36 Overview to Pricing
This chapter contains these topics:
36.1 Objectives
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To understand pricing hierarchies
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To establish base prices for your items
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To define varying prices based on customers, customer groups, items, and item groups
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To define price adjustments, such as discounts and price breaks, based on quantities, amounts, or weight
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To set up contract pricing
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To update prices for items or customers
36.2 Overview
For each item that you want to sell, you must define the price at which you want to sell it. You use Sales Order Management pricing to define the base prices that the system retrieves when you enter items on a sales order.
Pricing includes the following tasks:
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Setting up a base pricing structure
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Working with complex price groups
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Working with price adjustments
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Working with base pricing
You can set up a pricing structure before you define base prices. The system uses this pricing structure to retrieve base prices. The base price structure must be flexible enough to accommodate the pricing schemes that you set up for various combinations of items and customers. You can set up customer groups and item groups and assign prices to any combination of items, item groups, customers, or customer groups. You define a hierarchy to determine how the system searches for prices.
After you establish a base price, you can set up the following additional types of price calculations:
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Price adjustments for groups of items
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Contract pricing, which applies special pricing for an item to a single customer or customer group
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Trade discount pricing, which is a discount percentage on all items for a specific customer
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Cash discount pricing, which you can apply to individual sales order detail lines
The following graphic illustrates how the system calculates prices:
Figure 36-1 How the System Calculates Prices
Description of "Figure 36-1 How the System Calculates Prices"
Pricing can be based on the Parent, Ship To, or Sold To address. You can define base prices with effective dates, so that you can define prices for future use or for limited time promotions and specials. You can also define credit prices that you want the system to use when items are returned.
To allow for greater flexibility in your pricing structure, you can define complex customer and item groups. Within each customer or item group, you can create subgroups based on specific address book and category codes.
You can use repricing to set up additional discounts and markups, or to recalculate sales orders. You use the Standard Order/Basket Reprice program to:
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Reprice lines containing items that belong to product families, which are called baskets
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Reprice an entire order
You use the Update Sales Price/Cost program to recalculate sales orders based on the most current base price or price adjustments. This program allows you to update sales order:
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Costs and prices
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Exchange rates