Creating Volume Discounts

This chapter describes the two different types of volume discounts and the process of setting up a volume discount. It also covers special features of volume discounts for products with components. This chapter covers the following topics:

About Volume Discounts

A volume discount is an adjustment to the price of a product based on the quantity of that product in the quote line or order line item.

When you define a volume discount, you select one of two discount methods:

Simple. This method applies the same discount to every line item. The discount for all items depends on the total quantity of that item purchased.
Tiered. This method applies the discount defined by each Volume Discount Line Item record to the quantity of items defined in that Volume Discount Line Item record.

For example, you create a volume discount with line items that:

Apply a 10 percent discount when the quantity is five to 10 items
Apply a 20 percent discount when the quantity is 11 to 20 items
Apply a 30 percent discount when the quantity is 21 items or more

If this is a simple volume discount, and if the customer buys 23 items, then the customer gets a discount of 30 percent on all 23 items.

If this is a tiered volume discount, and if the customer buys 23 items, then the customer gets no discount on items one to four, a 10 percent discount on items five to 10, a 20 percent discount on items 11 to 20, and a 30 percent discount on items 21 to 23.

Volume discounts apply to the quantity in the quote line or order line, not the total quantity in the entire quote or in an entire order. If a user splits an order for a product into two or more lines on a quote, then the volume discount calculation for that product is not based on the total of the two lines. However, you can configure the application to base volume discounts on multiple line items, as described in Volume Discounts Across Line Items.

The volume discount applies to the start price after attribute pricing and customizable product pricing adjustments have been applied.

Note: If you use volume discounts with other types of price adjustments, then the final price depends on the order in which Siebel Pricer applies the pricing adjustments. For more information, see About the Processing Order of Price Adjustments.

For more information about volume discounts, see the following information:

About Reusing Volume Discounts for Multiple Currencies

You can use the same volume discount schedule for price lists in different currencies.

You can create the volume discount schedule in one currency. When the salesperson creates a quote, the salesperson uses this volume discount schedule but specifies other currencies for the line items. While calculating the volume discounts, the pricing procedure automatically converts the currency of price adjustments in the volume discount to the currency of the quote or order line item.

Volume Discounts and Products with Components

Products with component are discussed in Setting Up Pricing for Products with Components. This topic explains how volume discounts apply to component products.

The pricing procedure completes the pricing for the product with components before applying any volume discounts. For more information, see About the Processing Order of Price Adjustments.

Volume discounts can apply to the components of a customizable product. For example, if disk drives are one component of a computer, then you can give volume discounts based on the number of disk drives within a single instance of a disk drive in the customizable product. The volume discount applies to an individual line item within a customizable product, and takes into account the existence of multiple instances of the disk drive within the customizable product or quote. However, you can configure the product so it applies discounts based on the quantity in multiple line items of an order, as described in Volume Discounts Across Line Items.

Volume Discounts Across Line Items

You can modify the pricing procedure to create volume discounts that work across line items.

The pricing procedure is a PSP procedure. For more information about PSP procedures and about the Aggregate Transform, see Siebel Order Management Infrastructure Guide.

Process of Setting Up a Volume Discount

To set up a volume discount, perform the following tasks:

Creating a Volume Discount Record

This task is a step in Process of Setting Up a Volume Discount.

A volume discount record provides the top-level information about a volume discount, including its name, whether it is a simple or tiered volume discount, its start and end dates, and its currency.

Caution: If you delete a volume discount record, then all references to this discount become invalid. Any price list line items that used this discount will no longer have a volume discount.

To create a volume discount record

Navigate to the Administration - Pricing screen, then Volume Discount view.

Add a new record to the Volume Discounts list and complete the necessary fields. Some fields are described in the following table:

Field	Comments
Name	Enter a name for this volume discount.
Discount Method	Select a method from the picklist. The options are Simple and Tiered, as described in About Volume Discounts.
Start Date	Enter the date when this volume discount becomes effective.
End Date	Enter the date when this volume discount becomes ineffective. If the volume discount will not expire, then leave this field blank.
Currency	Enter the currency in which the volume discount is applied.
Exchange Date	If you are converting currencies, then enter the date for the currency exchange rate. The Siebel application will use the exchange rate on that day to convert currency.

Creating Volume Discount Line Items

This task is a step in Process of Setting Up a Volume Discount.

Volume discount line items include information about quantity range and the corresponding price adjustments.

Add a volume discount line item for each quantity range in the volume discount. For example, if you want to apply a 10 percent discount when the quantity is between five and ten, and a 20 percent discount when the quantity is 11 or more, then you must add two volume discount line items.

When you add volume discount line items, be careful not to create gaps or overlapping quantities, which result in the following errors:

If you leave a gap in a simple discount, then quantities that fall within the range of the gap receive no discount at all.
If you leave a gap in a tiered discount, then quantities that fall within the range of the gap default to the lower tier.
If you create overlapping discount items and quantity ranges, then the discounting behavior is not predictable.

How the discounts in the line items are applied depends on whether this is a simple or tiered volume discount, as described in About Volume Discounts.

To create a volume discount line item

Navigate to the Administration - Pricing screen, then Volume Discount view.
Select the volume discount for which you want to create line items.
Click the Volume Discounts Line Items view tab.

In the Volume Discounts Line Items list, add a new record and complete the necessary fields. Some fields are described in the following table:

Field	Comments
Name	Enter a name for this volume discount line item. This name appears in the quotes that your sales representatives create for customers, so use a name that describes the discount, such as “10 percent Discount for Buying 5 to 10." The value in this field is also used to create an upsell message about the additional quantity to purchase in order to get a bigger discount.
Min Qty	Enter the minimum quantity that must be purchased to get this discount rate.
Max Qty	Enter the maximum quantity that gets this discount rate. If this field is blank, then this discount rate applies to all quantities greater than the minimum quantity.
Adjustment Type	Select the type of the adjustment that the discount will apply. Options are Discount Amount, % Discount, Markup Amount, % Markup, Price Override.
Adjustment Amount	The value in the Adjustment Type field determines how the adjustment amount is applied, as follows: If the Adjustment Type is Discount Amount, then the value in the Adjustment Amount field is subtracted from the price. If the Adjustment Type is % Discount, then the value in the Adjustment Amount field is treated as a percentage and is subtracted from the price. For example, if the Adjustment Amount is 10, then 10 percent is subtracted from the price. If the Adjustment Type is Markup Amount, then the value in the Adjustment Amount field is added to the price. If the Adjustment Type is % Markup, then the value in the Adjustment Amount field is treated as a percentage, and is added to the price. If the Adjustment Type is Price Override, then the value in the Adjustment Amount field is used instead of the price.

Linking the Volume Discount to a Price List or Discount Matrix

To apply the volume discount, you have to link it to a price list line item or a discount matrix line item. This task is a step in Process of Setting Up a Volume Discount.

Linking a Volume Discount to a Product in a Price List

Use the following procedure to link a volume discount to a product in a price list.

To link a volume discount to a product in a price list

Navigate to the Administration - Pricing screen, then Price Lists view.
In the Price Lists list, select the price list to which you want the volume discount to apply.
Click the Price List Line Items view tab.
Select the line item you want.
In the Price List Line Items Detail form, in the Volume Discount field, select the volume discount you want to apply to that line item.

Linking a Volume Discount to a Line Item in a Matrix

Use the following procedure to link a volume discount to a line item in a discount matrix.

To link an volume discount to a line item in a discount matrix

Navigate to the Administration - Pricing screen, Discount Matrices, and then Discount Details view.
In the Discount Details form, in the Volume Discount field, select the volume discount.