Variables

There are six key variables that are used throughout the process of determining the selling price for any item.

• Which item is being sold?
• Which warehouse is involved in the sale?
• Which customer is involved in the sale?
• Which customer location, if any, is involved in the sale?
• Which customer job, if any, is involved in the sale?
• What is the quantity being sold?

Customer Jobs

Customer jobs are evaluated separately from the rest of the pricing algorithm. If the item that is being sold on a document in which a job has been specified, the price will be selected from the job definition. Put another way, if your document is tied to a job, and the item you're selling appears on that job, the system will pick that price and not evaluate any other options.

Potential Price Sources

If the price is not going to be determined by an association with a customer job, the system must determine the price based on multiple criteria. Before a price can be determined, all potential price sources must be evaluated. Depending on your company's overall pricing strategy, many of these sources may or may not exist. The system will evaluate each of the following pricing schemes:

Promotions

Promotions are evaluated if they:

• are open ended, or have a beginning and ending date and today's date is within that range
• are specific to the customer and location on your document
  • if your document specifies a customer and location and the promotion specifies a customer and location, both must match
  • if your document only specifies a customer and the promotion specifies a customer and location, the promotion will be ignored
• are specific to the customer on your document
  • if your document does not specify a location, only promotions that match the customer and do not specify a location will be evaluated
• are global, meaning that they do not specify any customer
• include the item
• include the product group that the item belongs to

Price Contracts

Price contracts are evaluated if they:

• are open ended, or have a beginning and ending date and today's date is within that range
• are specific to the customer and location on your document
  • if your document specifies a customer and location and the contract specifies a customer and location, both must match
  • if your document only specifies a customer and the contract specifies a customer and location, the contract will be ignored
• are specific to the customer on your document
  • if your document does not specify a location, only contracts that match the customer and do not specify a location will be evaluated
• include the item
• include the product group that the item belongs to
• include the item family that the item belongs to

Quantity Brackets

The item's quantity brackets are evaluated, if they have been defined.

Product Group Quantity Brackets

If the item is part of a product group,  and that product group had defined quantity brackets, they will be evaluated.

Global Price Brackets

If global price brackets have been defined, they will be evaluated.

List Price

Finally, the item's list price will be evaluated.

• If the item is a stocked item, the list price is derived from the stocking record.
• If the item is not a stocked item, the list price is derived from the main item record.

Price Selection

Once all potential price sources have been evaluated, the system must then select a price. This process begins with first determining which method will be used. There is a setting in the customer's record called Pricing Strategy that tells the system whether it should select the price based on a predefined hierarchy or based on the best (lowest) price.

Hierarchical Pricing

When using this pricing strategy, the system will evaluate all of the price sources listed above and then pick the first price that matches the following hierarchy:

1. Promotions are selected first. If a single promotion makes it through the evaluation, it is chosen. If multiple promotions exist, the promotion price is selected based on this hierarchy, with each successive point being a tie breaker:
   1. The promotion with the highest Priority.
   2. The promotion that matches your customer and/or location specifications.
   3. The promotion that matches your item.
   4. The promotion that matches your item's product group.
2. Price contracts are selected next. If a single contract makes it through the evaluation, it is chosen. If multiple contracts exist, the contract price is selected based on this hierarchy, with each successive point being a tie breaker:
   1. The contract with the highest Priority.
   2. The contract that matches your customer and/or location specifications.
   3. The contract that matches your item.
   4. The contract that matches your item's product group.
   5. The contract that matches your item's item family.
3. Item quantity brackets are selected next. If your item has quantity brackets defined, and the quantity you are selling falls within the bracket range, the appropriate bracket's price is selected.
4. Product group quantity brackets are selected next. This works exactly like the steps in point 3, but at the product group level.
5. If the item has a minimum line charge, and the line charge is greater than the item's list price, the minimum line charge is selected.
6. If global price brackets exist, the one that matches the customer's Pricing Bracket is selected.
7. If no other pricing sources made it through the evaluation process, the system will select the item's list price.

Best Pricing

As the name implies, this process will produce the lowest price. Unlike the hierarchical strategy, this process evaluates all possible prices, regardless of the hierarchy, and selects the lowest one. For example, if the item is specified in multiple promotions, the lowest price promotion is selected, regardless of priority, customer matching, etc.

Broken Box Fees

Finally, after a price has been selected, the system may add an additional amount to the price. If the item has a Broken Box Fee defined, the system will inflate the price of the item if it is not being sold in whole units based on the item's Quantity Unit of Measure. The system will increase the price to approximately cover the entirety of the fee.

An example:

• The item is sold in a quantity UM of BOX which contains 100 SKU EA.
• The item has a broken box fee of $5.00.
• The item specifies price rounding to 4 places.
• To this point, the process has produced a price of $2.50 EA.
• This sale is for a quantity of 75, which is not a whole box.
• The system will make the following calculations:
  • total price = (75 * $2.50) + $5.00 = $192.50
  • final price = $192.50 / 75 = $2.5667
• The system will raise the price from $2.50 each to $2.5667 each, an increase of $0.0667. That increase multiplied by the quantity will roughly equal the $5.00 broken box fee.