Advanced Pricing

Oracle Advanced Pricing is a rules-based application with an engine component to service the pricing requirements of Oracle applications to price customer transactions. Oracle Advanced Pricing enables you to set up pricing actions such as price lists, agreements, formulas, and modifiers that the pricing engine applies to transactions.

Advanced Pricing Concepts

Before you develop a pricing solution model for customer requirements, you must understand how Oracle Advanced Pricing works. Pricing concepts can help you learn about the functional capabilities of Oracle Advanced Pricing. There are four
major pricing concepts:

• Pricing rules

• Pricing actions

• Pricing controls

• Pricing extensibility

Methodology Steps

The recommended implementation methodology for Oracle Advanced Pricin consists of three steps:

 
 

Price Lists

Price lists are essential to ordering products because each item entered on an order must have a price. Each price list contains basic list information and one or more pricing lines that define item and/or item category prices. Basic information includes the price list name, effective dates, currency, pricing controls, and shipping defaults such as freight terms and freight carrier. For a price list, you can define price breaks, pricing attributes, qualifiers, and secondary price lists.
A Price list is useful for maintaining the prices and other pricing details of products and services.

• It serves as a repository of items with their related pricing details. You can call up a price list and add/edit/delete related items and item categories.
• You can also use the price list to define attributes for the products, which will then determine the pricing action.

• The pricing engine requires that all items, services, models, option class and options should be selected and displayed on price list.
  
• Fields such as payment terms, freight terms and freight carrier are available on the price list form. By defining the OM defaulting rules to use these fields from the price list window, you are able to default values directly into the SO based upon which price list has been selected for the order.

1. You can assign the same secondary price list to multiple price lists but you can not assign a secondary price list to a secondary price list.
2. If the item that you are ordering is not in the primary price list, the pricing engine uses the highest-precedence secondary price list (the secondary price list with the lowest value for the precedence field).
3. Line-level discounts and modifiers that apply to the primary price list do not apply to the secondary price list.
4. If an item appears on both the primary and a secondary price list with the same effective dates, the pricing engine uses the primary price list to price the item.
5. If an item appears on the primary price list but is not active (the effective end date has passed), the pricing engine uses the price on the secondary price list.

• Standard agreements which use standard price lists (PRL)
• Pricing agreements which use agreement price lists (AGR)

Other Tab

 

The Other tab displays the following information, and if applicable, details about the related Sales Agreement:

• List Source Document Number: The number of the sales agreement associated with the price list.
• List Source Code: Displays the code for the price list source (BSO will be the source code for sales agreement).
• Pricing Transaction Entity: Displays the name of the pricing transaction entity creating the price list. This field cannot be updated.
• Source System Code: Displays the code name for the source system creating the price list such as QP for pricing. This field cannot be updated.
Note: The Pricing Transaction Entity and Source System fields display for all price lists regardless of whether there is a related Sales Agreement.
• Shareable box: Indicates if the modifier is shared or not. If non-shareable (the default), then this modifier is specific to that agreement and cannot be used with other sales agreements.

If shared, the modifier is not exclusive to the sales agreement and can be selected for use with other agreements. Source Document Number: This is the Number of the sales agreement associated with the price list. Once you have completed entries in the price list header, you can add price list lines that define the actual items and list prices for the price list.
 

• Unit price: A fixed price.
• Percent Price: A price which is a percent of the price of another item.
• Formula: Multiple pricing entities and constant values related by arithmetic operators. For example, you define the price of an item to be a percentage price of another price list line.
• Price Break: If the price of an item varies with the quantity ordered, you can define bracket pricing or price breaks. The following table displays an example of a price break setup:

Pricing Attributes

To define pricing attributes:
1. Click Pricing Attributes in the List Lines tab to display the Pricing Attributes window.

Setup

The following image depicts the setup flow for Oracle Advanced Pricing. Some of the steps outlined are required and some are optional. If you have already completed a common-application setup (setting up multiple Oracle Applications products) some of the following steps may be unnecessary.

A Required Step With Defaults is required only if you want to change the seeded default values. Review those defaults and decide whether to change them to better suit your business needs. Do optional steps only if you plan to use the related feature or complete certain business functions.

Attribute Management

Attribute mapping enables you to extend your pricing capabilities by using data from a wide variety of non-standard sources to drive your pricing actions. The data sources for the qualifiers and pricing attributes can be from within or outside of Oracle Applications.

Using the attribute management feature, you can complete the following tasks:
• Create new contexts and attributes
• Update existing contexts and attribute properties
• Disable existing attributes.

Creating new contexts and attributes extends the ability of Oracle Advanced Pricing to provide user-defined data sources to drive pricing actions. The three methods to source data for an attribute are:
• User Entered: Attribute value is entered by user.
• Custom Sourced: Custom code is used to derive an attribute.
• Attribute Mapping: The pricing engine derives information from other Oracle Applications and non-Oracle data sources.

Qualifier and pricing attributes are used to define customer or product attributes:
• A product attribute defines product pricing characteristics such as a product item, item number, category, or brand.
• A customer attribute defines customer pricing characteristics such as customer name or customer number.

When the pricing engine gets a pricing request, attribute management retrieves all values for the qualifier and pricing attributes that are associated with the transaction. The pricing engine evaluates these values to determine which price lists and modifiers are eligible for the transaction.

For example, the following setup could define a discount for a specific day of the week:
Pricing Action               Pricing Rule           Data Source          Attribute Value
Discount Modifier            Qualifier           Day of the Week           Monday

Terminology for Attribute Management



Pricing Transaction Entity (PTE)
A PTE is an ordering structure that has associated request types and source systems. Different applications may have different request structures when they make requests to the pricing engine.

Source System
The source system is the application that captures the pricing setup data.

Request Type
The request type identifies the type of transaction that is being priced. Different applications make requests to the pricing engine. Request types of these applications may be different. Some applications may share their request types. For example, iStore and Order Capture share the same request type. On the other hand, Order Management and iStore have different request structures.

Secondary Price List & Qualifiers

1. In the Secondary Price List tab, select a Secondary Price List.
Advanced Pricing - Price Lists window
If the item you are ordering is not in the primary price list, the pricing engine looks for the price on any attached secondary price list. If the item is found, the pricing engine uses the highest precedence secondary price list (the secondary price list with the lowest value in the Precedence field).

2. Save your work.
Note: The pricing engine does not evaluate qualifiers on secondary price lists; however, some user setups may require them to be evaluated. In these cases, the System Administrator must change the profile QP: Qualify Secondary Price Lists to Yes.

To create qualifiers:



1. Select the Qualifiers tab.
Advanced Pricing - Price Lists window: Qualifiers tab
2. Enter a qualifier Grouping Number. Qualifier lines with the same grouping number generate an AND condition and qualifiers with different grouping numbers generate an OR condition.
3. Select the Qualifier Context.
4. Select the Qualifier Attribute. For example, if you selected Qualifier Context = Volume, then all the qualifier attributes for volume are listed (except Order Amount which cannot be used).

Price Breaks

You can use price breaks (bracket pricing) to define prices that vary with the quantity ordered. For example, if you buy up to 10 items the price is $20 per item, but if you buy more that 10 items, you get a lower price per unit.
Note: If you define a price for an Item Category, then all items within the category are eligible for the price break.

When setting up price breaks, you can define price breaks as either Point or Range breaks:

Point break
Defines prices based on the price bracket in which the total quantity falls.
For example, if you ordered 16 units of Item A11111, the total quantity falls into the Price 2 bracket where the unit price is $45. So the total price is calculated as follows:
Total price = 16 * $45 each = $720

Range break
Defines prices based on the ranges of the defined price breaks. For each range, the engine calculates a price and sums across all ranges to obtain the list price.
For example, if you ordered 16 units of Item A11111, the unit price from each price
(Price Breaks 1 and 2) is applied as follows:
• Price I: For the first 11 units * $50 each (unit price from Price 1) = $550
• Price 2: The remaining 5 units * $45 each (unit price from Price 2) = $225 Total price (the extended price) = $550 + $225 = $775. The unit price is now 775/16.

Note: Before setting up price breaks, the following must be selected in the Price Lists window:

• Line Type: Price Break Header
• Application Method: Unit Price or Block Price

Price Breaks with Block Pricing

Using block pricing, you can apply a lumpsum price rather than a per unit price to a price list line. Block pricing also provides flexibility when the unit of measure (UOM) of the header is different from the pricing attributes of each break range.

• In non-block pricing price breaks, the UOM of the break range lines is the same as that of the header.
• In block pricing, the break ranges can have different units of measure than the header. Lastly, block pricing also allows pricing setups that price by recurring values within blocks.

Modifiers

Modifiers enable you to set up price adjustments (for example, discounts and surcharges), benefits (for example, free goods and coupons), and freight and special charges that can be applied immediately to pricing requests or accrued for later disbursement. Using modifiers, you can:

    * Set up a modifier list with multiple modifier lines that define the terms of the price adjustment.
    * Create eligibility rules for modifiers by assigning list and line level qualifiers.
    * Define modifiers that are incompatible with other modifiers.
    * Create exclusive modifiers.
    * Create cascading modifiers.
    * Accrue monetary and nonmonetary benefits.
    * Create monetary or usage limits that a customer can receive for a promotion, deal, or other modifier.

Modifiers determine the adjustments made to the list price. These are dependant on various business factors such as type of adjustment to make, the level at which adjustments are made, how the modifiers are qualified, how they are applied, etc.

■Using  modifier lists, you can create groupings of price adjustments, and freight and special charges that you offer and report together to meet various business needs.At the list level, you define criteria that is common to all of the line level modifiers. You can create three modifier list types in oracle pricing
1. Discount List
2. Surcharge List
3. Fright and Special Charges list

■Use modifier lines to define the type of price adjustments, or freight and special charges that the pricing engine applies to pricing requests. You can associate certain line types with each list type. You can use the following line types:
 Discount: Creates a negative price adjustment.
 Surcharge: Creates a positive price adjustment.
 Freight charge: Applies a freight charge.
 Price Break: Applies a variable discount or surcharge price adjustment to a   pricing request based meeting the condition of a break type.Only point price breaks are allowed in basic pricing modifiers. for ex, the following pricing decisions are:
If item quantity = 1-50, then discount=5%

■The table below describes Modifier List Types and if Discounts, Surcharges, or Freight and Special charges are applicable to the List type. A value of
 Yes: indicates that the entity is available for the Modifier List Type.
 No: indicates that the entity is not available for the Modifier List Type.

Modifier Concepts

Using modifiers, you can set up price adjustments, benefits, freight and special charges, and promotional limits to control spending or usage. You can define simple discounts and surcharges as well as more advanced deals and promotions. The following list describes the main modifier concepts and related entities:

• Modifier lists contain one or more modifiers. Modifiers have list level and line level components. Each list level must have one or more lines associated with it.
• By defining qualifiers at the list and line levels, you define a customer's eligibility for the modifier.
• Control features that influence modifiers are products and product groups, pricing attributes, phases, incompatibility groups, levels, and buckets.
• The use of modifiers can result in volume breaks, additional buy/get products, and benefits.

Adjustment Method

The adjustment method (also known as the application method in the forms-based UI) determines how the modifier applies the price adjustment. You can select from the following adjustment methods:

• Percent: Creates a percentage price adjustment on each unit based on the percentage entered in the Value field. For example, to apply a 10 percent discount, select percent as the adjustment method.
• Amount: Creates a fixed price adjustment on each unit using the amount entered in the Value field.
• Lumpsum: Creates a price adjustment for this lump sum amount on the entire line.
• New price: Overrides the selling price of this item and makes the new price (defined in the Value field) the new selling price. Creates a price adjustment for the difference between the list price and the new price.

QP_PREQ_PUB.PRICE_REQUEST

QP_PREQ_PUB.PRICE_REQUEST API can be called to obtain the Price of an item

NB - is important to ensure that the pricing phase on the modifier line matches the pricing event used when calling the API.

For example if the pricing phase on the modifier is -- All Line Adjustments then to apply the modifier -- p_control_rec.pricing_event :='BATCH'; or alternatively change the pricing phase to -- List Line adjustments (note that setting the phase to the value will cause the pricing engine to update the price whenever the order line is changed and may have an impact on performance).
Pricing Attributes

1. Item priced is Inventory Item ID - 307627

Qualifier Attributes
1. Price List is Price List ID - 54824
2. Customer is Customer ID - 16071

A Modifier has been created where:
1. The Modifier is qualified at Header Level by the Customer ID - 16071
2. The Line on the modifier is qualified by pricing attribute - Inventory Item is 307627.

Price List
1. For Testing purposes I have not included the Inventory Item ID -- 307627 on the price list - 54824
2. The Price List does however include an ALL_ITEMS value which sets the price to 1.23

When Calling the PRICE_REQUEST API, I have passed the following values.

1. ALL_ITEMS pricing attribute which will be used to return a price from the price list if the item has not been included on the price list. This will only return a price if the Price List has a value for ALL_ITEMS.

line_attr_rec.LINE_INDEX    := 1;
line_attr_rec.PRICING_CONTEXT    :='ITEM';
line_attr_rec.PRICING_ATTRIBUTE   :='PRICING_ATTRIBUTE3';
line_attr_rec.PRICING_ATTR_VALUE_FROM   :='ALL';
line_attr_rec.VALIDATED_FLAG    :='N';
p_line_attr_tbl(1)    := line_attr_rec;

2. The Inventory Item to be priced

line_attr_rec.LINE_INDEX    := 1;
line_attr_rec.PRICING_CONTEXT    :='ITEM';
line_attr_rec.PRICING_ATTRIBUTE   :='PRICING_ATTRIBUTE1';
line_attr_rec.PRICING_ATTR_VALUE_FROM   :='307627';                  -- INVENTORY ITEM ID
line_attr_rec.VALIDATED_FLAG    :='N';
p_line_attr_tbl(2)    := line_attr_rec;

---- Qualifier Attribute Record

3. The Price List used to price the item

qual_rec.LINE_INDEX     := 1;
qual_rec.QUALIFIER_CONTEXT    :='MODLIST';
qual_rec.QUALIFIER_ATTRIBUTE    :='QUALIFIER_ATTRIBUTE4';
qual_rec.QUALIFIER_ATTR_VALUE_FROM   :='54824';                     -- PRICE LIST ID
qual_rec.COMPARISON_OPERATOR_CODE   := '=';
qual_rec.VALIDATED_FLAG    :='Y';
p_qual_tbl(1)     := qual_rec;

4. Customer Qualifier will be used to determine (in this test) which modifier is to be used.

qual_rec.LINE_INDEX     := 1;
qual_rec.QUALIFIER_CONTEXT    :='CUSTOMER';
qual_rec.QUALIFIER_ATTRIBUTE    :='QUALIFIER_ATTRIBUTE2';
qual_rec.QUALIFIER_ATTR_VALUE_FROM   := 16071 ;   -- CUSTOMER ID;
qual_rec.COMPARISON_OPERATOR_CODE   := '=';
qual_rec.VALIDATED_FLAG    :='Y';
p_qual_tbl(2)     := qual_rec;

The following Script will create a procedure called XX_TEST_PRICE_REQUEST ---  PRICE_REQUEST_API_EXAMPLE.sql

Do the following to run the script from a SQL*Plus session

SQL> Set Serveroutput on size 100000
SQL> Exec XX_TEST_PRICE_REQUEST

This should then return output similar to:

File : /usr/tmp/l5027518.dbg
Return Status text Routine: QP_PREQ_PUB.PRICE_REQUEST SUCCESS
Return Status  S
+---------Information Returned to Caller---------------------+
-------------Request Line Information-------------------
Line Index: 1
Unit_price: 1.23
Percent price:
Adjusted Unit Price: .615
Pricing status code: UPDATED
Pricing status text:
-----------Pricing Attributes Information-------------
Line detail Index 3
Context ITEM
Attribute PRICING_ATTRIBUTE1
Value 307627
Status Code
---------------------------------------------------
Line detail Index 2
Context ITEM
Attribute PRICING_ATTRIBUTE3
Value ALL
Status Code
---------------------------------------------------
-----------Qualifier Attributes Information-------------
Line Detail Index 3
Context CUSTOMER
Attribute QUALIFIER_ATTRIBUTE2
Value 16071
Status Code N
---------------------------------------------------
------------Price List/Discount Information------------
Line Index: 1
Line Detail Index: 2
Line Detail Type:NULL
List Header Id: 54824
List Line Id: 189859
List Line Type Code: PLL
Adjustment Amount : 1.23
Line Quantity :
Operand Calculation Code: UNIT_PRICE
Operand value: 1.23
Automatic Flag: Y
Override Flag:
status_code: N
status text: INSERTED IN L_LIST_CUR
-------------------------------------------
Line Index: 1
Line Detail Index: 3
Line Detail Type:NULL
List Header Id: 191260
List Line Id: 221749
List Line Type Code: DIS
Adjustment Amount : -.615
Line Quantity :
Operand Calculation Code: %
Operand value: 50
Automatic Flag: Y
Override Flag: N
status_code: N
status text: PRODUCT_QUALIFIER_ONLY
-------------------------------------------
--------------Related Lines Information for Price Breaks/Service
Items---------------

PL/SQL procedure successfully completed.

Pricing Security

In addition to the functional security, Oracle Advanced Pricing provides an additional level of security
called pricing security. Pricing security provides an additional security which can be used to restrict pricing activities such as updating and viewing pricing entities to users who are granted specific access privileges.

Oracle Pricing Administrator responsibility can be used for pricing security set up and maintenance.  This responsibility provides an HTML user interface and provides the authorization to access & update all pricing entities. The features provide by pricing security are:

1. Restricting pricing entities to operating units:
Pricing entities (Price list & Modifiers) are not part of the multi-org structure provided by oracle EBS but pricing security can be used to assign a pricing entity to a specific operating unit.

You can restrict usage to one operating unit or allow usage by all operating units by making it Global.
Global Usage: A pricing entity can be used across all operating units when making a pricing request. A pricing entity is originally owned by the creating organization. At creation checking the 'Global' flag allows usage across operating units; unchecking it restricts usage to the owner organization. Ownership/Usage may be updated on this page.

2. Restricting pricing entities to grantee (Global, Operating Unit, Responsibility, or User level) :
You can grant view-only or maintain access privileges to functional users at the Global, Operating Unit, Responsibility, or User level.

Pricing Security Terms (as in Oracle user guide)

The following terms are used in Oracle pricing security:

1.1 Pricing Entity: A pricing entity can be a price list, modifier list, or pricing agreement.

1.2 Entity Set: A set of pricing entities that can be used as an Entity Type to which you
can grant privileges with Maintain or View-Only access levels.

1.3 Entity Type: A term used to describe one of the following pricing entities: Standard Price list, Modifier List, Pricing Agreement, and Entity Set.

1.4 Entity Usage: Grants the usage of the entity to one or all operating units so that it can be used during pricing engine calls.

1.5 Global Usage: When Global Usage is set to Yes for a pricing entity, it can be used across all operating units for processing orders. If No is selected, the usage of the entity is restricted to the operating unit that created or owns it.
When security is turned on, a Global box indicating Global Status is dynamically added to the header region of all price lists and modifiers. A user with Maintain access privileges can update the Global box.

2.1 Grantee: The specific user or users for a Grantee Type who are given permission to view or maintain a pricing entity. Used in combination with a Grantee Type.

2.2  Grantee Type: The level to which privileges are granted:

• Global: Includes all users with access to pricing menus.
• Operating Unit: Includes users who have the named operating unit as the default operating unit (as specified in MO: Default Operating Unit profile).
• Responsibility: Includes users within the named responsibility.
• User: Specifies a named user.

2.3  Access Level: Provides Maintain or View-Only access to a pricing entity:

• View-Only: Enables the user to view but not update the pricing entity.
• Maintain: Enables the user to view and update pricing entities. Not all of the entities support delete capabilities.

Advanced Pricing Responsibilities:
Advanced Pricing comes with three seeded responsibilities. These responsibilities have different purposes as explained below.

Oracle Pricing Administrator
The user who is assigned the Oracle Pricing Administrator responsibility has complete access to all pricing entities without restriction and is responsible for the global setup and administration of pricing security.
The administrator is responsible for Privileges, Entity Sets & Entity Usage setups.

Oracle Pricing Manager
The user who is assigned the Oracle Pricing Manager responsibility can access all features for setting up, using, and maintaining pricing features and functions (except pricing security) such as price lists, pricing formulas, modifiers, attribute management, and item and category management.

Oracle Pricing User
This responsibility provides access to the HTML user interface where you can create price lists and modifiers (Deal, Discount, Promotion, Surcharge), access the price list maintenance feature, and attach qualifiers and qualifier groups to modifiers and price lists.