Advanced Pricing with Purchasing

An Oracle White Paper August 2007

Goal
What are the basic steps involved in setting up and using Advanced Pricing with Oracle Purchasing ?

Solution
First a quick overview on Advanced Pricing Prices can be !anuall" entered or de#ault into purchase orders #ro! the ite! setup in Oracle $nventor"% pricing in#or!ation in a re#erenced purchase blanket agree!ent% or #ro! !ore co!ple& pricing rules set up in Oracle Advanced Pricing' Oracle Advanced Pricing is now integrated with Oracle Purchasing and Oracle iProcure!ent' Oracle Advanced Pricing is a #le&ible pricing engine capable o# addressing co!ple& pricing needs o# custo!ers' (sing Oracle Advanced Pricing% purchasing pro#essionals can setup co!ple& pricing structures in the #or! o# price lists% price #or!ulas and !odi#iers' Price lists contain the basic in#or!ation that associates price and currenc" with an ite!% service% group o# products or services% or sub)co!ponent' Pricing #or!ulas let "ou !odel !athe!atical relationships #or product pricing using certain order attributes' Price !odi#iers allow "ou to setup discounts or surcharges that can be applied on top o# base prices' *o price requisitions and purchase orders based on pricing rules setup in Oracle Advanced Pricing% the requisition or purchase order line need si!pl" re#erence a contract purchase agree!ent' What setup is required to enable advanced pricing #or Purchasing ? *o enable advanced pricing% the pro#ile option +,P -icensed #or Product+ !ust be set correctl"' For the purposes o# this .ote% this pro#ile option !ust be set to +Purchasing+ to enable Advanced Pricing to be used with Oracle Purchasing' *o set the pro#ile% navigate to /"ste! Ad!inistrator 0esponsibilit" Pro#iles )1 /"ste! and then quer" the pro#ile option +,P -icensed #or Product+ and set it at /ite or Application level to +Purchasing+'

Once done% the setup should rese!ble the #ollowing screenshot

1 ) 2asic 0equire!ents $n order to utili3e Advanced Pricing with Oracle Purchasing% there !ust be an $te! de#ined and this $te! !ust be linked to a /upplier through a 4ontract' Once this has been done% the $te! !ust be correctl" /ourced to this 4ontract using /ourcing 0ules% /ourcing Assign!ents and Approved /upplier -ists' *his setup is detailed below

i ) $te! /etup 6Purchasing 0esponsibilit" $te!s )1 7aster $te!s8 *he onl" consideration here is that the ite! !ust be purchasable' *he #ollowing screenshots show the setup #or the $te! 7ain and Purchasing tabs

Please note that no -ist Price has been assigned to this $te! and as such an" docu!ent re#erencing the ite! will not have a price de#aulted 6i# /ourcing or Advanced Pricing are not in e##ect8 ii ) 4ontract 4reation 6Purchasing 0esponsibilit" Purchase Orders )1 Purchase Orders8 *o utili3e the #unctionalit" provided b" Advanced Pricing% $te!s !ust be linked to a 4ontract with a /upplier through /ourcing 0ules' 4reate a contract as shown in the #ollowing screenshot and then approve it

iii ) /ourcing /etup 6Purchasing 0esponsibilit" /uppl" 2ase )1 /ourcing 0ule:Assign /ourcing 0ule8 *he $te! created !ust be associated with the sa!e /upplier and /ite speci#ied in the 4ontract through /ourcing 0ule and /ourcing 0ule assign!ent'

A /ourcing 0ule !ust #irst be created speci#"ing the /upplier and /upplier /ite as the 2u")Fro! source as shown below

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*he /ourcing 0ule can be assigned to the appropriate $te! through the Assign /ourcing 0ules #or! as shown below

Please note that the /ourcing 0ule !ust be assigned to the sa!e Assign!ent /et speci#ied in the pro#ile option +70P =e#ault /ourcing Assign!ent /et+ in order #or the /ourcing 0ule to be e##ective' iv ) Approved /upplier -ist /etup 6Purchasing 0esponsibilit" /uppl" 2ase )1 Approved /upplier -ist8 Once the $te! has been sourced to the appropriate /upplier and /upplier /ite% the ne&t step is to create an Approved /upplier -ist entr" to link the $te! ) /upplier:/ite to the created 4ontract'

First the entr" !ust be created in the Approved /upplier -ist #or! as #ollows

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4lick on the Attributes button and re#erence the 4ontract as shown in #ollowing screenshot

2 ) (sing Advanced Pricing Price -ists with Oracle Purchasing Advanced Pricing Price -ists allow di##erent prices to be stored #or $te!s and then these Price -ists can be applied to speci#ic /uppliers:0evisions:etc through the use o# ,uali#iers' Price -ists are also ver" #le&ible and allow !ass changes to $te! prices as well as bulk i!port #or $te! prices'

i ) Price -ist 4reation 6Purchasing 0esponsibilit" Advanced Pricing )1 Price -ists )1 Price -ist /etup8 *o speci#" an $te! price on a Price -ist% si!pl" create a new -ine under the e&isting Price -ist 6or create a new Price -ist as appropriate8 and include the $te! .u!ber and price on the Price -ist -ine as shown below

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Prices can also be assigned to 4ategories rather than speci#ic $te!s i# required' $n the e&a!ple shown above% $te! +,P *est $te!+ has been assigned a price o# 10' /ince no ,uali#iers have been attached in this case% it is to be e&pected that an" docu!ent 6be it Purchase Order or 0equisition8 that contains this $te! will have a price o# 10 de#aulted in the docu!ent line' ii ) *esting the Price -ist using a 0equisition 6Purchasing 0esponsibilit" 0equisitions )1 0equisitions8 *o test that the $te! price de#ined in the Price -ist is in e##ect% create a new 0equisition and enter the $te! 4ode'

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*he /upplier and /ite should de#ault auto!aticall" as per the de#ined /ourcing 0ule as shown below

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.ote that the 0equisition line price #ield is e!pt"' 4lick on the /ource =etails tab and select the 4ontract in the A/- as the /ource docu!ent #or this 0equisition as shown below

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Once the /ource 4ontract has been speci#ied% go back to -ines tab and "ou will see that the $te! price has de#aulted correctl" #ro! the Price -ist as shown below

iii ) *esting the Price -ist using a Purchase Order 6Purchasing 0esponsibilit" Purchase Orders )1 Purchase Orders8 @eri#" that the $te! Price also de#aults correctl" on Purchase Orders b" creating a new standard Purchase Order' 7ake sure to speci#" the correct /upplier and /upplier /ite on the docu!ent header'

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On the Purchase Order line% speci#" the $te! as shown in the #ollowing screenshot

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.ote that the $te! price #ield is e!pt"' 4lick on the 0e#erence =ocu!ents tab and speci#" the correct 4ontract as shown below

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Once this has been done% go back to the Purchase Order line and "ou will see that the $te! Price has de#aulted #ro! the Price -ist as shown below

5 ) (sing Advanced Pricing 7odi#iers with Oracle Purchasing 7odi#iers allow price adAust!ents to be speci#ied so that discounts can be applied to prices de#ined in Price -ists' 7odi#iers can be cu!ulative or not and ,uali#iers can be created to speci#" the eligibilit" o# di##erent 7odi#iers' i ) 7odi#ier 4reation 6Purchasing 0esponsibilit" Advanced Pricing )1 7odi#iers )1 7odi#ier /etup8 7odi#ier lines can be added to an alread" e&isting 7odi#ier or a new 7odi#ier can be created as required' $n the 7odi#ier -ine% the $te! can be speci#ied as well as the actual price !odi#ication be done' $n this e&a!ple% a discount o# 10B is applied to the $te! price de#ined in the Price -ist' For!ulas can also be used to appl" co!ple& price calculations i# required' Please note that the +Pricing Phase+ #ield !ust be set to +PO -ist -ine AdAust!ent+ #or 7odi#ier lines to be e##ective in Oracle Purchasing' .o other values #or this #ield will work'

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*he below screenshots show an e&a!ple o# a 7odi#ier

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ii ) *esting the 7odi#ier using a 0equisition 6Purchasing 0esponsibilit" 0equisitions )1 0equisitions8 *o test that the =iscount de#ined in the 7odi#ier is in e##ect% create a new 0equisition and enter the $te! 4ode' *he /upplier and /ite should de#ault auto!aticall" as per the de#ined /ourcing 0ule as shown below

.ote that the 0equisition line price #ield is e!pt"'

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4lick on the /ource =etails tab and select the 4ontract in the A/- as the /ource docu!ent #or this 0equisition as shown below

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Once the /ource 4ontract has been speci#ied% go back to -ines tab and "ou will see that the $te! price has de#aulted correctl" #ro! the Price -ist and the =iscount speci#ied in the 7odi#ier is now in e##ect as shown below

iii ) *esting the 7odi#ier using a Purchase Order 6Purchasing 0esponsibilit" Purchase Orders )1 Purchase Orders8 @eri#" that the =iscount correctl" a##ects the $te! price on Purchase Orders b" creating a new standard Purchase Order' 7ake sure to speci#" the correct /upplier and /upplier /ite on the docu!ent header'

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On the Purchase Order line% speci#" the $te! as shown in the #ollowing screenshot

.ote that the $te! price #ield is e!pt"'

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4lick on the 0e#erence =ocu!ents tab and speci#" the correct 4ontract as shown below

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Once this has been done% go back to the Purchase Order line and "ou will see that the $te! Price has de#aulted #ro! the Price -ist as shown below

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FA,
1 ) Can Blanket Purchase Agreement be used as source document instead of Contract Purchase Agreement for Advanced Pricing in Purchasing? .o' Oracle Purchasing onl" supports Advanced Pricing b" re#erencing 4ontract Purchase Agree!ents ' 60e# .ote 2;>;21'1 /ection 1' .ew and 4hanged Features8 2 ) Can different prices be setup for same item in Advanced Prices list? Ces% 7ultiple price lines can be !aintained #or sa!e ite! with di##erent e##ective dates in Advanced Prices list as long as these e##ective dates do not overlap with each other' 5 ) Is it possible to define a Price List entry with currency different from the Supplier currency ? *his is not possible and will result in the Price -ist entr" not being e##ective' *he currenc" in the Price -ist and the /upplier currenc" !ust be the sa!e' 9 D Is it possible to use Advanced Pricing Promotions with Purchasing ? .o% this is currentl" not possible' Pro!otions will have no e##ect on Purchasing docu!ents'

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References
E .ote 2;>;21'1 ) About Oracle Purchasing in Oracle /uppl" 4hain 7anage!ent Fa!il" Pack F .ote 2?5??1'1 ) Advanced Pricing $s .ot =e#aulting Price Fro! Price -ist .ote 2??<?>'1 ) 11';'10 =oes Advanced Pricing $n Purchasing 0equire Oracle Pricing *o 2e $nstalled?

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Advanced Pricing with Purchasing August 2007 Author Fadi *i!o% 7oha!ed G!ara% *4 4heng Oracle 4orporation World Headquarters ;00 Oracle Parkwa" 0edwood /hores% 4A ?90<; ('/'A' Worldwide $nquiries Phone I1'<;0';0<'7000 Fa& I1'<;0';0<'7200 www'oracle'co! Oracle 4orporation provides the so#tware that powers the $nternet' Oracle is a registered trade!ark o# Oracle 4orporation' @arious product and service na!es re#erenced herein !a" be trade!arks o# Oracle 4orporation' All other product and service na!es !entioned !a" be trade!arks o# their respective owners' 4op"right J 2007 Oracle 4orporation All rights reserved'

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