Understanding Standard Price Adjustments

After you define base prices, you can set up these types of price adjustments:

• Price adjustments for groups of items.

• Contract pricing, which applies special pricing for an item to a single customer or customer group.

The system prices an order in this sequence:

1. Any item price that you enter in the order overrides the base price that the system retrieves.

   You can set processing options in the Sales Order Entry programs (P4210 or P42101) to protect the sales order detail price fields and price related fields.

2. A trade discount that you define through the Customer Billing Instructions overrides all other pricing or repricing.

   A trade discount is a flat percentage that is calculated against the order total, the system calculates the percentage against the price for the item based on the branch/plant from which it is sold, and no other discount or pricing agreement applies.

3. A contract price, which is an agreed-upon price between you and the customer for a specific item. A contract price for a specific customer takes precedence over a contract price for a group of customers.

   A contract price 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.

   The order date must be within the effective dates of the contract price. The system retrieves the contract price based on the base price preference hierarchy and uses the price with the earliest expiration date.

4. The system retrieves inventory pricing rules for a specific customer, if you have defined them, before the system retrieves rules that are defined for a group of customers.

   An inventory pricing rule is an agreed-upon price between you and the customer for discounts based on quantities of items purchased.

   The order date and quantities must be within the effective dates and levels of the inventory pricing rule.

5. If you do not define trade discounts, contract prices, or inventory pricing rules, the system retrieves the base price.

   The system searches item or item group and customer or customer group combinations based on the base price preference hierarchy, and uses the price with the earliest expiration date and corresponding currency code.

   If the system does not find a price for the item within a branch/plant or location (depending on the pricing level), you receive an error message indicating that no base price is in effect.