Configuration Steps: Landed Cost Estimation on Trade Transaction/Declaration

Landed Cost calculation on trade transaction and/or declaration setup involves the following major steps:

Define the setup indicated in the Configuration Steps: Duty and Tax Calculation on Trade Transaction/Declaration topic
Define the setup for additional value qualifiers required to calculate landed cost:
1. Define Value Qualifiers
2. Define Value Sets
3. Define Formula Expressions
4. Define Compliance Rules with Control Category of VALUE_SET
5. Define Compliance Rule Set and Rule Set Group for value set assignment
6. Define Compliance Rules with Control Category of VALUE QUALIFIER FORMULA
7. Define Compliance Rule Sets and Rule Set Groups for value formulas assignment

The application includes a pre-seeded setup covering value qualifiers, value sets, formula expressions, compliance rules, rule sets and rule set groups. This setup is also the default for the ad hoc landed cost simulator. To look at this setup navigate to Master Data > Power Data > Configurations > Logic Configuration ID = GTM LANDED COST SIMULATOR DEFAULT. You can drill down on this logic configuration to find all the details.

The setup described below explains in detail the steps you need to follow in case you want to support additional landed cost business models.

Defining the Setup Indicated in the "Configuration Steps: Duty and Tax Calculation on Trade Transaction/Declaration" Topic

To begin, define the setup indicated in the Configuration Steps: Duty and Tax Calculation on Trade Transaction/Declaration topic covered separately. This step is a pre-requisite to the setup steps and process described below.

Defining Value Qualifiers

Define the charges and other values required to calculate landed cost that have not been defined previously in the system. For example, the following value qualifiers are required:

INVOICE VALUE
FOB VALUE
INTL FREIGHT
INSURANCE
BROKERAGE FEE
DUTY
EXCISE TAX
OTHER (for Other Taxes)
HMF (for Harbor Maintenance Fee)
MPF (for Merchandise Processing Fee)
ESTIMATED LANDED COST

From this list all the value qualifiers with the exception of BROKERAGE FEE and ESTIMATED LANDED COST were defined in the previous setup step as they were required to calculate customs duty and other taxes. You need to define the missing attributes if they are not yet in the system.

Refer to the Value Qualifiers topic for more details.

Defining Value Sets

Define value sets containing the value qualifiers that are required to calculate landed cost and are included in previously defined value sets.

Following the above example, a value set containing the DOMESTIC INLAND FREIGHT, BROKERAGE FEE, and ESTIMATED LANDED COST value qualifiers is required to calculate landed cost. To add this value set:

Navigate to Master Data > Power Data > Configurations > Value Sets and create the following value set:

Value Set ID = ELC VALUE SET-2.
Name = ELC VALUE SET-2.
Description = SET OF VALUE QUALIFIERS REQUIRED TO CALCULATE THE LANDED COST.
In the Value Qualifiers section, select and save each one of the following value qualifiers:
- Value Qualifier ID = BROKERAGE FEE and Method of Calculation = SYSTEM CALCULATED.
- Value Qualifier ID = ESTIMATED LANDED COST and Method of Calculation = SYSTEM CALCULATED.

Defining Formula Expressions

Define the formula expressions that will be used by the application to calculate one or more value qualifiers needed in the process of calculating landed cost.

For example, the following formulas are needed for calculating the landed cost value. To add these formula expressions:

Navigate to Master Data > Power Data > Configurations > Formula Expressions and create the following formula expressions:

To create the formula expression to calculate brokerage fee:
- Enter an Expression ID =BROKERAGE_FEE.
  - Enter an Expression Name = ELC-BROKERAGE_FEE-1.
  - Enter an Expression Description = ELC-BROKERAGE_FEE-1.
  - Select Object Type = Transaction Line.
  - Select Usage Type = FORMULA.
- In the Expression Identifiers section, define the following identifiers:
  - Identifier = INVOICE_VALUE.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier =INVOICE VALUE.
    - Click Save.
  - Identifier = BROKERAGE_FEE.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = BROKERAGE FEE.
    - Click Save.
- In the Expression section:
  - Enter the Formula Expression of “BROKERAGE_FEE = 0.01*INVOICE_VALUE”.
  - Click Verify to check whether the formula expression is correct.
  - Click Finished.
To create the formula expression to calculate landed cost:
- Enter an Expression ID = ESTIMATED_LANDED_COST.
  - Enter an Expression Name = Estimated Landed Cost.
  - Enter an Expression Description = Estimated Landed Cost.
  - Select Object Type = Transaction Line.
  - Select Usage Type = EXPRESSION.
- In the Expression Identifiers section, define the following identifiers:
  - Identifier = FOB_VALUE.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = FOB VALUE.
    - Click Save.
  - Identifier = INSURANCE.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = INSURANCE.
    - Click Save.
  - Identifier = INTL_FREIGHT.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = INTL FREIGHT.
    - Click Save.
  - Identifier = BROKERAGE.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = BROKERAGE FEE.
    - Click Save.
  - Identifier = CUSTOMS_DUTY.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = DUTY.
    - Click Save.
  - Identifier = EXCISE_TAX.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = EXCISE TAX.
    - Click Save.
  - Identifier = OTHER.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = OTHER.
    - Click Save.
  - Identifier = HMF.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = HMF.
    - Click Save.
  - Identifier = MPF.
    - Select Object Type = Transaction Line.
    - Select Business Object Attribute = Transaction Line - Value.
    - Select Attribute Qualifier = MPF.
    - Click Save.
- In the Expression section:
  - Enter the Formula Expression of “FOB_VALUE+INTL_FREIGHT+INSURANCE+ BROKERAGE+CUSTOMS_DUTY+EXCISE_TAX+OTHER+HMF+MPF.
  - Click Verify to check whether the formula expression is correct.
  - Click Finished.

Defining Compliance Rules with Control Category of VALUE SET

Define compliance rules with a control category of VALUE SET. These rules will assign a group of value qualifiers to those trade transaction lines and/or declaration lines that match the parameters on the rules.

For example, the following VALUE SET rule will assign the value set of ELC VALUE SET-2 to a transaction line with a SHIP_FROM address in China, a SHIP_TO address in Great Britain, a transport mode of AIR and Incoterms of CIF.

Navigate to Master Data > Power Data > Compliance Rules > Compliance Rules.

In the Compliance Rule tab:
- Enter a Compliance Rule ID = ELC VALUE SET - RULE-1.
- Select a Control Category = VALUE_SET.
- Enter Description = ASSIGNMENT OF A VALUE SET REQUIRED TO ESTIMATE LANDED COST ON TRANSACTION LINES.
- The Active check box is selected by default.
- The Transaction Line check box is checked by default.
- In the Rule Parameters section:
  - Under Transaction, select Transport Mode = AIR and Incoterm ID = CIF.
  - Under Country, select a Country Qualifier ID = SHIP_FROM with a Country ID = CHN.
  - Under Country, select a Country Qualifier ID = SHIP_TO with a Country ID = GBR.
In the Controls tab:
- Select a Value Set = ELC VALUE SET-2.

Defining Compliance Rule Set and Rule Set Group for Value Set Assignment

Create a compliance rule set and a compliance rule set group, which are required to run the compliance rule screening process that will assign a set of value qualifiers to the transaction lines. An example is a Compliance Rule Set = ELC VALUE SET - RULE SET-1 that includes the ELC VALUE SET - RULE-1 created above and a Compliance Rule Set Group = ELC VALUES ASSIGNMENT RULE SET GROUP-1 that includes the Compliance Rule Set = ELC VALUE SET - RULE SET-1.

Navigate to Master Data > Power Data > Compliance Rules > Compliance Rule Sets.

Compliance Rule Set:
- Enter a Compliance Rule Set ID = ELC VALUE SET - RULE SET-1.
- Select a Regime ID = EAR.
- In the Compliance Rule section:
  - Select a Compliance Rule ID = ELC VALUE SET – RULE-1.

Navigate to Master Data > Power Data > Compliance Rules > Compliance Rule Set Groups.

Compliance Rule Set Group:
- Enter a Compliance Rule Set Group ID = ELC VALUES ASSIGNMENT RULE SET GROUP-1.
- Select a Compliance Algorithm ID = CUMULATIVE.
- In the Compliance Rule Set section:
  - Enter a Sequence Number = 1.
  - Select a Compliance Rule Set ID = ELC VALUE SET - RULE SET-1.
  - Select a Control Override Option = Not Allowed.
  - Select an Exception Override Type = Not Allowed.

Defining Compliance Rules with Control Category of VALUE QUALIFIER FORMULA

Define compliance rules with a control category of VALUE QUALIFIER FORMULA. These rules will assign formulas and perform the corresponding calculation for value qualifiers assigned to the trade transactions/declarations.

For example, formulas are required to calculate the following values when shipping an item from China to Great Britain with a transport mode of AIR and Incoterms of CIF: