25 Define Price Adjustments

This chapter contains these topics:

• Section 25.1, "Defining Price Adjustments (ECS),"

• Section 25.2, "Defining Inventory Pricing Rules (ECS),"

• Section 25.3, "Assigning Rules to Customers and Customer Groups (ECS)."

25.1 Defining Price Adjustments (ECS)

When you define base prices, you define prices for an item or a group of items. You use inventory and customer pricing rules to define price adjustments for customers and customer groups. For example, you can set up discounts for one group of customers and markups for another group.

You define inventory pricing rules to set up a pricing scheme for an item or a group of items. For each item or item group, you define levels of pricing. You can determine price breaks by quantity. You can indicate whether the price adjustment is a markup or discount. You can also enter a price that you want the system to use to override the base price for a specified period.

After you define the inventory pricing rules, you use the Customer Pricing Rules program to assign the inventory pricing rules to customers or customer groups. For example, you might want some preferred customers to always receive a 5% discount on specific items. You first define a discount level of 5% in the inventory pricing rules for these items. You then assign the preferred customers, or a customer group called PREFERRED, to this discount level in the inventory pricing rules.

The system will not adjust prices until you assign a customer or customer group to an inventory pricing rule.

25.1.1 Before You Begin

• Verify that item price groups have been set up. See Section 23.3, "Setting Up Item Price Groups (ECS)."

• Verify that customer price groups have been set up. See Section 23.2, "Setting Up Customer Price Groups (ECS)."

25.1.2 What You Should Know About

Topic	Description
Pricing considerations	The system prices an order based on the following: A contract price for a specific customer takes precedence over a contract price for a group of customers. It also overrides other inventory pricing rules. If a contract price for a specific customer does not exist, the system searches for a contract price for a customer group. A trade discount that you define through customer billing instructions overrides all other pricing or repricing. A trade discount is the simplest way to offer a discount to a customer. The system applies the discount to all items sold to the customer. The system retrieves inventory pricing rules for a specific customer, if you have defined them, before it retrieves rules defined for a group of customers.
Setting up contract pricing	You can set up contract prices to guarantee a price for a particular customer. When you enter an order for a contract item, the system checks the remaining quantity to be sold at the contract price. If the quantity on the order exceeds the remaining allowed quantity, the system writes two lines on the order: One line for the quantity at the contract price One line for the quantity at the regular price You set up contract pricing by defining an inventory pricing rule and assigning the rule to a customer. In addition to the normal procedures for inventory and customer pricing rules, you must: Identify the inventory pricing rule as contract pricing Enter contract information in the fold area Enter the item's short ID number as the pricing rule name
Setting up trade discount pricing	You set up trade discount pricing through the customer billing instructions. The percentage you enter is a flat discount that the system applies to all items ordered by this customer. Trade discount pricing overrides all other pricing. See Section 37.1, "Setting Up Customer Billing Instructions (ECS)."
Setting up cash discount pricing	You can enter an additional cash discount to any order detail line on the Order Detail Information form. The system applies the discount only if the line type of the order line is set up to allow discounts. See Section 3.4, "Entering Additional Order Information (ECS)" and Section 38.1, "Setting Up Order Line Types (ECS)."

25.2 Defining Inventory Pricing Rules (ECS)

Navigation

From ECS Sales Order Management (G4910), choose Price Management

From Price Management (G491022), choose Inventory Pricing Rules

You define inventory pricing rules to set up pricing schemes for items or groups of items. For each item or item group, you define levels of pricing. You then assign these levels to specific customers or customer groups. Each level can define a pricing rule, such as a markup or a discount. You can use these levels to define price breaks by quantity, amount, or weight. You can also define a price that you want the system to use to override the base price for a specified period.

Note:

You cannot use both Standard and Advanced Pricing. You must turn off Advanced Pricing for Standard Pricing in Sales to work.

To define inventory pricing rules

On Inventory Pricing Rules

Figure 25-1 Inventory Pricing Rules screen

Description of "Figure 25-1 Inventory Pricing Rules screen"

1. Complete the following field:

   • Pricing Rule

2. To define pricing rules, complete the following fields:

   • Pricing Method

   • Level

   • Up to Quantity

   • Basis

   • Factor Value 

   • Factor Value Type

   • Override Price

   • Effective Date

   • Expire Date

3. Access the fold area.

   Figure 25-2 Inventory Pricing Rules (Fold Area) screen

   
   Description of "Figure 25-2 Inventory Pricing Rules (Fold Area) screen"
   
   

4. To define additional inventory pricing rule information, complete the following fields:

   • Base on Unit Of Measure

   • Line Type

   • Price

   • Item

   • Limit

   • Reference

Field	Explanation
Pricing Rule	User defined code (table 40/PI) used to classify inventory by pricing rules. Typically, these categories correspond to the major sections in the inventory price book. You can set up as many detail categories as you need. A single code can be used for sales, purchasing, order/basket, and contract pricing. If you set up a contract rule, it must equal the short number for the item under contract.
Pricing Method	A user defined code (system 42, type CT) that indicates the pricing method you want to establish within the inventory pricing rule. Valid values are: P – Purchase order discounts O – Order repricing R – Line repricing (basket repricing)
Pricing Category Level	An alphanumeric code that determines the sequence in which the system displays the rules within the pricing group. You define levels when you set up the pricing groups.
Units - Over	The volume or quantity breaks commonly used in pricing tables. If the quantity shown on the first level of a rule is 5, then the pricing logic shown on this level applies only to sales of five or fewer items. If the quantity shown in the next level is 10, then the pricing logic applies to sales of 6 through 10 items. 99,999,999 indicates all quantities.
Basis - For Cost or Price	A costing method on which the system bases the order's net price. The following codes are valid for pricing and repricing: 1 – Last-In Cost 5 – Future Cost P – Unit Price 2 – Average Cost 6 – Lot Cost 3 – Memo Cost 1 7 – Standard Cost 4 – Current Cost 8 – Purchasing Cost The system uses the method you enter here to determine the order's net price. In sales order repricing, the system bases all reprice calculations on either the unit cost or price in the sales detail. Specify P if you want the system to use unit price in the sales order as the basis for reprice calculations. Otherwise, specify a value between 1 to 8 to use the unit cost in the sales detail as the base on value for all reprice calculations.
Factor Value - Numeric	The discount that the system uses when it calculates the price of an item attached to this inventory pricing rule. Discounts can be expressed as multipliers, additional amounts, or deductible amounts. For example, a 10% discount would be expressed as .90. You can use the same factor for markups over cost. For example, a 10% markup would be expressed as 1.10.
Factor Value - Type	A code that indicates whether the factor value is a multiplier (%) or an additional/deductible cash amount ($) when applied to an order's price.
Amount - Override List Price	Any price you enter here overrides all other rules or prices.
Quantity Type	A code that indicates that the quantity limit is based on a special unit of measure. The default is the primary unit of measure. Valid codes are: 1 – Primary Unit of Measure (Default) 2 – Secondary Unit of Measure 3 – Purchasing Unit of Measure 4 – Pricing Unit of Measure 5 – Shipping Unit of Measure # – Pounds $ – Dollars (Not Quantity) Limit
Related - Price	The price of a related item in a pricing or discount policy. For example, with a policy of "Buy one, get one free," the free item is the related item. Enter this price in the unit of measure of the related item quantity.
Limit - Quantity	This quantity is established in the inventory pricing rules as the number of items that the customer may purchase from us at this contract price. Form-specific information The amount that limits the quantity of items you are willing to sell at a contract price. You use this field when a C appears in the Contract Pricing (C) field at the top of the form.
Reference	The number or identifier of the document on which this contract is based. Complete this field only if you are creating a contract price between you and a specific customer.

25.2.1 What You Should Know About

Topic	Description
Creating new item groups	When you define inventory pricing rules, you enter the user defined codes that you previously set up for item price groups. If you need to create new user defined codes for item price groups, you can choose the Inventory Pricing Groups option from the Price Management menu.

25.3 Assigning Rules to Customers and Customer Groups (ECS)

Navigation

From ECS Sales Order Management (G4910), choose Price Management

From Price Management (G491022), choose Customer Pricing Rules

You use the Customer Pricing Rules program to establish the pricing relationship between an inventory pricing rule and a customer or customer group. You must assign a customer or customer group to a specific pricing level in an item's inventory pricing rule before the system adjusts prices. You can also use the Customer Pricing Rules program to remove the relationship between the inventory pricing rule and the customer or customer group.

To assign rules to customers and customer groups

On Customer Pricing Rules

Figure 25-3 Customer Pricing Rules screen

Description of "Figure 25-3 Customer Pricing Rules screen"

1. Complete one of the following fields:

   • Customer Group

   • Specific Address Book Number

2. Complete the following optional fields:

   • Pricing Rule

   • All Levels

3. Complete the following field to assign the customer to a specific level in the inventory pricing rule:

   • Option

25.3.1 What You Should Know About

Topic	Description
Creating new customer groups	When you assign inventory pricing rules to customer groups, you enter the user defined codes that you previously set up for customer price groups. If you need to create new user defined codes for customer price groups, you can choose the Customer Pricing Groups option from the Price Management menu.