When the Residual Approach is Used to Estimate the Standalone Selling Price

Revenue Management estimates the standalone selling price for a performance obligation when an order line within the obligation consists of the Use Residual Approach designation or it is identified in a performance obligation template with the Use Residual Approach designation.

This table shows the two residual approach methods you can use:

Residual Approach Methods

Residual Approach Method	Navigation	Details
Revenue Basis Data Import template	In the VRM_SOURCE_DOC_LINES tab of the Revenue Basis Data Import template, enter Y in the Use Residual Approach column, which indicates whether the order line should use the residual approach when estimating the standalone selling price.	When the Use Residual Approach column for the order line within the obligation equals Y, the application: Estimates the standalone selling price using the residual approach. Excludes the order line from existing standalone selling price validations. Ignores the unit standalone selling price provided on the transaction line. When the Use Residual Approach column equals Y for one or more promised detail lines within a performance obligation, the application estimates the extended standalone selling price for the performance obligation using the residual approach. Note: The Derive Pricing Dimension Combination functionality on the Create Performance Obligation Template page is used only as a secondary grouping mechanism and has no impact on the residual estimate calculation.
Create Performance Obligation Template page	In the Create Performance Obligation Template page, click the Use Residual Approach check box.	When the Use Residual Approach check box is enabled, the application: Estimates the standalone selling price using the residual approach. Excludes the performance obligation from standalone selling price validations. Note: The Derive Pricing Dimension Combination functionality on the Create Performance Obligation Template page is used only as a secondary grouping mechanism and has no impact on the residual estimate calculation.

Residual Approach Method

Navigation

Details

Revenue Basis Data Import template

In the VRM_SOURCE_DOC_LINES tab of the Revenue Basis Data Import template, enter Y in the Use Residual Approach column, which indicates whether the order line should use the residual approach when estimating the standalone selling price.

When the Use Residual Approach column for the order line within the obligation equals Y, the application:

Estimates the standalone selling price using the residual approach.

Excludes the order line from existing standalone selling price validations.
Ignores the unit standalone selling price provided on the transaction line.
When the Use Residual Approach column equals Y for one or more promised detail lines within a performance obligation, the application estimates the extended standalone selling price for the performance obligation using the residual approach.

Note: The Derive Pricing Dimension Combination functionality on the Create Performance Obligation Template page is used only as a secondary grouping mechanism and has no impact on the residual estimate calculation.

Create Performance Obligation Template page

In the Create Performance Obligation Template page, click the Use Residual Approach check box.

When the Use Residual Approach check box is enabled, the application:

Estimates the standalone selling price using the residual approach.
Excludes the performance obligation from standalone selling price validations.