Advanced Pricing - An Implementation

Example

Barbara Mackenzie
Master Lock Company
February 13, 2002
Agenda
Company background
How we price (simplified)
Design for V11
Implementation

Master Lock
Mid-size manufacturer of keyed and combination
locks
Uncomplicated product
But many kinds of customers
mass retailers
hardware chains, coops, buying groups
independent hardware stores
industrial suppliers
institutions: schools, hospitals, prisons
locksmiths
Pricing must reflect differing costs of doing business

Oracle Apps
Use GL, AR, Order Entry and Inventory
Converted from 10.7 to 11.5
began in March 2001
went live December 31
Going-in plan for pricing
use the conversion process as-is
rework our pricing following conversion
this did not work

Revised pricing Goals
Achieve acceptable performance
conversion process
pricing execution in Order Entry and Order Import
Position for using new pricing functionality
Many decisions were based on what worked at the
time we needed it to

How we price
Discounted list prices for volume product
Quantity discounting for low-volume make-to-order
product
Net pricing for OEM, institutional product
Cost + pricing for sales to sister companies

Discounted list prices
Computed from a base price (suggested list price)
4 pricing levels, assigned by class of trade and ship-
to
Each level has a multiplier applied to the base price
Example:
Base price 9.46
Level1 multiplier .46 Customers price is 4.35
Level2 multiplier .475 4.49
Additional adjustments
Surcharge for quantities less than a case
Promotional discounts as appropriate
Trade show discount
New product promotions
Back-to-school promotions

How we did it in 10.7
Lack of cascading discounts was an obstacle
Prices were pre-computed and entered as end-item
prices
8 prices per item 4 Pricing Levels, Case and
Each prices for each level
Octupled the size of each price list
Base prices were on the Pricing Managers
spreadsheet, not in the database
Promotions were entered as discounts

First trial conversion
Price list conversion took more than 24 hours
(for reasons there is not enough time to explain, we
had a large number of price lists in 10.7)
Converted to a mess of pricing attributes in 11.4
did not work
was impossible to explain to users
without waiting to find out if the converted data could work,
we decided to scrap the converted data and re-implement
our requirements

Design
Use an item category to identify which items get retail
pricing
this was already in place
Load the price list with the base price
Use buckets to cascade the discounts and
surcharges
The Pricing Level discount in Bucket 1
The Each surcharge in Bucket 2
All promotions in Bucket 3

Spreadsheet(qp_modifiers.xls)

Implementation
All setup was done for both US and Canadian
currencies
Price lists are straightforward
Using Item-based prices
Create modifiers to do the discounted list price and
each surcharge
Build our own qualifier for ask-for promotions

Qualifier Attributes
Add 2 attributes to the seeded ones:
Pricing level
Promotion
Add to Qualifier Context flexfield definition
Define data sources in Attribute Mapping
Pricing level is stored in a Site Use attribute
custom function retrieves the value using context of
the current order
Ask-for promotion is stored in an Order attribute
no function is needed since the data is in the order
context (oe_order_pub.g_hdr)
<screen shots>

Discounted List Price Modifier
(Bucket 1)
List qualifier: price lists which use this pricing
One modifier line per discount level
Item category restricts the modifier to the right
products
Pricing level qualifier selects which modifier line
applies
Rounding quirks:
The .46 multiplier started as a 54% discount
To deal with rounding, it was changed to 53.99999%
<screen shots>

Each surcharge modifier (Bucket 2)
Not elegant, but it works
Same list qualifiers as the pricing level
Based on case size but UOM conversions are not
supported for modifier quantities
So, we populated an item category with the case
size (trigger on mtl_uom_conversions)
And defined a modifier line for each case size
No line qualifiers are needed
In the process of replacing this structure with
another qualifier attribute and custom function

Promotions (Bucket 3)
Promotions have to be automatic to be bucketed
Ask-for wasnt behaving predictably in early tests
So, use an order header attribute to request
promotions
Define a qualifier attribute on the order attribute
The promotion qualifier is a list qualifier
So, if the promotion name is entered on the order, the
promotion is automatically applied to each line

Conversion strategy
Copy list prices from our Pricing Managers
spreadsheet to a work table
Rename SO_PRICE_LIST_LINES prior to conversion
Create an empty SO_PRICE_LIST_LINES
Leave discounts mostly unchanged

Use the API to load the list prices from the working
table
(qp_price_list_pub.process_price_list)
Use the API to load modifiers for the pricing levels
and each surcharges
(qp_modifiers_pub.process_modifiers)
Converted discounts
changed to promotions
all lines set to bucket 3
disable, pending user review and update
Write an interface to qp_preq_grp.price_request for
custom programs
qp_attr_mapping_pub.build_contexts is very useful
This interface proved invaluable in regression testing

Summary
We adapted V10.7 function to meet our requirements
V10.7 data converted poorly into V11
It was better to re-implement than to force the
conversion to work
The variety of options in Advanced Pricing can be
confusing
Let your requirements lead you