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  9. Setting up target pricing

Setting up target pricing

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This document outlines the instructions for setting up the target pricing functionality, allowing you to get better prices or discounts for invoiced sales order lines based on a target turnover accumulation, which can be a sales amount, weight, volume or defined unit.

What this document contains:

Setting up the basic data

Set up the following:

Tables/Files To do
DIS control key table The DIS control keys that are valid for sales pricing are also valid for use on target pricing agreements. The DIS control keys that are to be used have to be activated.
Target pricing agreement types table Target pricing agreement types have to be created. These types will be connected to the target pricing agreements. On the target pricing agreement types you define the following:

Sequence: The sequence will determine in which order the target pricing agreement types are handled during the target pricing turnover accumulation. The target agreements defined with the target agreement types that hold the lowest sequence number will be handled first, and then the target turnover accumulation will proceed until the agreements defined with the type holding the highest sequence have been handled.

Target keys: The DIS control keys, which will be used to determine which sales order lines will be valid for target pricing, are defined on the target pricing agreement type. Up to five different keys will be possible to use. At least one must be defined. These keys will automatically be retrieved to the target pricing agreement when this target pricing agreement type is connected in the target pricing agreement.
Currency table Define the currency(s) in which the target pricing should apply.

Create target pricing agreement headers

Create as many target pricing agreement headers as required.

File To do
Work with target pricing agreements Create headers with:

  • Agreement start and end dates.
  • Agreement type. (The entered/selected agreement type will retrieve the DIS control keys that will be used for the agreement).
  • Agreement currency, i.e. the currency in which the target pricing discount will be calculated, and in which currency all amounts for the agreement are to be displayed/entered.
  • Select a Target UOM, i.e. the unit of measure in which the target levels are to be defined. Target UOM Turnover/Currency means that the target levels are to be defined as amounts per currency. The target UOM Quantity/Unit means that the target levels are to be defined as a quantity according to the defined unit. If the entered unit is equal to the DIS control units for weight/volume, then the target limits are to be defined for weight/volume.
  • Set the flag for Cash discount reduction to YES or NO. This flag will determine whether or not expected cash discount 1 is to be reduced from the amount that is accumulated to the target turnover.
  • Set the flag for Manual price to YES or NO. This flag will determine whether or not an order line that is manually priced is allowed to contribute to the target pricing turnover accumulation.
  • Set the flag for Free of charge to YES or NO. This flag will determine whether or not an order line that is set as free of charge is allowed to contribute to the target pricing turnover accumulation.
  • Set the flag for BtB transit to YES or NO. This flag will determine whether or not a BtB transit order line is allowed to contribute to the target pricing turnover accumulation.
  • Set the flag for BtB direct to YES or NO. This flag will determine whether or not a BtB direct order line is allowed to contribute to the target turnover accumulation.
  • Set the flag for CMI contract to YES or NO. This flag will determine whether or not an order line that is connected to a Contract Managed Inventory contract is allowed to contribute to the target pricing turnover accumulation.

The following field will automatically be updated on the agreement header when sales order lines, that match the keys and parameters on the target pricing agreement, have been invoiced:

  • Target turnover: This field displays the total line value from all target pricing agreement transactions. The line value can be an amount (for Target UOM = Turnover/Currency), or a quantity/weight/volume (for Target UOM = Quantity/unit) depending on the entered Target UOM unit.

Create target details for target pricing agreements

It is the target pricing agreement details that hold the values of the DIS control keys, i.e. the details control whether or not an invoice line is considered as valid for the target pricing agreement. During the target turnover accumulation calculation the corresponding values on the invoice line, according to defined DIS control keys, are compared to target pricing agreement details. If an agreement detail record is found, a target pricing transaction marked as target turnover qualifier will be created. If a lot of details will be valid for the target pricing agreement, it is better to use the Key values functionality. Here all key values are added separately and then the system will generate all detail key combinations automatically.

The table below describes how to create target agreement details.

File To do
Work with target pricing agreements From the initial panel click the Target details options.

Values for the selected DIS control keys will be entered for each Target agreement detail. The values to enter will vary depending on the DIS control keys that have been selected for the target agreement type, which is defined on the target pricing agreement header. For example:

  • Customer: Enter a valid customer for the target pricing agreement detail.
  • Item group: Enter a valid item group for the target pricing agreement detail.

Create target key values for target pricing agreements

In some situations it will be better to use the function for Target key values, instead of creating the Target agreement details manually. The main reason will be when a lot of Target agreement detail combinations have to be entered. Then it is much quicker to enter each key value separately, and let the system generate all key combinations.

The table below describes how to create target key values.

File To do
Work with target pricing agreements From the initial panel click the Target key values option. Select the keys for which you want to create key values. On the next panel use the Add option to create all valid key values for the selected key.

Once key values have been created for all keys, it will be possible to use the function for generating all key combinations in the target pricing agreement detail file.

When details have been generated, all future changes to the key value will have an immediate effect on the target agreement details. If a key value is added, all combinations for this key value will automatically be created. If a key value is deleted, all existing details holding this key value will automatically be removed.

Create target pricing agreement exceptions

It is possible to create target pricing agreement exceptions. The entered exceptions will prohibit invoiced sales order lines from qualifying for the target pricing agreement it is matched against. For example, all customers/items in the specified customer group/item group, except customer Y and item Y will be eligible for target pricing.

File To do
Work with target pricing agreements First create the target exception header(s). From the initial panel click the Target exceptions option.

  • Enter an exception ID and an exception description.
  • Enter a date interval between which dates the exception will be valid. This is optional. By leaving the date fields blank, the exception will always be considered as valid.
  • Enter up to five DIS control keys, which values will be used to control the exception.

Next step is to create target exception details. Select the Details option for the target exception header that you want to update. On next panel use the Add option to create target exception details. Key values for each selected key have to be entered. It is also possible to limit the details to be valid for a certain date interval.

Create target pricing agreement characteristics

It is possible to create target characteristics, which will verify whether or not the item on the order line is valid to contribute to the target turnover accumulation.

It is also possible to create a set of item characteristics, which will be used to qualify items on the order lines that are matched against the target pricing agreement. Thus, if the order line matches the target agreement keys, it will also be validated that the item on the order line matches the entered item characteristics (if any are entered). If it matches, the order line will qualify for target pricing. This option is only available if the Item Classification (CLA-ITEM) function has been activated in the Function control file.

File To do
Work with target pricing agreements From the initial panel click the Target characteristics option. On the next panel click the Add option. Create a target characteristic detail by entering:

  • Line number
  • Characteristic code
  • Operator
  • Value

For an item to be allowed for the validated target pricing agreement, the item has to hold a value for the entered characteristics code and then also match the entered comparison.

It is possible to enter characteristics with the same line number. Then all the comparisons with the same line number (i.e. an “AND”-relation) have to be OK for the validated item. Characteristics with different line number groups will be validated as an “OR”-relation.

Create a sales pricing method and connect it to a target pricing agreement

Only the N (Normal), C (Chain discounts) and P (Promotion) sales pricing methods are valid for target-based pricing. These sales pricing methods must be defined with the Limit type for target limits and connected to a target pricing agreement. This means that the target pricing agreement connection will directly affect the initial pricing of a line (the best value logic) and not necessarily be placed “on-top” of the initial pricing of the line.

File To do
Work with sales pricing method
  1. From the initial panel, click the Add option and complete the following fields:
    2. Type
    Must be of type N, C or P.
    Description
    Sequence

    Leave the other fields blank. The Validity dates and keys will be retrieved from the connected target pricing agreement. Click OK to update.

  2. Select the sales pricing method and click the Details option.
  3. Click the Add option to add a new detail.
  4. On the details panel, complete the following fields:
    5. Limit type
    Set this field to the panel value for Target limits.
    Target agmt
    Enter the target agreement, thereby connecting this sales pricing method.

    Click OK to update.

Activate target pricing agreements

Before turnover will be accumulated for a target pricing agreement, the agreement has to be activated. It is only possible to activate a target pricing agreement that has at least one target detail created.

File To do
Work with target pricing agreement From the initial panel click the Activate option. Activate the target pricing agreements and confirm the activation on the confirmation panel.

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