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This chapter contains the following:

What's New in Administering Pricing

Get details about what's new or significantly revised for each release of Oracle Fusion Pricing.

Release 13 (update 20B)

These topics are new or significantly revised.

Topic Description

Set Price Periodicity to a Granular Level

New. Set Price Periodicity to a sufficiently granular value so it meets your customer's requirements.

External Systems

Revised section. Includes new and revised topic about how to get price details from systems that reside outside of Oracle Fusion Pricing.

Pricing Rules

Revised. Search for older pricing rules that have expired or are about to expire.

Import Price Lists

Revised. Use an Excel spreadsheet to import a batch of price lists.

Manage Pricing Strategy

Revised. Add a check mark to the Allow Price List Override option only if you modify a pricing algorithm so it supports a price override.

Release 13 (update 20A)

These topics are new or significantly revised.

Topic Description

Example of How Pricing Algorithms Price Items

New. Learn how a pricing algorithm prices an item. Use this knowledge to write or modify an algorithm that meets your specific pricing requirements.

Create a Sandbox So You Can Edit Service Mappings

New. You must use a sand box when you edit a service mapping. If you access the Manage Service Mappings page outside of a sand box, then the page disables the actions you need to edit the mapping.

Guidelines for Importing Batches of Discount Lists

Revised. Use the UPDATE operation to update a discount list that already exists.

Manage Modifications Through Releases

Revised. Export and import your pricing algorithms between environments.

Release 13 (update 19D)

These topics are new or significantly revised.

Topic Description

Import Discount Lists

New section. Save time and work more efficiently. Import a batch of discount lists instead importing them individually.

Modify Pricing Totals for Order Management

New topic. Modify the pricing totals that the Order Management work area displays.

Guidelines for Importing Batches of Discount Lists

New topic. Save time and work more efficiently. Import a batch of discount lists instead importing them individually.

Control Explosion Dates for Configuration Models

New topic. Specify the date when order fulfillment explodes a configuration model.

Use Null Values as Filters

New topic. Use a null value in your pricing setup to filter pricing segments that Pricing considers when it prices an item.

Pricing Process

Revised. The algorithm doesn't calculate tax when the user adds an item to an order line. Instead, it calculates tax only after the user does an action.

Troubleshoot Pricing Setup

Revised. Correct a problem that causes the Add Row action on the Attribute Mappings tab to be grey and not active.

Manage Price Details on Order Lines

Revised. Learn how to use the sand box so you can edit a service mapping.

Manage Pricing Matrix

New application behavior. In some situations, you use search and select instead of choosing from a list of values when you create a pricing matrix.

Release 13 (update 19C)

These topics are new or significantly revised.

Topic Description

Use Different Currencies for the Same Customer

New topic. Set up pricing so you can use different currencies for the same customer.

Include or Exclude Tax on List Price

New topic. Specify whether to include or exclude tax on the list price.

Set Up Pricing Without Customer Profile

New topic. Set up pricing without managing customer profiles under certain conditions.

Adjust Price According to Ship to Location

New topic. Adjust the price that Pricing calculates on the order line according to the ship to location you set on the order header.

Adjust Price According to FOB Attribute

New topic. Set up pricing so it adjusts price according to the FOB attribute on the order line.

Troubleshoot Pricing Setup

Revised topic. Fix a problem when the wrong currency displays on the order line.

Fix a problem when a line in the price breakdown on a sales order doesn't display a value until you click Save or Submit.

Release 13 (update 19B)

These topics are new or significantly revised.

Topic Description

Set the Time Zone for Pricing Administration

New topic. Specify the time zone that Pricing uses. For example, the Start Date attribute and the End Date attribute on the Edit Price List page.

Troubleshoot Pricing Setup

New topic. Get details about how to troubleshoot your pricing setup.

Manage Modifications Through Releases

New topic. Get details about how to reconcile modifications you made during an earlier release into the current release.

Pricing Matrixes

Revised section, including new topics. Includes new details about how to set up the matrix class, set the compare to attribute, and specify values that will display as choices.

Use Cases, Extensibles

Revised section. Includes new details about how to use extensible flexfields with Pricing, including how to set up the pricing matrix.

Service Mapping

Revised section. Includes new topics and details about how to use a service mapping to integrate Pricing with inputs to pricing, objects in Pricing, and outputs from Pricing.

Pricing Algorithm

Revised section. Includes new topics and details about how to use a pricing algorithm to calculate price.

Manage Price Details on Order Lines

Revised topic. Display only the recurring charge, not the sale price, for items that recur.

Manage Price Details on Order Lines

Revised topic. You can set up only one recurring charge for each fulfillment line.

Entire book

All topics have been updated so they're more conversational and less formal. Some content has been restructured and revised to improve effectiveness.

Release 13 (update 18C)

These topics are new or significantly revised.

Topic Description

Overriding Base List Price: Procedure

New topic. Use an extensible flexfield to override the base list price.

Adjusting Price According to Predefined Attributes: Procedure

New topic. Adjust price according to modifications that you make to a predefined attribute.

Release 13 (update 18B)

These topics are new or significantly revised.

Topic Description

Defining Discounts That Accumulate or Cascade: Procedure

New topic. Apply discounts that accumulate or cascade on a price list.

This content previously appeared in Document ID 2248583.1 (White Papers for Oracle Fusion Pricing) on My Oracle Support. It has been rewritten and updated to support the current release.

Assigning Pricing Strategy According to Order Type: Procedure

New topic. Assign pricing strategy according to the type of sales order.

This content previously appeared in Document ID 2248583.1 (White Papers for Oracle Fusion Pricing) on My Oracle Support. It has been rewritten and updated to support the current release.

Assigning Pricing Strategy According to Precedence: Procedure

New topic. Define pricing strategies that reference different pricing segments according to pricing precedence, but still use a default pricing strategy, such as Corporate Pricing Strategy.

This content previously appeared in Document ID 2248583.1 (White Papers for Oracle Fusion Pricing) on My Oracle Support. It has been rewritten and updated to support the current release.

Defining Price Lists for Each Customer: Procedure

New topic. Define price lists according to the requirements for each customer.

This content previously appeared in Document ID 2248583.1 (White Papers for Oracle Fusion Pricing) on My Oracle Support. It has been rewritten and updated to support the current release.

Promoting Pricing Algorithms Into the Current Release: Procedure

New topic. Use the Promote All action to incorporate changes that Oracle Fusion Pricing provides in new algorithms in the current release into pricing algorithms from the prior release. These changes include new features and corrections to features that already exist.

Verifying the Source Code for Pricing Algorithms: Procedure

New topic. Click View Source to verify the source code of a pricing algorithm.

Managing Price Details on Order Lines: Procedure

Revised topic. You can use a pricing results presentation or modify the Sales service mapping to specify how to display each price element in a price breakdown.

Release 13 (update 18A)

These topics are new or significantly revised.

Topic Description

Managing Pricing Rules and Pricing Profiles in Spreadsheets: Explained

Managing Pricing Rules and Pricing Profiles in Spreadsheets: Procedure

New topics. You can use a Microsoft Excel workbook to modify more than one price list, discount list, or customer pricing profile to reflect changes to your pricing policies and profitability targets. You can apply these changes to multiple objects, such as all of your price lists, in Oracle Fusion Pricing.

Managing Pricing for Configured Items: Procedure

New topic. You can define pricing for a configured item in a price list or a discount list.

Caching Data in Pricing: Explained

Caching Data in Pricing: Procedure

New topics. To improve application performance, you can cache pricing data to reduce the number of times required to initialize objects and to minimize round trip database processing.

This content previously appeared in Data Caching in Pricing (Doc ID 2163563.1) on My Oracle Support at https://support.oracle.com.

Release 13 (update 17D)

These topics are new or significantly revised.

Topic Description

Managing Pricing Strategies: Procedure

Revised topic. You can define a default currency and specify whether or not a user can override it when the user creates a sales order.

Release 13 (update 17C)

These topics are new or significantly revised.

Topic Description

Setting Up Item Extensible Attributes in Pricing: Overview

Setting Up Item Extensible Attributes in Pricing: Procedure

In some situations, your business requirements might need to calculate or adjust a price according to the attributes of the item, but it might be too cumbersome to define these calculations for each item. Instead, you can define item attributes on an item class to represent details about the item, and then reference these details in a pricing rule that determines the price or discount.

Setting the Domain of a Result Column section in Managing Matrix Classes: Procedure

Revised topic. You can now set Item Extensible Attribute as the Domain Type to get a value from an attribute that you define on the Manage Item Attribute Groups and Attributes page.

Release 13 (update 17B)

These topics are new or significantly revised.

Topic Description

Allowing Users to Adjust Price: Procedure

Configure Oracle Fusion Pricing to allow an authorized person to adjust price and at the same time control the adjustment amount to prevent an unprofitable discount.

Managing Pricing Guidelines: Described

Managing Pricing Guidelines: Procedure

A pricing guideline is a rule that you define for an item, user role, customer details, or time period that controls modifications to price, net price, margin, and so on. You can create a pricing guideline for each pricing component according to your business requirements.

Managing Pricing for Covered Items: Described

Managing Pricing for Covered Items: Procedure

A coverage item is an item that adds value by providing coverage for a covered item. For example, a six month warranty is a coverage item for a laptop computer, and the laptop computer is the covered item. You can administer coverage pricing rules on a price list to manage the rules between each coverage item and each covered item.

Getting Details for Pricing from External Systems: Explained

Getting Details for Pricing from External Systems: Procedure

Configure a pricing algorithm to call a web service that resides outside of Oracle Fusion Pricing, get data from an external system, and then leverage it as part of your pricing calculation.

Managing Service Mappings: Explained

A service mapping contains entities, sources, and services. Pricing uses it to map the input SDO to the output SDO.

Managing Pricing Algorithms: Worked Example

In this example, you define pricing algorithms so that they use an extensible flexfield to override the net price of a pricing charge on a fulfillment line.

Using Extensible Flexfields with Pricing: Procedure

Use an extensible flexfield to determine how to calculate pricing. In this example, you use the sales channel attribute of an extensible flexfield to determine the pricing strategy.

Pricing Architecture: How It Works

Revised topic. Includes new details that describe how pricing algorithms calculate price for sales orders.

White Papers for Oracle Fusion Pricing

Revised topics. Includes new details about set ups you can perform to modify your pricing implementation. search for Document ID 2248583.1 (White Papers for Oracle Fusion Pricing) on My Oracle Support at https://support.oracle.com, and then download the attachments.

Use Oracle Fusion Pricing to plan, manage, apply, and enforce pricing so its consistent and profitable throughout your order-to-cash process.

Use Oracle Fusion Pricing to plan, manage, apply,
and enforce pricing so its consistent and profitable throughout your
order-to-cash process.

Note.

  • Plan pricing strategies so they align with your business objectives. Use characteristics of your customer, the item, and the buying context to identify market segments.

  • Manage the pricing rules that control how Pricing applies a price adjustment. For example, administer a discount on the list price of an item.

  • Apply common pricing logic across all sales channels. Achieve consistent and accurate pricing throughout the order-to-cash process.

  • Enforce spending limits to prevent an excessive discount. Make sure pricing is accurate so it meets your corporate revenue and margin objectives.

Plan

Plan How You Will Segment Customers

  • Segment your customers so you can optimize the price you charge for an item according to the buying characteristics of your customers.

  • Define pricing segments so you can sell the same item to different customers in different markets according to their willingness to pay.

  • Specify who and under what circumstances to vary price to achieve the best returns.

Assume you developed the Heart Wrist Watch, a new product that monitors heart rhythms and can communicate the results immediately to a person of the wearer's choice, such as a coach or physician. You're marketing the device to long-distance runners.

Your market research determines you should price according to geographic region.

Your market research determines you should price
according to geographic region.

Note.

  • Use high margin pricing in North America and Europe where your early adopters are willing to pay a premium for the wrist watch.

  • Use lower prices in emerging markets in South America, Africa, and India where you're currently entering the market and are using a loss leader strategy.

  • Use discounted, competitive pricing in China, Korea, and Japan where you're already in a saturated market and are competing against established and new competitors.

Plan Your Profiles, Segments, Assignments, and Strategies

Determine price according to the characteristics of each customer, rather than using one-size-fits-all pricing.

Set up entities in Pricing Administration to determine
price according to the characteristics of each customer, rather than
having to use one-size-fits-all pricing.

Note.

Object Description

1. Pricing Profile

Create a profile for each of your customers that describes buying characteristics according to customer attributes.

  • Revenue Potential

  • Cost to Serve

  • Value

  • Rating

  • Size

2. Pricing Segment

Group your customers into market segments that exhibit similar buying behavior according to market attributes.

  • Revenue Potential

  • Cost to Serve

  • Value

  • Rating

  • Size

You can also add your own attribute, such as Region.

3. Pricing Strategy Assignment

Assign your pricing strategy according to attributes.

  • Pricing Segment. The pricing segment you assigned to the customer.

  • Channel. Where you receive the sales order, such as direct sales or inside sales.

  • Transaction Type. The type of transaction, such as sales order, service contract, or subscription.

4. Pricing Strategy

Create a pricing strategy that determines how to price your item to achieve your objectives.

  • Set the Business Unit attribute of the pricing strategy to your customer's business unit. Pricing will use this strategy for each sales order that references the business unit.

  • Create pricing rules that specify price, cost, discounts, and currency conversion.

  • Create shipping rules that specify shipping charges.

  • Create guidelines to control modifications that your users can make to price, net price, and margin.

Assume you sell the wrist watch through a direct channel to customer Softgear, located in Seoul, South Korea.

For example, assume you sell it through a direct
channel to customer Softgear, located in Seoul, South Korea.

Here's your set up.

  1. Create a pricing profile for Softgear.

    • You have a long-term, good working relationship with Softgear, so set Value to High.

    • Your research indicates that consumers in East Asia highly value the wrist watch and therefore have a high willingness to pay, so set Revenue Potential to High.

    • Consumers in this region are enthusiastic, early adopters of high-tech products and require little support, so set Cost to Serve to Low.

    • Rating is the perceived value of a customer to your business regarding their history, future outlook, relationship with your company, and so on, so set Rating to High.

    • Softgear is a large international company, so set Size to Large, and they're located in South Korea, so set Region to East Asia.

  2. Create a pricing segment that represents your East Asian market.

    • The East Asian market for high-tech products is highly competitive. You must price the wrist watch at lower, competitive rates, so set Revenue to Medium.

    • Consumers are enthusiastic early adopters, so set Cost to Serve to Low.

    • South Korea is in East Asia, so set Region to East Asia.

  3. Create a pricing strategy assignment that assigns the Corporate Pricing Strategy to direct sales orders that you receive from the East Asia segment.

  4. Use the predefined Corporate Pricing Strategy, which already specifies most of the pricing details that your East Asia segment requires. Modify it, as necessary.

At run time, Pricing will use the Corporate Pricing Strategy to price the wrist watch when you receive a direct sales order for the wrist watch from Softgear.

Manage

Use the Pricing Administration work area to manage all your rules.

Use the Pricing Administration work area to manage
all your rules.

This example applies a one-time, 10% discount on the sale price of the wrist watch during a holiday season that starts on 12/19/18 at 8:16 PM.

Create rules that determine price for your items.

  • Set up sales price, tiered price, discount, surcharge, freight, and adjustment according to attribute.

  • Price a nonconfigured item, configured item, coverage, service, or subscription.

  • Use a one-time charge or a recurring charge.

  • Mark up or mark down, by dollar amount or percent.

  • Apply separate charges for a single transaction, such as a $300 sales price charge for a cell phone, and another charge for the subscription fee for the cell phone.

  • Search across all your rules.

Manage Price Points on Your Price Waterfall

A price waterfall illustrates adjustments and discounts you make on an item, typically from the base list price to your margin.

Here's the Sales Price Charge price waterfall.

Sales Price Charge price waterfall.

Note.

  • This example illustrates the Sale Price charge for an item on a sales order.

  • Include various types of charges that apply to your items and services. For example, installation charge, subscription, delivery fee, sale price, or restocking fee.

  • 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.

    Base List Price, Net Price Plus Tax, and Margin are each an example of a price element.

  • Use the price elements that come predefined with Pricing to define each price point in your waterfall, or create your own elements. For example.

    • Use the Base List Price element with a value of $1,000 to set the starting price point at $1,000.

    • Add the Price Adjustment element with a value of $200 to set the next price point, which is the List Price element at $800.

    • Continue adding whatever elements you need to the waterfall, such as discounts, tier adjustments, tax, margin, and so on.

  • Use a price element as the pricing basis to calculate a price adjustment.

  • Use and modify a predefined price definition, or create your own.

For details about tier adjustments, see the Tier Pricing topic.

Run

Centralize Your Pricing

Create and enforce pricing rules and policies across your entire enterprise.

Create and enforce pricing rules and policies across
your entire enterprise.

Note.

  • Deliver consistent and accurate prices across sales channels, such as web stores, direct sales, partner stores, retail points of sale, and more.

  • Use a flexible architecture and services to integrate pricing across systems and applications.

  • Use a variety of services, such as Price Sales Transaction, Calculate Order Totals, Validate Prices, and more.

Administer Runtime Pricing for Order Management Cloud

Administer runtime pricing for sales orders.

Administer runtime pricing for sales orders.

Note.

  • Calculate list price, net price, shipping, and tax according to your pricing strategy.

  • Calculate one or more charges for each order line. For example, sales price plus installation fee.

  • Price nonconfigured items, configured items, subscriptions, or services.

  • Integrate with Oracle Financials Cloud for determine tax charges.

  • Display the price breakdown and order totals in a dialog according to your requirements.

    For example, for the order line, specify how to calculate charges and specify which charges to display.

    • Base List Price Applied from Price List 1

    • List Price

    • Your Price

    • Exclusive Tax (Vat20 20%)

    • Net Price Plus Tax

Administer Runtime Pricing for Inventory Management Cloud

Administer runtime pricing for transfer orders.

Administer runtime pricing for transfer orders.

Note.

  • Use your set up from the Setup and Maintenance work area of the Manufacturing and Supply Chain Materials Management offering to manage financial orchestration data for material transactions that occur in your global supply network.

  • Use your set up from the Inventory Management work area to receive the event, identify the financial flow to use for the event, and calculate the transfer price.

  • Calculate pricing for internal transfer orders while orchestrating financials, then store it as pricing data in Pricing.

  • Create your pricing strategy according to a predefined matrix class specifically for financial orchestration.

  • Modify the predefined pricing algorithm that Pricing uses for financial orchestration.

  • Mark up or mark down price of the transfer order according to the price list, cost list, or source document price.

  • Create pricing rules for nonconfigured items or configured items.

Enforce

Enforce Controls on Manual Price Adjustments

Enforce controls on the manual price adjustments that your users can make in the Edit Sale Price dialog of an order line.

Enforce controls on the manual price adjustments
that your users can make in the Edit Sale Price dialog of an order
line.

A manual price adjustment is an adjustment that the user manually sets on an order line, such as adding a discount for a sales campaign.

  • Administer the price list to enforce controls on each manual price adjustment.

  • Apply one or more adjustments on the net price.

  • Apply adjustment as a markup or markdown on each new price against a charge.

  • Apply adjustment as a percent or amount.

  • Control adjustments on order lines for buy lines or return lines.

  • Apply adjustments to each rollup charge.

Use Guidelines to Enforce Pricing Policies

Use a pricing guideline to control changes your users make that affect price.

Use a pricing guideline to control changes your
users make that affect price.

In this example, the Order Entry Specialist set the Discount Percent to 5 on the List Price. The adjustment results in a 125 USD discount, which exceeds the maximum of 100 that the guideline specifies. Here's the warning that this example displays.

The price adjustment in row 2 contains the following warnings. The charge has a pricing violation for the price component Custom Adjustment. The price component Custom Adjustment must be less than or equal to 100 USD.

A pricing guideline is a rule you create that controls changes your users can make to price, net price, margin, and so on. You apply it on an item, user role, customer detail, or time period. Pricing evaluates each guideline when it validates the sales order.

  • Manage profitability, discount discipline, or compliance.

  • Make sure sales orders conform to the price and discount strategies that your corporate pricing policies require.

  • Prevent excessive discounts or markups.

  • Prevent unexpected reductions of your profit margin. For example, write a rule that makes sure margin is 20% or more.

  • Specify to display a warning or error when the modification exceeds the guideline.

You set up a customer pricing profile, pricing segment, pricing strategy assignment, and pricing strategy to price an item in a sales order.

These objects, and the price list, cost list, and discount list, are each an example of a pricing entity. A pricing entity is an object that stores details that Oracle Fusion Pricing uses to price an item.

In this example, Pricing prices a sales order it receives from Order Management Cloud for customer Computer Services, who places orders through the direct channel.

how Pricing prices a sales order it receives from
Order Management Cloud for customer Computer Services, who places
orders through the direct channel.

Here's how it works.

  1. Receive a sales order from an Oracle Cloud Application, such as Order Management Cloud.

  2. Use a pricing algorithm that prices the sales order at run time. The algorithm uses these objects.

    • Service mapping

    • Pricing profile

    • Pricing segment

    • Pricing strategy assignment

    • Pricing strategy

    For example, the pricing algorithm calculates the list price, applies discounts, and applies taxes. For details, see the How Service Mappings, Pricing Algorithms, and Matrixes Work Together topic.

  3. Use the pricing profiles you set up to create a relationship between the pricing attributes that describe buying behavior, and each customer.

    In this example, Pricing receives a sales order for Computer Services, who is a large, highly valued, and highly rated customer who exhibits high revenue potential and medium cost to serve. For details, see the Manage Pricing Profiles topic.

  4. Pricing compares each attribute of the pricing profile to each pricing segment until it finds a match. It uses the pricing segments you create to group customers who exhibit a similar set of characteristics and buying behaviors.

    For example, you can group large, highly rated customers who exhibit a medium cost to serve into a single segment, such as Tier 1. The characteristics of the segment and customer match each other.

    Cost to Serve Rating Size

    Customer: Computer Services

    Medium

    High

    Large

    Segment: Tier 1

    Medium

    High

    Large

    So, Pricing uses the Tier 1 pricing segment for Computer Services.

  5. Use the pricing strategy assignment to assign a pricing strategy to the customer. You can use different strategies for the same pricing segment to support more than one selling scenario, or you can use different strategies for different segments. For example.

    • If the Pricing Segment is Tier 1, and if the Transaction is Sales Order, and if the Channel is Direct, then use the Commercial pricing strategy.

    • If the Pricing Segment is Tier 2, then use the Corporate pricing strategy.

  6. Use the pricing strategy to make sure pricing meets your pricing objective. The pricing strategy references rules you create on each list. Pricing uses the lists to calculate price.

    Type of List Description

    Price

    Get the list price for the item.

    Discount

    Get adjustments on the price.

    Cost

    Apply cost plus pricing, when required.

    Currency Conversion

    Determine currency and conversion rate to use, when required.

    Shipping Charge

    Get the shipping charges.

    The user sets the customer in the sales order. Order Management sends a request to Pricing to get the segment and strategy, then displays details in the View Pricing Strategy and Segment dialog.

    In the sales order, the user sets the customer.
Order Management sends a request to Pricing to get segment and strategy,
then displays details in the View Pricing Strategy and Segment dialog.
  7. The user adds an item to the sales order, Pricing calculates the sales order total, then sends the priced sales order, including each pricing charge and charge component, to Order Management.

Oracle Fusion Pricing uses pricing entities, such as price lists and discount lists, to calculate the price of an item and the sales order total.

Assume you integrate Pricing with Order Management Cloud, and Pricing must determine charges for the AS54888 Desktop Computer item.

determine charges for the AS54888 Desktop Computer

Here's how it works.

  1. An order entry specialist adds an order line in Order Management. Order Management sends a request to Pricing to price the sales order, including attribute details that affect pricing.

    Attribute Value

    Customer

    Computer Service and Rentals

    Business Unit

    Vision Operations

    Item

    AS54888

    Unit of Measure

    Each

    Line Type

    Buy

    Quantity

    2

  2. Use pricing profiles, pricing segments, and pricing strategies to identify the pricing strategy to use for this item.

    For details, see the How Pricing Profiles, Segments, and Strategies Work Together topic.

  3. Use a price list that the pricing strategy references to get the base list price for the item.

    A price list sets the price for each item you sell. For details, see the Manage Price Lists topic.

    You define rules that Pricing uses to calculate charges. You define them on the price list, adjustments, discount list, cost list, and so on.

  4. Reference a tier adjustment or an attribute adjustment, then apply it to the item.

    You can specify tier pricing or a pricing matrix to adjust the price that a pricing rule calculates.

    For details, see the Adjust Prices topic.

  5. Calculate list price.

  6. Reference a discount list that applies a discount on the base list price so it can determine net price.

    For example, apply a 10% percent discount on the list price.

    For details about how to define a discount list that applies a flat rate discount, a percent discount, or uses a pricing matrix to define a discount according to an attribute of the item, see the Manage Discount Lists topic.

  7. Calculate net price and return the charge and charge components.

  8. Call Oracle Fusion Tax to calculate sales tax for the item.

    Pricing uses tax details that Oracle Fusion Tax returns to create charge components for taxes.

  9. Calculate profit margin according to costs that the cost lists define.

    You can create a cost list that references a variety of charges, such as item cost, sales commission, or labor cost. For details, see these topics.

    • Manage Cost Lists

    • Cost Plus Pricing

  10. Calculate sales order totals, then communicate the results to Order Management.

Pricing sends price details to Order Management.

Pricing Value

Base List Price

$1,000. From the Corporate price list.

Tier Adjustment

Minus $200.

List Price

$800.

10% Discount

Minus $100.

Net Price

$700.

Extended Amount

$1400.

Note.

  • Depending on your setup, Order Management sends a request to Pricing every time the Order Entry Specialist does something that affects price, such as.

    • Set the Customer attribute on the order header.

    • Add an item to the catalog line.

    • Click Add on the catalog line to add the item to the order line.

    • Change the quantity or unit of measure.

    • Click the pencil in the Your Price column of the order line to manually adjust the price.

    • Set the Shipping Method attribute on the Shipment Details tab, or set other shipping attributes that affect shipping cost. such as Ship Lines Together..

    • Click Actions, then click Reprice Order, or click Validate.

    • Click Submit.

  • Pricing repeats the entire process to recalculate the sales order every time it receives a request from Order Management, including pricing for each order line and the sales order total.

  • An item can include one or more charges, and Pricing returns each of these values as a charge. For example, it returns the value of the unit price as the Sale Price Charge.

  • Order Management updates the price breakdowns and other attributes that display price, such as Amount on the order line and Total on the order header.

  • Pricing comes predefined to perform most of this process without requiring you to modify pricing logic.

  • This topic describes a simplification of the predefined Price Sales Transaction pricing algorithm, which is the primary algorithm that Pricing uses to price an item. You can modify this algorithm. Pricing uses different algorithms to calculate different prices. For example, it uses the Calculate Sales Order Totals pricing algorithm to calculate sales order total. For details, see topic How Service Mappings, Pricing Algorithms, and Matrixes Work Together.

  • This example doesn't include details about taxes or profit margins that the pricing algorithm calculates. For details about how to use a service mapping to display these details, see the Manage Service Mappings topic.

  • Most Oracle Fusion Applications use User Preferred Time Zone when they perform a calculation that includes a date value. However, Pricing uses the server time zone. This might affect the value for some price calculations. For example, calculations that include Start Date and End Date.

For background technical details.

  • Search for ID 2248583.1 (White Papers for Oracle Fusion Pricing) on My Oracle Support at https://support.oracle.com.

  • See the Pricing chapter in book Tables and Views for Oracle Supply Chain Management Cloud on My Oracle Support at https://docs.oracle.com/en/cloud/saas/supply-chain-management/r13-update18a/oedsc/QP-tables.html.

How Pricing Calculates the Catalog Line

The user uses the catalog line to search for an item.

The user uses the catalog line to search for an
item.

Note.

  • The price breakdown on the catalog line displays charges that Pricing calculates for the item according to strategy, segment, rules, and so on.

    Price Component Unit Price Amount

    Base List Price from Corporate Price List

    1,000

    2,000

    Price list adjustment

    Minus 200

    400

    List Price

    800

    1600

    Item quantity adjustment

    Minus 100

    200

    Your Price

    1400

    2800

  • Different charges display depending on how you set up pricing. For example, if you don't add a discount or markup, then the breakdown doesn't include the price list adjustment.

  • This example includes a discount from the price list. It also includes a quantity adjustment when quantity is greater than 1.

  • Some charges are price points and some are adjustments. For example, Base List Price Applied from Corporate Segment Price List indicates that Pricing uses the Corporate Segment Price List to calculate the price point for the base list price.

  • If the quantity is greater than 1, then the Unit Price column displays the price for one unit, and the Amount column displays the extended amount for the charge.

Another Example

Let's use a different example to take a closer look at pricing.

Each sales order includes pricing details.

Each sales order includes pricing details.

Note.

  • Click Actions > View Pricing Strategy and Segment to examine details about the pricing strategy and pricing segment that Pricing applies to the sales order.

  • Click the price total at the top of the sales order to view the price breakdown for the entire sales order.

  • Click the amount on the order line to view the price breakdown for the order line.

How does it work? Try it.

  1. Create a sales order in Order Management but don't set the customer.

  2. Click Actions > View Pricing Strategy and Segment.

    Order Management calls Pricing to get the strategy and segment, but the call doesn't include the customer.

    Order Management calls Pricing to get the strategy
and segment, but the call doesn't include the customer.
  3. Pricing can't populate the profile without the customer, so its blocked from proceeding to determine the segment, assign the strategy, and apply the strategy. It returns nothing or it might return null in the strategy explanation.

    The applicable pricing strategy for the transaction is Pricing Strategy = Corporate Pricing Strategy, Precedence = 100 because Pricing Segment = null.

    Pricing sets the strategy to Corporate Pricing Strategy when it doesn't have enough detail, by default.

    Also, Pricing can't populate the currency because the strategy sets currency.

Now, try this.

  1. Set the customer.

  2. Click Actions > View Pricing Strategy and Segment.

  3. This time, Pricing can populate the profile because it has the customer, it proceeds to determine the segment, assign the strategy, and apply the strategy.

    Pricing sends the results, and Order Management populates the dialog with strategy and segment details, and sets the currency.

    Pricing sends the results, and Order Management
populates the dialog with strategy and segment details, and sets the
currency.

For example, it sets the segment to Corporate Segment and provides an explanation.

The pricing segment for this transaction is Pricing Segment = Corporate Segment, Precedence = 1 because Revenue Potential = Medium, Customer Size = Medium, Cost to Serve = Medium, customer Value = Medium, Customer Rating = Medium.

It sets the strategy to Corporate Pricing Strategy and provides an explanation.

The pricing strategy for this transaction is Pricing Strategy = Corporate Pricing Strategy because Channel Method = null, Transaction Type = null, Pricing Segment = Corporate Segment.

Next, notice the totals are zero because you haven't added an order line.

the totals are zero because you haven't added an
order line.

Assume you set up a price list named Corporate Segment Price List, added the AS54888 to it with a base list price of 2500, added a discount list that provides a $100 discount, and added the price list and the discount list to the Corporate Pricing Strategy.

In the catalog line, add an order line for item AS54888 with a quantity of 2.

In the catalog line, add an order line for item
AS54888 with a quantity of 2.

Order Management sends the item, quantity, and unit of measure to Pricing with a request to price the item.

Pricing determines the strategy, uses the price list to determine the price, the discount list to determine the discount, prices the item, then returns the sale price charge and the catalog line total.

Next, click the 4,800 total on the catalog line. You added a quantity of 2, so the Amount dialog includes unit price and amount column. The dialog describes the price list and the discount list that Pricing used.

The dialog describes the price list and the discount
list that Pricing used.

Here are the values that the Amount dialog displays.

Price Component Unit Price Amount

Base List Price Applied From Corporate Segment Price List

2,500

5,000

List Price

2,500

5,000

Discount Rule SR67 defined for the item AS54888 applied from the discount list

-100.00

-200.00

Your Price

2,400.00

4,800.00

Next, assume you also set up a tier discount rule that provides an additional $100 discount on each unit if the quantity is 10 or more.

Increase the quantity to 10 and see what happens.

Increase the quantity to 10 and see what happens.

Pricing applies the tier rule, recalculates prices, then sends the results.

Notice the Amount dialog dynamically adjusts the details it displays at run time according to the pricing applies. For example, it only adds the Unit column if you add a quantity greater than one, and it only adds a row for the tier discount when the tier applies. This behavior changes according to how you set up Pricing.

Here are the values that the Amount dialog displays.

Price Component Unit Price Amount

Base List Price Applied From Corporate Segment Price List

2,500

25,000

List Price

2,500

25,000

Discount Rule SR67 defined for the item AS54888 applied from the discount list

-100.00

-1000.00

Quantity qualifies item for tiered pricing rule on price list.

-100.00

-1000.00

Your Price

2,300.00

23,000.00

Click Add to move the item from the catalog line to an order line.

Click Add to move the item from the catalog line
to an order line.

Order Management calls Pricing, and Pricing recalculates the order total.

  • Order Management displays price details on the order line and totals in the Total dialog.

  • Pricing sums amounts from all order lines, including discounts.

  • Pricing doesn't calculate shipping and tax until the user saves or submits the sales order.

Click Submit or Save.

Click Submit or Save.

Pricing calculates shipping, tax, and other charges, depending on how you set up pricing. For example, it might add credit, margin, and so on.

Roadmap to Manage Oracle Fusion Pricing

Use this road map to get the big picture of how to manage Oracle Fusion Pricing, including setup and administration.

  • Do the setup first, then the administration.

  • Do the work in the same sequence that each roadmap lists the topics.

  • All steps are optional. The roadmap provides a generic approach to manage Pricing. You might find you only need to do a few steps, depending on the Pricing functionality you need.

Set Up Pricing

Get started. See these topics.

  1. Manage Pricing Charge Definitions

  2. Manage Price Elements

  3. Manage Pricing Bases

  4. Manage Pricing Parameters

  5. Manage Rounding Rules

Set up user interfaces.

  1. Manage Pricing Totals

  2. Manage Pricing Results Presentations

  3. Manage Pricing Messages

  4. Manage Pricing Message Tokens

  5. Manage Pricing Lookups

  6. Manage Pricing Descriptive Flexfields

Administer Pricing

Administer profiles, segments, strategies, and lists.

  1. Manage Pricing Profiles.

  2. Manage Pricing Segments.

  3. Manage Pricing Strategies. Create a pricing strategy but don't add any lists.

  4. Manage Price Lists.

  5. Manage Cost Lists.

  6. Manage Discount Lists.

  7. Manage Shipping Charge Lists.

  8. Manage Currency Conversion Lists.

  9. Manage Pricing Strategies. Add lists and other objects you created in steps 4 through 8 to the pricing strategy you created in step 3.

  10. Assign Pricing Strategies.

  11. Test your set up. Use an Oracle Cloud Application, such as Order Management Cloud, to verify pricing works correctly.

Administer algorithms, service mappings, and matrixes.

  1. Manage Pricing Matrix Types

  2. Map Pricing Operations to Pricing Algorithms

  3. Manage Pricing Algorithms

  4. Manage Service Mappings

  5. Manage Matrix Classes

Quick Start

Use this section only if must do a few tasks, depending on the Pricing functionality you need.

Modify How Order Management Displays Pricing Details

Description Topic

Modify how Pricing calculates the price details that Order Management displays for an order line, such as the unit price, list price, sale price, and discount.

Modify Prices on Order Lines

Specify the details that Order Management displays in the Amount dialog.

Modify Pricing Algorithm Variables

Specify the details that Order Management displays in the Total dialog.

Manage Pricing Totals

Specify how to display each price element in a price breakdown. For example, how to display the rounding adjustment in the price breakdown that Order Management displays in the Amount Sale Price dialog.

Manage Pricing Results Presentations

Modify Pricing Logic

Description Topic

Specify the logic that Pricing uses to calculate price. For example, remove the tax calculation.

Modify Pricing Algorithms

Specify the logic that Pricing uses to calculate totals. For example, calculate credit before you calculate tax.

Manage Pricing Totals

Add an attribute to the pricing calculation. For example, add freight details to an order line.

Manage Service Mappings

Apply conditional logic. For example, apply a different percent discount depending on whether the customer resides in a North, South, East, or West geographical region.

Managing Matrix Classes

Specify how Pricing rounds the values it calculates. For example, 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.

Manage Rounding Rules

Create a pricing rule that controls how Pricing calculates the price for each item. For example.

  • Set the base price to $500 USD for a cell phone, and allow the user to manually adjust the price.

  • Add a 5% increase to the invoice price to capture cost of goods sold.

  • Provide an 8% discount if the customer purchases a recurring service for 12 months, such as a monthly service call.

  • Price shipping for a Desktop Computer at $50 for Standard Delivery and $100 for Express Delivery.

  • Set up the base price for a computer monitor at $400 USD (United States Dollar), and use a 1.38 conversion rate to offer it for sale in CAD (Canadian Dollar) at $553.88.

Pricing Rules

Use tier pricing or a pricing matrix to adjust the price that a pricing rule calculates.

Adjust Prices

Specify a pricing charge definition that determines the total price of an item. For example, add a handling fee to an item that currently includes only a sale charge and an administration charge.

Manage Pricing Charge Definitions

Specify the basis that Pricing uses to calculate an adjustment according to a percent or amount. For example, sell to a distributor who ships items and handles freight and shipping, but exclude freight charges from your pricing basis.

Manage Pricing Bases

Modify Pricing for Strategies and Customers

Description Topic

Use a pricing profile to categorize customers who exhibit similar characteristics. For example, categorize a customer as high size and high revenue.

Manage Pricing Profiles

Use a pricing segment to categorize customers, understand their business motivations, and to offer a pricing solution. Track pricing performance to improve revenue and profit margins.

Manage Pricing Segments

Create a pricing strategy that helps you achieve a profitability goal.

Manage Pricing Strategies