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Calculating Freight Charges as a Percentage of Order
Amount in Oracle Advanced Pricing
EXECUTIVE SUMMARY
Businesses that charge their customers for freight and other special charges often
need to calculate those charges in a variety of ways. Oracle Advanced Pricing
provides the functionality and the flexibility to tailor the calculation of freight and
special charges to specific business needs.
INTRODUCTION
This paper steps the reader through setting up freight charges as both a lump sum
based upon a range of total order amounts, and also as a percentage of the order
amount. This paper is written for the 11i.8 version of Advanced Pricing. The
functionality is the same in earlier versions, the navigation and setup forms are
different.
BUSINESS SCENARIO
An enterprise charges its customer for freight based on a tier, a flat rate lump sum
for certain amount tiers, followed by a percentage of order amount above a certain
tier.
Example:
Order Amount (in dollars, currency unit is immaterial) Freight Charge
1– 100 15
101 – 200 20
201 – 300 25
over 300 6 % of order amount
Functional Issue
Oracle Advanced Pricing only supports Lumpsum order level freight charges.
Solution Background
Solution
Define a Pricing Attribute for Order Amount, create a pricing formula with the
formula 1 * 2 where 1 is the pricing attribute Order Amount and 2 is the numeric
constant (0.06 in this example). Since there is a seeded Qualifier Attribute for
Attribute Management
Using Attribute Management, locate the attribute mapping for the qualifier context
Volume, attribute Order Amount.
• Responsibility: Pricing Manager
• Navigation: Setup→Attribute Mapping→Context and Attributes
• Find Qualifier Context: Volume, Attribute Order Amount
Define Modifier
A WORD OF CAUTION
In the 11.5.8 release (Family Pack H) and earlier, this method may produce
undesired results if an order line is split, or order lines do not ship together. Until
this issue is resolved by development, this method works best with an order type
which has Header Level Invoicing.
CONCLUSION
In order to meet changing and challenging competitive environments, businesses
today must be able to quickly and flexibly define pricing rules to support their
business goals. Using the inherent capabilities of Advanced Pricing, a business can
adapt their pricing capabilities to their business needs, often leveraging the seeded
data provided with the applications, without customization.
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