Defining the Average Price Floor and Ceil Values of a Price Item or Price Item Bundle for a Division

Note: This topic is not applicable for the health insurance business.

Oracle Revenue Management and Billing enables you to define the average price floor and ceil limits of a price item or price item bundle for each division. Before you define the average price floor and ceil limits, you need to specify the floor and ceiling type for the price item or price item bundle. At present, the system supports the following floor and ceiling types for a price item or price item bundle:

  • Absolute Value Range

Once the floor and ceiling type of a price item or price item bundle is set to Absolute Value Range, you can define the average price floor and ceil limits of the price item or price item bundle for the required divisions. The system enables you to define different average price floor and ceil limits for different To Do roles. The system uses the average price floor and ceil limits while approving the average price of the price item or price item bundle in a deal. The deal creator or an approver at any level in the division or deal approval hierarchy can approve the average price of a price item or price item bundle when the average price is within the floor and ceil limits of the To Do role to which the deal creator or approver belongs. For example, if the average price of the P1 price item in a deal is $25 and the floor and ceil limits of the deal creator's To Do role is set to $10-$15, then the deal creator cannot approve the average price of the P1 price item in the deal.

If the average price floor and ceil limits is not defined for the deal creator's or approver's To Do role, the status of the price item or price item bundle in the deal is changed to Error. If the average price floor and ceil limits is defined for the deal creator's or approver's To Do role, but the average price of the price item or price item bundle is not within the floor and ceil limits, the status of the price item or price item bundle in the deal is changed to Pending for Approval. However, if the average price floor and ceil limits is defined for the deal creator's or approver's To Do role and the average price of the price item or price item bundle is within the floor and ceil limits, the status of the price item or price item bundle in the deal is changed to Approved.

Here, you can also define the average price floor and ceil limits for the price item manager's To Do role. Note that the price item manger can approve the average price of the price item or price item bundle in a deal when the average price of the price item or price item bundle is within the floor and ceil limits of the price item manager's To Do role.

  • Spread Amount

Once the average price floor and ceil type of a price item or price item bundle is set to Spread Amount, the system calculates the average price floor and ceil limits based on the average price and spread amount. The system calculates the average price of the price item or price item bundle. The system searches for the eligible price list in the price assignments assigned to the To Do roles. If a flat pricing is defined in the price assignment, then the system sets the average price to the flat rate. However, if a tiered pricing is defined in the price assignment, the system calculates the average price using the following formula:

Average Price = Price Item Revenue/Price Item Commitments

The system then considers the spread amount specified for the relationship manager's To Do role in the price item. Using the spread amount and average price, the system calculates the average price floor and ceil limit values. The deal creator or an approver at any level in the division or deal approval hierarchy can approve the average price of a price item or price item bundle when the average price is within the floor and ceil limits of the To Do role to which the deal creator or approver belongs. For example, if the spread amount set by you is 10 and the system calculated average price of the P1 price item in a deal is $25 then the system sets the floor and ceil limits of the deal creator's To Do role to $15-$35. In this case the deal creator can approve the average price of the P1 price item in the deal.

The system then checks whether the average price of the price item in the deal is within the derived average price floor and ceil limits. If so, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the derived average price floor and ceil limits, the status of the price item remains as Pending for Approval.

  • Spread Percentage

Once the average price floor and ceil type of a price item is set to the Spread Percentage, the system calculates the average price floor and ceil limits based on the average price and spread percentage. The system calculates the average price of the price item or price item bundle. The system searches for the eligible price list in the price assignments assigned to the To Do roles. If a flat pricing is defined in the price assignment, then the system sets the average price to the flat rate. However, if a tiered pricing is defined in the price assignment, the system calculates the average price using the following formula:

Average Price = Price Item Revenue/Price Item Commitments

The system then considers the spread parentage specified for the relationship manager's To Do role in the price item. Using the spread percentage and average price, the system calculates the average price floor and ceil values. The deal creator or an approver at any level in the division or approver system then checks whether the average price of the price item in the deal is within the derived average price floor and ceil limits of the To Do role to which the deal creator or approver belongs. For example, if the spread percentage set by you is 10 and the system calculated average price of the P1 price item in a deal is $50 then the system sets the floor and ceil limits of the deal creator's To Do role to $45-$55. In this case the deal creator can approve the average price of the P1 price item in the deal.

The system then checks whether the average price of the price item in the deal is within the derived average price floor and ceil limits. If so, the system changes the status of the price item to Approved. However, if the average price of the price item in the deal is not within the derived average price floor and ceil limits, the status of the price item remains as Pending for Approval.

Prerequisites

To define the average price floor and ceil limits of a price item or price item bundle for a division, you should have:

  • To Do roles and currencies defined in the application

  • Price items or price item bundles associated with the division to which the user (i.e. who is performing this action) belongs

Procedure

To define the average price floor and ceil limits of a price item or price item bundle for a division:

  1. Click the Divisions or Show All link in the Section pane when you are defining, editing, or copying a price item or price item bundle.
    The Divisions section appears.
  2. Click the Add (The Add Icon) icon in the Average Price Floor and Ceil Limits column corresponding to the division for which you want to define the average price floor and ceil limits of the price item or price item bundle.

    The following fields appear in a grid:

    Field Name Field Description Mandatory (Yes or No)
    To Do Role Used to indicate that users with the specified To Do role can approve the average price of the price item or price item bundle in a deal when it is within the specified floor and ceil limits.
    Note:

    The Search (The Search Icon) icon appears corresponding to the To Do Role field. On clicking the Search icon, the To Do Role Search window appears.

    On specifying the To Do role, the description of the To Do role appears corresponding to the To Do Role field.

    		 Yes (Conditional)
    Note: This field is required while defining the average price floor and ceil limits of the price item or price item bundle for the division.
    Floor Value Used to specify the floor (i.e. lower) limit for the To Do role. The users who belong to the To Do role cannot approve the average price of the price item or price item bundle when it is below the floor limit.
    Note: The floor value cannot be greater than the ceil value.
    		 Yes (Conditional)
    Note: This field is required while defining the average price floor and ceil limits of the price item or price item bundle for the division.
    Ceil Value Used to specify the ceil (i.e. upper) limit for the To Do role. The users who belong to the To Do role cannot approve the average price of the price item or price item bundle when it is above the ceil limit.
    Note: The ceil value cannot be lower than the floor value.
    		 Yes (Conditional)
    Note: This field is required while defining the average price floor and ceil limits of the price item or price item bundle for the division.
    Spread Amount Used to specify the spread amount specified while defining a price item or price item bundle or assigned to a To Do role.
    Note: This column appears when you select the Spread Amount option from the Average Price Floor and Ceil Type list for a price item or price item bundle.
    		 Yes (Conditional)
    Note: This field is required while defining the average price floor and ceil limits of the price item or price item bundle for the division.
    Spread Percentage Used to specify the spread percentage specified while defining a price item or price item bundle or assigned to a To Do role.
    Note: This column appears only when you select the Spread Percentage option from the Average Price Floor and Ceil Type list for a price item or price item bundle.
    		 Yes (Conditional)
    Note: This field is required while defining the average price floor and ceil limits of the price item or price item bundle for the division.
    Floor and Ceil Currency Used to indicate the currency in which you want to define the floor and ceil limits. The system does the currency conversion when the pricing currency is different from the floor and ceil currency.
    Note: The list includes only those currencies which are already defined in the system.
    		 Yes (Conditional)
    Note: This field is required while defining the average price floor and ceil limits of the price item or price item bundle for the division.
  3. Enter the required details in the Average Price Floor and Ceil Limits grid.
  4. If you want to define the average price floor and ceil limits for more than one To Do role, click the Add (The Add Icon) icon and then repeat step 3.
    Note: However, if you want to remove the average price floor and ceil limits of a To Do role from the division, click the Delete (The Delete Icon) icon corresponding to the To Do role.
  5. Click Save.
    The average price floor and ceil limits of the price item or price item bundle are defined for the division.

Related Topics

For more information on... See...
How to define a price item or price item bundle Defining a Price Item or Price Item Bundle
How to edit a price item or price item bundle Editing a Price Item or Price Item Bundle
How to copy a price item or price item bundle Copying a Price Item or Price Item Bundle
How to associate a price item or price item bundle with a division Associating a Price Item or Price Item Bundle with a Division