4Charges, Elements, Parameters, and Rounding

This chapter contains the following:

Charges, Elements, and Parameters

Create a pricing charge definition that defines the charges Oracle Fusion Pricing combines to determine the total price for an item.

An item might include more than one charge, such as a one-time sale charge and an administration charge. You can create a pricing charge definition that adds a handling fee to this item.

You reference a pricing charge definition from a pricing rule that you create in the Pricing Administration work area. For examples, see these topics.

  • Manage Price Lists

  • Manage Cost Lists

Manage pricing charge definitions.

  1. Sign into Order Management with setup privileges, such as ORDER_MGR_OPERATIONS.

  2. In the Navigator, click Setup and Maintenance.

  3. In the Setup and Maintenance work area, open the task.

    • Offering: Order Management

    • Functional Area: Pricing

    • Task: Manage Pricing Charge Definitions

  4. On the Manage Pricing Charge Definitions page, in the Search area, set Active to Yes, then click Search.

  5. Examine the pricing charge definitions that come predefined with Pricing, such as for price, shipping, freight, handling, insurance, or returns.

    To reduce maintenance, use a predefined pricing charge definition instead of creating a new one.

  6. If you can't locate a pricing charge definition that meets your requirements, then click Actions > Add Row, then set values.

    Attribute Description

    Applies To

    Apply the pricing charge definition to a price charge, return charge, or a shipping charge.

    Pricing doesn't come predefined to process a return charge, such as a restocking fee, but you can use the Manage Returns Price Lists page to configure a returns price list.

    Price Type

    Choose One Time or Recurring to specify how Pricing uses the charge for the item. Use Recurring for a charge that recurs, such as a subscription.

    Charge Type

    Choose the type of charge that Pricing uses for the item.

    • Sale. For a tangible item, such as a computer monitor.

    • Service. For a service, such as performing service on a computer monitor.

    • Freight. For freight charges, such as the charges incurred to ship an item.

    Charge Subtype

    Provide details about the charge, such as whether the charge is a Price or a Fee. For example, a service charge might include an installation charge and a delivery fee.

    Price Periodicity UOM Class

    Specify the time period that Pricing uses when it applies a recurring charge. For example, Weekly or Monthly.

    Tax Charge Type

    Specify how to use this pricing charge definition for tax purposes, such as Commercial discount, Freight charge, Insurance charge, Miscellaneous charge, or Packing charge.

    Refundable

    Add a check mark to allow Pricing to refund the charges that this pricing charge definition references.

    Setup Enabled

    Add a check mark to associate the pricing charge definition with pricing entities.

    • If the Active option contains a check mark, and if the Setup Enabled option doesn't contain a check mark, then the pricing charge definition can use the pricing entities that it currently references, but you can't associate other pricing entities with the pricing charge definition.

    • If you must disable a pricing charge definition but must not delete it because historical data continues to use it, then remove the check mark from Setup Enabled. Pricing will prevent you from assigning a pricing charge definition to a pricing entity in the Pricing Administration work area, but the pricing charge definition will remain active so it can support records that contain historical data.

    Active

    Add a check mark to make the pricing charge definition available for use.

    Make sure the Setup Enabled option and the Active option each contain a check mark so Pricing can use the pricing charge definition at run time.

    Calculate Margin

    Add a check mark to calculate the profit margin for the pricing charge definition.

Use a price element to capture different price points in a price calculation.

A price point is the price you set for a charge. Base list price, tier adjustment, list price, discount adjustment, net price, and cost of goods sold are each an example of a price point.

A price element is an object that a pricing algorithm uses to capture different types of prices, costs, adjustments, taxes, or profit margins that it requires to create a price breakdown or pricing analytic.

Pricing calculates the value for each price element when it runs the pricing algorithm. List price is an example of a price element. It might calculate the value of the list price for the AS54888 Desktop Computer at $2,500.

Manage price elements.

  1. Sign into Order Management with administrative privileges.

  2. In the Navigator, click Setup and Maintenance.

  3. In the Setup and Maintenance work area, open the task.

    • Offering: Order Management

    • Functional Area: Pricing

    • Task: Manage Price Elements

  4. On the Manage Price Elements page, in the Search area, set Active to Yes, and then click Search.

  5. Examine the price elements that come predefined with Pricing.

    To reduce maintenance, use a predefined price element instead of creating a new one.

  6. If you can't locate a predefined price element that meets your requirements, then click Actions > Add Row, then set values.

    Attribute Description

    Element Code

    Enter a unique code that identifies the price element. The code makes sure you don't create a duplicate price element that might result in a conflict error.

    Element Name

    Enter a name. Pricing displays the name in the price breakdown and in the Pricing Administration work area.

    You can modify the name of a predefined price element.

    Type

    Choose a type, such as Price or Cost.

    Used in Pricing Guidelines

    Enable this option to add another layer of control in your pricing guidelines.

    For example, price element Base List Price comes predefined to enable you to use it in a pricing guideline. Assume you create 10 pricing guidelines, and six of them enable the user to modify the base list price, among other elements. Two years later, your company creates a policy that prohibits users from modifying the base list price. Instead of revising the six guidelines, you can disable Used in Pricing Guidelines for price element Base List Price.

    You can't enable this option with an element of type Cost or type Accrual because Pricing calculates the value for these elements.

    Active

    Add a check mark. Pricing only uses pricing elements that are active.

    If the pricing entity.

    • Doesn't reference the price element. You can remove the check mark to remove the price element from calculations, but keep it for possible later use.

    • References the price element. You can't remove the check mark.

Set up the pricing basis that Oracle Fusion Pricing uses to calculate an adjustment.

Each pricing basis references a price element, such as List Price or Invoice Price, to calculate the discount that it applies on an item. The price element is one of the components on the pricing charge.

You can manage these pricing bases.

Type of Pricing Basis Description

Adjustment Basis

Adjust the price according to a percent.

  • For example, create an adjustment basis that applies a 20% discount on the list price of a network of desktop computers.

    For another example, apply a 10% discount on the installation charge for a network of desktop computers.

  • Set up the adjustment on the list price, base price, or net price, resulting in different invoice values for the network of computers.

Tier Basis

Adjust the price according to an amount.

  • A tier basis aggregates price for a single pricing charge or a set of pricing charges.

    For example, if a one-time sale charge is greater than $2,000, then apply a 10% discount on the base price.

    For another example, determine the one-time sale charges for the QP LIST PRICE charge component.

  • The tier basis contains the details of the pricing charges and the charge components that Pricing uses to calculate the adjustment. It references the price type, charge type, charge subtype, and price periodicity. These details are important when more than one charge exists for an item.

  • Include or exclude charges. For example, assume a third-party contractor installs the item you sell, so you don't want to offer a discount on the installation. Create a pricing basis that includes only the one-time sale charge and a monthly recurring service charge, but that excludes the one-time installation charge.

  • Specify whether to apply the tier basis to each order line or the entire sales order.

  • To calculate the tier basis at run time, Pricing aggregates the charges that match the criteria you set up.

Assume you must add a tier basis for the sale, installation, and monthly service for a network of desktop computers. Assume you must apply the tier basis on these charges.

  • A one time charge on the list price of the sale

  • A one time charge on the list price of the installation fee

  • A recurring charge on the list price of the monthly service fee

Assume you sell to a distributor who ships the item and handles the freight and shipping charges, so you must exclude freight charges from your pricing basis.

This topic includes example values. You might use different values, depending on your business requirements.

Manage a pricing basis.

  1. In the Navigator, click Setup and Maintenance.

  2. In the Setup and Maintenance work area, go to the task.

    • Offering: Order Management

    • Functional Area: Pricing

    • Task: Manage Pricing Bases

  3. On the Manage Pricing Bases page, in the Search area, set Active to Yes, then click Search.

  4. Examine the pricing bases that come predefined with Pricing.

    To reduce maintenance, you use a predefined pricing basis instead of creating a new one.

  5. If you can't locate a predefined pricing basis that meets your requirements, then click Actions > Create.

  6. On the Create Pricing Basis page, set values.

    Attribute Value

    Usage

    Tier Basis

    Price Element

    List Price

    Price Type

    One Time

    Charge Type

    Sale

    Charge Subtype

    Price

    Active

    Contains a check mark

  7. Click Add Charge Criteria.

  8. In the Criteria for Included Charges area, notice that the Create Pricing Basis page already added a row that includes the criteria you specified in step 6.

  9. Add the criteria for the installation fee. In the Criteria for Included Charges area, click Actions > Add Row, then set values.

    Attribute Value

    Price Type

    One Time

    Charge Type

    Sale

    Charge Subtype

    Fee

  10. Add the criteria for the monthly service fee. In the Criteria for Included Charges area, click Actions > Add Row, then set values.

    Attribute Value

    Price Type

    Recurring

    Charge Type

    Service

    Charge Subtype

    Fee

    Price Periodicity

    Month

    Pricing gets the values it displays for Price Periodicity from the UOM class that you define in the pricing charge definition. If you don't define this UOM class, then Pricing gets these values from the Default Pricing Periodicity UOM class. For details, see the Manage Pricing Charge Definitions topic.

  11. Add the criteria for the excluded charges. In the Criteria for Excluded Charges area, click Actions > Add Row, then set values.

    Attribute Value

    Price Type

    One Time

    Charge Type

    Freight

    Charge Subtype

    All

  12. Click Save.

  13. Reference your pricing basis from a pricing rule that you create in the Pricing Administration work area.

    For details, see the Add Tiers to Pricing Rules topic.

Use a pricing parameter to manage behavior that applies across the Pricing Administration work area.

Each pricing parameter comes predefined with Oracle Fusion Pricing. You can't create or delete a pricing parameter, but you can modify a parameter value.

Manage pricing parameters.

  1. In the Navigator, click Setup and Maintenance.

  2. In the Setup and Maintenance work area, open the task.

    • Offering: Order Management

    • Functional Area: Pricing

    • Task: Manage Pricing Parameters

  3. On the Manage Pricing Parameters page, modify the parameters, as necessary.

    Pricing Parameter Description

    Default Price Periodicity UOM Class

    Set the default value that Pricing displays in the Pricing Administration work area for the price periodicity attribute. Pricing uses this value for each recurring charge or usage charge for this attribute.

    For example, set the default value to Weekly, Monthly, or Per Quarter. If you set it to Weekly, then Pricing displays Weekly as the default value for price periodicity when you create a pricing entity, such as a price list, in the Pricing Administration work area.

    For details about how to set price periodicity, see the Manage Pricing Charge Definitions topic.

    Item Validation Organization

    Set the item validation organization that Pricing uses for each business unit when it validates an item.

    • Pricing filters the items that it displays according to the item validation organization you choose. For example, if you choose Vision Operations as the business unit, and V1 as the Organization, then Pricing only displays items that are part of the V1 organization when you create a pricing entity in the Pricing Administration work area.

    • Product Information Management associates each inventory organization with a business unit, and it determines the values you can choose for the organization. For details about how to set up Product Information Management, see the Implementing Common Features for Oracle SCM Cloud book.

    • If you don't define an item validation organization, then you can't view items in the Pricing Administration work area.

    Product Catalogs

    Choose the product catalog that Pricing uses to calculate the price, adjustments, and costs for each item according to a product catalog.

    Pricing doesn't support product catalogs in the current release.

  4. Click Save.

Rounding

Use a rounding rule to replace a value with some other value that's shorter, simpler, or more explicit.

Apply a rounding rule to a price to make sure you apply rounding consistency across pricing algorithms.

Create a complex rounding rule. For example, create rounding rules to meet the needs of a local cultural preference, or that your company policy requires.

  • Round each price to 0.97 or 0.99 for companies that reside in the United States, and round each price to 88 for companies that reside in China.

  • Round each price that includes a value.

    • Between 1 and 100 to a precision of 4

    • Between 100.001 and 10000 to a precision of 2

    • Greater than 10000.01 to a precision of 0

Summary of the Steps

Manage a rounding rule.

  1. Create the rounding rule.

  2. Assign the rounding rule to a currency.

  3. Refresh the order promising server.

This topic includes example values. You might use different values, depending on your business requirements.

Create the Rounding Rule

  1. In the Navigator, click Setup and Maintenance.

  2. In the Setup and Maintenance work area, open the task.

    • Offering: Order Management

    • Functional Area: Pricing

    • Task: Manage Rounding Rules

  3. On the Manage Rounding Rules page, in the Name attribute, enter %, then click Search.

    The Manage Rounding Rules page displays the predefined rounding rules.

  4. Examine the predefined rounding rules.

    To reduce maintenance, use a predefined rounding rule instead of creating a new one.

  5. If you can't locate a predefined rounding rule that meets your needs, then click Actions > Add Row, then set values.

    Attribute Description

    Name

    Enter text that Pricing can use to reference the rounding rule.

    • Enter alphanumeric text.

    • Use headline capitalization.

    • Use an underscore to separate each word.

    Type

    For details, see the Rounding Rule Types topic.

    Round To

    For details, see the Rounding Rule Types topic.

    Direction

    Set to one of these values.

    • Up. Round values up.

    • Down. Round values down.

    • Standard. Round values according to a standard. Standard makes sure Pricing performs mathematical, half up rounding, such as rounding $1.75 up to $2.

    Incremental Value

    For details, see the Rounding Rule Types topic.

    Setup Enabled

    Enable or disable.

    • Add a check mark. Make this rounding rule available at run time.

    • Remove the check mark. Make this rounding rule available at run time, but prevent a user from assigning a currency to it on the Manage Rounding Rule Assignments page.

      This feature is useful when you must discontinue usage of a rounding rule but can't delete it because historical data still uses it.

    Active

    Add a check mark to make this rounding rule available at run time.

  6. Click Save and Close.

Assign the Rounding Rule to a Currency

As an option, you can assign the rounding rule to a currency. If your business uses more than one currency, then you can specify the currency that the rounding rule affects. Use this feature to create more than one rounding rule, then assign a different currency to each of them.

  1. In the Setup and Maintenance work area, open the task.

    • Offering: Order Management

    • Functional Area: Pricing

    • Task: Manage Rounding Rule Assignments

  2. On the Manage Rounding Rule Assignments page, click Actions > Add Row, then set values.

    Attribute Description

    Currency

    Choose the currency you must assign to this rounding rule.

    Rounding Rule

    Choose the rounding rule you created earlier in this topic.

    At run time, Pricing applies this rounding rule only to an item that uses the currency that you set in the Currency attribute.

Refresh the Order Promising Server

Refresh the Order Promising server each time you add, modify, or remove a rounding rule.

  1. Go to the Scheduled Processes work area.

  2. On the Overview page, click Schedule New Process, then search for Refresh and Start the Order Promising Server.

  3. Set parameters, then click Submit.

    Parameter Value

    Fulfillment Lines

    Contains a check mark.

    Sourcing

    Contains a check mark.

    Items

    Contains a check mark.

  4. Verify that the scheduled process finished successfully.

Types of Rounding Rules

Create different types of rounding rules.

  • Round to precision

  • Round to nearest

  • Round to the nearest multiple

  • Round to range

Round to Precision

Here's some examples that use round to precision, where Round To specifies to round according to a decimal place value.

Price Round To Direction Rounded Value

$15.75

0

Up

$16.00

$15.75

0

Down

$15.00

$15.75

0

Standard

$16.00

$187.57

-1

Standard

187.6

$187.5

0

Standard

188

$187.5

1

Standard

190

$187.5

2

Standard

200

$187.587

-2

Standard

187.59

Round to Nearest

Here's some examples that use round to nearest, where Round To specifies the value to use when rounding.

Price Round To Direction Incremental Value Rounded Value

$0.22

.05

Up

0.10

$0.25

$0.22

.05

Down

0.10

$0.15

$0.22

.05

Standard

0.10

$0.25

Pricing adds the Increment Value according to the value that you set for Round To. You can also manually modify the Increment Value. You can specify an increment of a whole, a tenth, a hundredth, or a whole multiple of a decimal, such as 0.5 or 0.25.

Round to the Nearest Multiple

Here's some examples that use round to the nearest multiple to round to the nearest multiple of the Round To value. For example, if you set Round To to 5, then the multiples of Round To are 5, 10, 15, 20, and so on. The Standard direction rounds down to the nearest value.

Price Round To Direction Rounded Value

$15.75

5

Up

$20.00

$15.75

5

Down

$15.00

$15.75

5

Standard

$15.00

Round to Range

Here's some examples that use round to range to round to a range of values that you specify.

Price Round Value Rounding Rule Type Rounded Value Direction Increment Value

$0

100

Round to nearest

0.99

Standard

1

$100

10,000

Round to nearest

9

Standard

10

$10,000

10,500

Round to value

10,500

Standard

Not applicable

You can identify more than one range and define a separate rounding rule for each range. Here's the round rule types you can use.

  • Round to precision. Round to a precision.

  • Round to nearest. Round to the nearest value.

  • Round to the nearest multiple. Round to the nearest multiple of the value.

  • Round to value. Round to a fixed value.

You can set only one rounding rule for each range of values.