping Rule’ concurrent program

Navigation: Pricing Manager > Setup > Atrribute Management > Attribute Linking and Mapping > Tools Menu

Step 5: Create Formula that uses weight to calculate price

Navigation: Pricing Manager > Pricing Formulas > Formula Setup

One of the formula line will be this newly created pricing attribute. Now the actual formula will depend on the exact requirement for calculation. For example, the formula for the example you have given can be:

Price = WT_FACTOR

Where WT_FACTOR is “Factor List” which is defined as follows:

WT_FACTOR = 1000 if weight price attribute is between 0 and 5000
WT_FACTOR = 1500 if weight price attribute is between 5001 and 9999
WT_FACTOR = 2000 if weight price attribute is between 10000 and 99999999

A new Factor List can be created from the formula form by clicking the factor button at the bottom right corner.  The formula is so versatile that you can implement it in many ways. The following formula would give the same result:

Price = WT_FACTOR * 500

Where WT_FACTOR is “Factor List” which is defined as follows:

WT_FACTOR = 2 if weight price attr is between 0 and 5000
WT_FACTOR = 3 if weight price attr is between 5001 and 9999
WT_FACTOR = 4 if weight price attr is between 10000 and 99999999

Step 6: Associate the formula with the item

This association can be in Price List or Modifier depending on the scenario. If this is only used in contract and always priced this way then you can tie this in the price list itself. If it needs more context sensitive treatment then you may have to use a modifier and use the formula in the modifier.

Step 7: Attach this price list to the contract

Attribute Mapping provide provides a logical and highly flexible setup framework that can be used to model even the most complex pricing scenario. GET_CUSTOM_PRICE() is another way of implementing fully customized pricing rules based on SQL query. I will show the use of it in my next post. Metalink contains a very well-written white Paper (1.44MB) that explains the use of this functionality.