Methodology Steps

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

Analyzing Pricing Needs
Developing a complete and correct understanding of the customer pricing requirements is the first step in implementing pricing. To develop a pricing solution with Oracle Advanced Pricing, you must break down the pricing requirements into
their component parts. Once you analyze customer requirements, underlying pricing requirement elements, relationships between the elements, and calculations, you can associate each of these elements and their relationships with the correct
business object. From this you can construct a pricing solution.

Define Pricing Requirements
For example, customers in the Northeast Region may order any two digital widgets and receive 10% off of either analog widget item ABC or DEF ordered at the same time. This is a promotional discount given for orders received between October 1 and December 31.

Analyze Pricing Requirements
Break down the requirement into the underlying component pricing requirements. This is accomplished through gathering enough information to precisely define the pricing action itself, and the conditions under which this action is to be taken.

Develop Pricing Solutions

The next step is to develop rule and action statements that define the pricing actions to be taken and under what conditions that pricing action to be taken. First define the action:
Pricing action: Give a 10% discount taken off normal selling price. This action statement is independent of customer, product, or dates.
Pricing rule: Discount action taken only for all customers in the Northeast Region.
Pricing rule: Discount action applied only to analog widgets with item numbers ABC or DEF.
Pricing rule: Discount action taken only when analog widgets are ordered at the same time as digital widgets.
Pricing rule: Discount action taken only for orders received between October 1 and December 31.

Developing Pricing Solutions
Once you have defined your pricing actions and rule statements, you can define a pricing solution within Oracle Advanced Pricing. You begin defining the implementation solution by designing an overall structure for pricing. The following sections contain information necessary for decisions you must make when creating this structure.

1. Implementation Decisions: Single versus Multiple Currency Price Lists Oracle Advanced Pricing supports both single currency price lists and multiple currency price lists. For single currency price lists, there is one currency defined per price list. For multi-currency price lists, a Multiple Currency Conversion list is attached to the price list defining multiple currencies and conversion factors and rules for converting prices.

2. Implementation Decision: Are the seeded context values on Oracle customer tables sufficient to contain customer hierarchy?

When installed with Oracle Order Management, the customer hierarchy in Oracle Advanced Pricing is seeded to roll up individual customers according to the following structure, which is based on RA_Customer: Customer name, Customer class, Site, Ship to, Bill to, Agreement name, Agreement type, GSA, Sales channel & Account type.
If the seeded qualifier context values from the Oracle customer tables are adequate, then attribute mapping for customer hierarchy are not necessary. If the seeded qualifier context values from the Oracle customer tables are not sufficient, there are two options for Release 11i. Both approaches requires you create attribute mapping to attribute mapping to inform pricing of the location of the customer hierarchy data elements you wish to reference in pricing qualifiers.

You must create a default sourcing rule for each qualifier attribute that you define since the pricing engine uses sourcing rules to locate the attribute values. You can use expand the your hierarchies by:
■ Use flex fields on customer table to hold flattened hierarchy.
■ Use tables outside Oracle to house the customer hierarchy.
When defining your customer hierarchy, the lowest level in your hierarchy has the lowest flexfield segment sequence number. For example, the pricing engine must choose between a price for an item negotiated with a specific customer and a price for the same item given to all customers in a customer class. You want the engine to select the customer-specific price. Set the customer qualifier as more specific than the customer class qualifier, and the engine will select your desired price. This flattens your pricing hierarchy across the Qualifier descriptive flexfield. Each hierarchy may be defined within a context or across contexts depending on how many levels you have in your pricing hierarchies.

3. Product Hierarchy : Product hierarchies are single- or multi-level groups to which a product may be associated with. Pricing rules are structured around these groupings which then affect the pricing actions a customer receives.
Each level in your product hierarchy where your business sets its pricing and discounting should be defined as a product attribute in the seeded product context ITEM. Do this step after you specify your requirements to take best advantage of the flexibility of Oracle Advanced Pricing for managing pricing in your enterprise The product hierarchy in Oracle Advanced Pricing is seeded with ITEM context based on the Oracle Applications Item Master, MTL_SYSTEM_ITEMS table. For this context, the flexibility of Oracle Advanced Pricing enables you to define your product hierarchy as follows:
Item number, Item category, Item All & Pricing attributes to specify a level more detailed than just item When defining your product pricing hierarchy, the lowest level in your hierarchy has the lowest flexfield segment sequence number. If the pricing engine must choose between an item price and an item category price, set the item segment as more specific than the product group segment. This flattens the pricing hierarchy in the item context of your Pricing Attribute descriptive flexfield. Each level in your hierarchy at which you wish to manage pricing is represented as a segment.

Item categories and category sets
You must design and define any item categories and category sets for pricing and discounting. If you use the seeded context values on the Oracle item master, you can use only the predefined item categories context flexfield structure for the Item Categories Key flexfield within Oracle Advanced Pricing. However, you can change the default category code combination for the seeded inventory category. You are limited to the standard seeded item category structure only. Oracle Advanced Pricing does not consider any new structures that you set up for your Item Categories flexfield.

Pricing Attributes
Attributes define exactly what is being priced or modified. Attributes can be factors that affect the price of the item, additional definition that does not require creating an item, or discounting at a level higher than item in the product hierarchy. Creating pricing attributes in different contexts enables attributes to be grouped according to their business. The item context is reserved for defining the product pricing hierarchy. Every level in the product hierarchy at which pricing and discounting is set should be defined as a segment in this context.

4. implementation decision: Must I implement pricing attributes, multiple price lists, or both? What pricing and qualifier attributes do I need, and how do I decide which is which?
Complex pricing scenarios can be best be solved with a combination of pricing attributes and multiple price lists. Not only can a combination of the two be easier to understand and maintain, but it can improve engine performance.
Pricing attributes further control what is being priced or modified on a price list or modifier list. Each level in your product hierarchy should be defined as a pricing attribute in the seeded context, item. You must create a default sourcing rule for
each pricing attribute that you define since the pricing engine uses sourcing rules to locate pricing attribute values.
For multiple price lists, qualifiers offer and/or capability as well as =, between, and not= operators.
For example:
■ If you charge different list prices for the same item, depending on conditions in effect at time of order, you can use pricing attributes.
■ If conditions are product oriented (example Item 123 Grade A is priced differently from same item Grade B) then product attributes are indicated
■ If conditions are not product oriented, but depend on customer’s membership in hierarchy or combination of customer and other factors like order type, time of day, then multiple price lists are indicated

Testing Your Pricing Solutions
The final step in the Oracle Advanced Pricing implementation methodology is to test your pricing solutions.
1. If you upgraded from Release 10.7 or 11 to Release 11i, and are running Oracle Advanced Pricing in Basic Mode with upgraded data, establish a separate test instance of your system and do your testing there.
2. Verify that you tested each scenario. Develop a documented script for each scenario that describes the setup and expected result, and then gives a step by step outline.
3. Begin with simple scenarios, and then work your way up to more complex ones.
4. Verify that you receive your expected numerical results.
5. Once your setups work in your test environment, you can begin replicating these setups into your production environment. Verify that the price list and modifier flags are set to inactive. Select beginning effectivity dates with caution
to prevent the pricing engine from prematurely using new setups for pricing production transactions.


Oracle Applications Fusion Cloud - Inventory

Oracle Cloud/Fusion Manufacturing Cloud training will help you develop the fundamental skills required to set up and use the Manufacturing module. This training covers all the tasks, setups, forms and reports used in Manufacturing and related modules