Basic Pricing

The Basic Pricing component of Oracle Order Management provides the capability to price orders according to price lists, pricing formulas, or agreements. You can also apply discounts, control the lowest level price that may be given in order to comply with General Services Administration Agency (GSA) regulations, and apply freight and logistics related charges to orders.

In OM the pricing engine prices the items after the order is entered or booked (depending on the pricing setup). Once the order is booked, it proceeds through the workflow process. If it is a shipping item and the quantities are available, the order is processed by SE. During shipping, the freight and special charges can be calculated and the price of the item is adjusted accordingly.

Customer Hierarchy
The customer hierarchy in Basic Pricing enables you to roll up individual customers according to the following structure:
■ The sold-to organization
■ The ship-to organization
■ The bill-to organization
■ Site
■ Customer Class
You can use elements of the customer hierarchy as defaults to control the operation of price lists and modifiers.

Pricing Engine
The pricing engine is the program module called by Order Management that prices the order as orders are entered or order data changed.

The pricing engine works through open APIs to provide the pricing results to the calling application. It consists of a search engine and a calculation engine. From the pricing request, the pricing engine evaluates the appropriate modifiers and price lists, resolve incompatibility issues, retrieves the list price, and calculates the unit selling price and adjustments. The search engine receives pricing information from entities like price lists, modifier, qualifiers, formulas, products and pricing attributes.

Inputs to the Pricing Engine
Pricing qualifiers: Determines who is eligible for a price or modifier list, for example, customer class, customer site, buying group, and sales territory.
Pricing Attribute: Determines what is being priced or modified on a price or modifier list, for example, product group, brand, location, distance, age, volume. Based on the inputs, the pricing engine selects the appropriate price list and adjusts the price by the chosen modifiers.
Modifiers: Determines how the eligible pricing request or pricing request line should be adjusted, for example, discounts, surcharges, coupon issue, item upgrade, other item discount, terms substitution, freight charge, and promotional goods. You can define price lists and modifiers from the most general level to the most specific level, for example, Price List B is for all products and all customers and Price List A is for Product 1 and Customer 1.