## Understanding Advanced Pricing

This chapter discusses:

- JD Edwards EnterpriseOne Advanced Pricing.

- JD Edwards EnterpriseOne Advanced Pricing features.

- JD Edwards EnterpriseOne Advanced Pricing and Procurement.

- JD Edwards EnterpriseOne Advanced Pricing and Blend Management.

### JD Edwards EnterpriseOne Advanced Pricing

The ability to refine or replace pricing strategies swiftly and effectively in response to changing market conditions is an advantage in the marketplace. Companies that react slowly give the competition an unearned advantage. To react quickly to changing pricing conditions, a company needs a flexible price adjustments system.

The benefits of implementing a flexible price adjustments system include:

- Improving profitability and competitiveness through more accurate pricing by market sectors and product characteristics.

- Enabling sales and marketing organizations the freedom to develop pricing strategies to target different market sectors.

- Providing the ability to react promptly and effectively to a competitor's pricing strategies and to marketing conditions.

JD Edwards EnterpriseOne systems enable you to adjust base pricing using one of two price adjustment solutions:

- Base pricing, or the standard price adjustment application, which is available with Sales Order Management.

  You should use standard price adjustments if the company pricing procedures do not require the features that are offered by Advanced Pricing.

- Advanced Pricing, which is integrated with the base price architecture.

Advanced Pricing Terminology

This section lists terms that are commonly used in Advanced Pricing.

Advanced Pricing Hierarchy, Hierarchy, Preference Hierarchy, Pricing Hierarchy | A pricing structure to retrieve base prices and to calculate price adjustments and updates.
Adjustment, Adjustment Definition, Definition, Price Adjustment, Price Adjustment Definition, Purchase Order Adjustment, Sales Order Adjustment | A record that describes a special pricing situation, such as a pricing plan or promotion.
Adjustment Schedule, Price Schedule, Schedule | An adjustment schedule contains one or more adjustment definitions and adjustment details.
Adjustment Detail, Advanced Pricing Adjustment Detail, Price Adjustment Detail | Adjustment details provide the parameters for calculating price adjustments and add pricing flexibility.
Complex Price Groups, Customer Groups, Item Groups, Override Search Groups, Order Detail Groups, Price Groups | Category codes that you use as: Price groups for customers and items with similar characteristics. Order detail groups to create adjustment definitions for order lines.

### JD Edwards EnterpriseOne Advanced Pricing Features

Because pricing is probably one of the most complex aspects of the business, it might take you a considerable amount of time to plan, set up, and maintain pricing information. Using JD Edwards EnterpriseOne Advanced Pricing enables you to streamline pricing setup and maintenance. The JD Edwards EnterpriseOne Advanced Pricing setup is straightforward and requires minimal maintenance.

JD Edwards EnterpriseOne Advanced Pricing provides flexibility when defining pricing. You can easily adjust prices for each promotion or deal and then combine the adjustments into a pricing structure or schedule. Within each schedule, you can define unlimited price adjustments. You can also combine regular discounts and promotions within the same schedule, which enables you to apply multiple adjustments to each sales order line.

Customer and Item Groups

By grouping customers and items, you can accommodate vastly different market sectors and product lines. Using customer and item groups frees you from the tedious task of setting up price adjustment information for each item and customer.

JD Edwards EnterpriseOne Advanced Pricing provides additional flexibility for working with pricing groups. You can create adjustments for single items, single customers, groups of items, or groups of customers. Customers can be identified by sold to, ship to, or parent addresses.

Pricing Workbench

You can use the Pricing Workbench program (P45501) to view a variety of pricing-related information on a single form. You can locate all pricing scenarios and situations to simplify pricing structure maintenance and reduce the number of inquiries for the customer.

After you create the filters for querying records, you can globally update several price adjustment records on the Price Adjustment Global Revisions form, as well as change or copy existing records to create new ones.

Customer Price Lists

You can create and maintain customer price lists based on advanced pricing information and then forward them to customers.

Adjustment Accruals

You can have the system accrue the amount of an adjustment instead of applying the adjustment to the order line. You might want to do this for:

- Advertising allowances and cooperative allowances.

- Commissions.

- Royalties based on product or customer.

Types of Price Adjustments

Adjustments provide you with great flexibility in defining pricing schedules. You can adjust the price:

- By a specified percentage of the base price.

- By a percentage of the current net price.

- By a percentage dollar amount of cost.

- By a specific amount.

- By selecting a price adjustment as the new base price.

- By a sliding rate for multiple discounts to a sales order line.

  The sliding rate can be based on quantity, weight, or amount.

- Based on a formula.

  For example, you can create formulas that reference a field in the sales order detail or pull data from variable tables if you need to create pricing for items with prices that fluctuate frequently.

- Based on a price override.

  You can override a price by creating an adjustment that replaces the base price with the price that you define in the override adjustment. You can also specify rounding rules for calculating a unit price and attach the rules to adjustments.

- Based on one of your company's custom programs.

- Based on a minimum or maximum price adjustment rule.

You can specify price list groups for adjustments. You group price adjustments into categories representing discounts, promotions, taxes, or freight.

Limited Time Offers

For each adjustment, you can define an effective from date and an effective through date. For example, for pricing a promotion during the month of May, you can define an effective date range of May 1 through May 31.

Multi-currency Pricing

You can set up and maintain pricing by currency. If you sell in multiple currencies, the system can retrieve the currency from the Item Base Price File table (F4106) and retrieve the advanced pricing adjustments based on the currency of the sales order. If no pricing adjustments are found for the currency of the order, the system will use the base currency.

Multiple Units of Measure

You can use the Unit of Measure Conversions - Item program (P41002) in the JD Edwards EnterpriseOne Inventory Management system to specify multiple units of measure to locate base prices and adjustments. For example, you can specify that pallets are the first unit of measure for the system to use when searching. If the system finds nothing, you can specify cases as the second unit of measure, and so on.

You can also use threshold rules to set up adjustments based on the amount a customer buys. Using multiple units of measure, you can apply an adjustment factor value based on a different unit of measure than the defined level break unit of measure.

Volume Incentives

Volume incentives enable you to offer a price discount at order entry for a product or product group. The discount is based on the volume a customer orders over time on multiple orders. You can base the discount on amounts, percentages, or replacement prices. You can set up a volume incentive adjustment based on either single rate pricing or sliding rate pricing.

Volume Upselling

If you want to recommend that customers purchase a larger quantity to receive a lower price, you can specify adjustments and a percentage tolerance that determines when the system issues a notification that an order line qualifies for an upsell notification.

Free Goods

Free goods are typically promotional items that help promote, display, or accompany the product that is ordered. For example, you can designate certain products, such as items for a display case, posters, or additional promotional items, as free goods to highlight a sale.

When you define an adjustment, you define how the system applies the free goods. You can associate any adjustment to free goods. You can also define multiple free goods in a free goods catalog. The free goods catalog enables the customer to choose the free good that is awarded to them for a qualifying order.

Level Breaks

You can reward customers who buy in volume by providing price discounts based on order quantity, weight, or total price. When you define adjustment types, you specify the level-break type you want to use.

Buying Structures

You use a buying structure to manage and customize a customer's pricing based on their organizational structure. Buying structures enable the system to customize the adjustments and rebates that apply to a customer.

Accruals

Automatic Accounting Instructions (AAIs) enable you to set up liability accounts for royalties, commissions, and rebates. Accruals do not affect the price of the order, but appropriate expense and liability entries are created when using the Sales Update program (R42800).

Rebates

Businesses use rebates to encourage customers to purchase a greater volume of goods or services. You can calculate rebates based on the total amount, total quantity, or total weight of multiple orders. You can define rebate thresholds to establish rules for generating credit orders. You can create supplier proof-of-sale rebates that are eligible based on product sales to targeted customers or customer groups.

Flexible Invoice Print Detail

The adjustment type definition determines whether adjustment information prints on invoices.

Reprice Adjustments

You can accumulate quantities, weights, or amounts on an order and then apply a discount based on the total quantity, weight, or amount.

Online Price Negotiation

While taking a customer's order, you can negotiate prices and review the results. You can change the price calculation until both you and the customer are satisfied. The system automatically updates the profit margin as you make changes, which gives you the ability to verify that you stay within established guidelines.

Price Approvals

When you need to create or change prices, you can set up a process to automatically send out the new or changed prices for approval. Price approvals are routed through JD Edwards EnterpriseOne Workflow Management.

Ship and Debit Agreement Processing

Suppliers who have agreements with their distributors based on price fluctuations in the electronics industry can use the Ship and Debit Processing feature to define, adjust, and process agreements and manage the resulting claims. JD Edwards EnterpriseOne Advanced Pricing supports ship and debit functionality.

Price Matrix

Many companies use very intricate pricing and can have numerous price adjustment records for items and their customers. Using the Price Matrix program (P4590), you can add and edit a multitude of adjustment detail records to provide the parameters for calculating prices. This program enables you to access a view that suits your needs and to quickly enter and maintain pricing information.

### JD Edwards EnterpriseOne Advanced Pricing and Procurement

JD Edwards EnterpriseOne Advanced Pricing is designed around key concepts that support a wide variety of pricing strategies—ranging from simple product promotions to sophisticated customer deals. Integrating the JD Edwards EnterpriseOne Advanced Pricing and Procurement system features provides more details to the customer about the price breaks that suppliers extend to you, the customer. You can maintain rates and adjustment details.

The JD Edwards EnterpriseOne Advanced Pricing and Procurement features that integrate include:

- Multiple adjustments per line item.

- Detailed adjustment feature definition.

- Hierarchical adjustment search sequences.

- Order-specific pricing characteristics.

- Free goods processing.

- Online review of adjustment history.

- Procurement and receipt adjustments.

- Reprice a batch of purchase orders or receipts.

- Price matrix to maintain adjustment detail records.

Note. Adjustments do not apply to receipts lines for non-stock items.

The sections that require specific actions for purchase order adjustments are titled Using JD Edwards EnterpriseOne Advanced Pricing and Procurement.

### JD Edwards EnterpriseOne Advanced Pricing and Blend Management

A contract with a grower may span several years or growing periods and you will want to maintain the contract and the price you pay for grapes over a lengthy period of time. Several features of the JD Edwards EnterpriseOne Advanced Pricing system integrate with the JD Edwards Blend Management system:

- Price matrix to maintain adjustment detail records.

- Minimum or maximum price adjustment to maintain minimum or maximum pricing on receipts for grapes.

- Repricing receipts using a price adjustment.

- Pricing based on quality tests.

- Manual override of the price on a contract and apply adjustments.

- Repricing of a batch of purchase orders or receipts.

The sections that provide detailed information about features used in Blend Management are specified with the heading Using JD Edwards EnterpriseOne Advanced Pricing and Blend Management.