Background: Price-Contract Maintenance
Use the Price-Contract Maintenance (PCM) program to:
Enter and change customer contract records.
See Road Map for work flow.
This topic has these subtopics:
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Price Hierarchy
Your company set up a price hierarchy to reflect how you price items. The hierarchy is a set of rules that the system uses to determine who pays how much for which items. Hierarchy levels determine the order in which the pricing routine checks for a price. See Set Up a Price, Discount, and Surcharge Hierarchy.
You use the Price-Contract Maintenance program to enter price records for each level of the hierarchy. You may need only a few records for the specific pricing type (for example, contracts, customer/item, and specials) at the top of the hierarchy (lowest numbered levels). You need to be sure to have a record for each of the more the general pricing types lower in the hierarchy so that the pricing routine will find a price for every item and customer.
Pricing Types
For some pricing types, you may need to set up codes for classes and types. Then you need to select those codes in specific customer or item records.
Pricing type |
Set up codes in these programs |
Assign with these programs |
Customer Price Class |
Customer Price Classes Maintenance (TCPC) |
Customer Maintenance (CM) |
Customer Type |
Customer Types Maintenance (TYM) |
Customer Maintenance (CM) |
Item Price Class |
Item Price Classes Maintenance (TIPC) |
Branch Item Maintenance (IMB) |
Product Class |
Product Class Codes Maintenance (TPC) |
Enterprise Item Maintenance (IM) |
Product Subclass
|
Product Subclass Codes Maintenance (TSP) |
Enterprise Item Maintenance (IM) |
Pricing Structure
A price record contains information that the pricing routine uses to calculate the price of an item for a specific customer. Each price record can have as many as nine pricing structures. The pricing structures can be the same or vary slightly.
This example is designed to show all three price types: List, Cost, and Margin. You probably would not mix these types in a single pricing structure. The example also adjusts by percent, by a set amount, and both. Again this example is probably not typical of the pricing structures you will create.
Structure |
Type |
List price |
Adj % |
Adj amount |
Description |
Calculation |
1 |
L |
13.500 |
5.00 |
|
List price + 5% |
13.500 + (13.50 x .05) = 14.175 |
2 |
L |
13.500 |
|
2.00 |
List price + set amount |
13.500 + 2.00 = 15.500 |
3 |
L |
13.500 |
2.50 |
5.00 |
List price + 2.5% + 5.00 |
Your setting for the Apply adjustment amount or percent first option in the System Options (XM) program (Pricing Options) determines which is applied first: If you selected A: 18.500 + (18.500 x .025) = 18.9625 If you selected P: (13.500
x .025) = 13.8375 |
4 |
C |
13.234 |
10.00 |
|
Cost + 10% |
13.234 + (13.234 x .10) = 14.5574 |
5 |
C |
13.234 |
|
1.00 |
Cost + set amount |
13.234 + 1.00 = 14.234 |
6 |
M |
13.234 |
10.00 |
|
Margin + 10% |
13.234 / (1 - .10) = 14.7044 |
Which Pricing Structure Applies?
The Price code field in the customer's record in the Customer Maintenance (CM) program determines which pricing level applies to a customer's order. For example, if the customer has a Price code of 1, the pricing routine looks at the first pricing level in the price record. In this example, if a customer has a Price code of 4, the pricing routine calculates the price using the cost plus 10% method.
If you ship an order to a ship-to address, the pricing routine checks the Price code field in the Customer Ship-to Maintenance (CSM) program.
If you have customers whose Price code field is blank, you may want to select the Use list price 1 as default? option in the System Options Maintenance (XM) program (Pricing Options). Then the pricing routine will find a price for the customer and item.
If the prices for price codes 1 through 5 are the same and you selected Default all list prices to list price 1? option in the System Options Maintenance program, you can enter prices for level 1 and leave other levels set to .00000. When the pricing routine finds a blank pricing level, it uses level 1. If you did not select this option, the pricing routine continues to the next level of the hierarchy when no price exists.
Volume Discounts
You can set up six volume discounts for each pricing record. Each volume discount can be based on either the quantity ordered (for example, minimum quantities of 10, 100, and 1000) or an extended amount: Quantity x Price.
Volume discounts are different from price breaks. The pricing routine first calculates a price, using the pricing structure. Then the pricing routine determines whether the customer's order or quotation meets the requirements for a volume discount.
The discount can be a percent, set amount, or both. The discount is deducted from the calculated price.
Discount % Based on Quantity
This example illustrates a volume discount based on quantity with a discount percent. The example builds on the previous example and assumes that the customer's Price class is 6, so the unit price is 14.7044. If the customer orders a quantity of 200, the discount will be 11% and the unit price will be 13.08691.
Quantity |
Disc % |
Price per unit |
100 |
10.00 |
14.7044 - (14.7044 x .10) = 13.23396 |
200 |
11.00 |
14.7044 - (14.7044 x .11) = 13.08691 |
300 |
12.00 |
14.7044 - (14.7044 x .12) = 12.93912 |
Discount Amount Based on Quantity
This example illustrates volume discount based on quantity with a set discount amount. The example assumes that the customer's Price class is 6, so the unit price is 14.7044. If the customer orders a quantity of 200, the discount will be 2.00 and the unit price will be 12.7044.
Quantity |
Disc amount |
Price per unit |
100 |
1.00 |
14.7044 - 1.00 = 13.7044 |
200 |
2.00 |
14.7044 - 2.00 = 12.7044 |
300 |
3.00 |
14.7044 - 3.00 = 11.7044 |
Discount Amount Based on Extension
This example illustrates volume discount based on extension with a discount amount. The example assumes that the customer's Price class is 6, so the unit price is 14.7044. If the customer orders 14 to 21 items, the order total would be more than 200, but less than 300. The discount will be 3.50. The unit price will be 12.7044.
Minimum value |
Disc amount |
Price per unit |
100 |
2.50 |
14.7044 - 2.50 = 12.2044 |
200 |
3.50 |
14.7044 - 3.50 = 11.2044 |
300 |
4.50 |
14.7044 - 4.50 = 10.2044 |
Discount % and Amount
You can use a discount percent and/or a discount amount. If you enter both a Disc % and Disc amount, the program applies both. Your setting for the Apply discount amount or percent first option in the System Options Maintenance (XM) program (Pricing Options) determines the order in which they are applied.
Discounts
When you set up a discount hierarchy, the pricing routine makes a second pass through the pricing file to find a discount that can be applied, using the order specified in the discount hierarchy. The pricing routine applies these discounts after it:
Calculates a price
Applies volume discounts in the price record
You can create discount records for specific items and/or customers, but typically you would set them up for classes of items (product class, product subclass, or item price class) or classes of customers (customer type or customer price class).
Discount records contain a percent or flat amount to be subtracted from the calculated price. For example, suppose that a discount record contains these discount structures:
Structure |
Type |
List Price |
Adj % |
Adj Amount |
Description |
1 |
L |
|
5.00 |
|
5% off the calculated price |
2 |
L |
|
|
2.00 |
Calculated price - 2.00 |
Notice that these discount structures do not reference list prices. The 5% discount applies to all items within a product class or to customers in a customer class who also have a Price code of 1.
Each price record can contain as many as nine discount structures. The Price code field in the customer's record in the Customer Maintenance (CM) program determines which discount structure applies. For example, if the customer has a Price code of 1, the pricing routine looks at the first discount structure in the price record.
If you have customers that have a blank Price code field, you may want to select the Use list price 1 as default? option in the System Options Maintenance (XM) program.
Customer and Order Discounts
The discount record sets up discounts that typically apply to classes of items or classes of customers. If you want to grant discounts to a specific customer, you can enter them in the Gross disc %, Accrued disc %, and/or Misc disc % fields in the customer's record in the Customer Maintenance (CM) program. These discounts are defaults on the sales order header. The order entry operator can override them.
In the Sales Order Maintenance (OE) and One-Step Invoice Entry (RE) programs, the operator can also enter a discount that applies to a specific line.
Contracts
The pricing hierarchy you set up in the Price Hierarchy Maintenance (PHM) program determines the types of contracts you can enter in this program. For example, you may issue a contract to a specific customer for an item or for multiple items.
You can also set up contracts by customer type or customer price class. You might also set up contracts for items by product class, product subclass, or item price class.
Contracts can be in effect for a range of dates or until the customer orders a specific quantity. When the contracted quantity is reached, the customer service rep (specified in Customer Maintenance) is sent an advisory email.
Full pricing?
If a contract sets a price for all purchases of an item, enter that price in the Price field. For example, every time the customer orders this item, the price is 45.00, regardless of the volume ordered on a specific order.
If the price can vary depending on the quantity purchased on a single order, select the Full pricing? field. Then you set up a pricing for the item with volume discounts, just like you set for a price record. You might also select the Full pricing? field when the contract is for a customer type or customer price class, and enter prices, an adjustment percent, and/or an adjustment amount for levels in the pricing structure that correspond to the Price code field in the customer's record in the Customer Maintenance (CM) program.
Configured Products
For a configured product, you can set up a selling price for the configured item or use configured pricing.
If the options are for color or other factors that do not affect the price, you can set up a price record for the configured item.
If the components selected affect the price, you will want to use configured pricing and have the program total the price of the components selected. When you use configured pricing, the order entry operator has the option of changing the configured price by clicking Line price.
Surcharges
Before you can enter surcharge records in the Price-Contract Maintenance (PCM) program, you need to set up codes in the Surcharge Codes Maintenance (TSCM) program for the surcharges that you will use for your customers. The code determines whether the surcharge is based on a percent of the item's price or cost or the set amount is per unit ordered, the weight of the item, or per line. You can also set whether the surcharge needs to be recalculated during invoicing because rates are highly variable and may change between order entry and invoicing.
Then you can enter surcharge records for each level of your hierarchy. If your hierarchy is by item, you need to enter a record for each item that has a surcharge. You can select up to six surcharge codes per record.
View Image
You can attach a graphic or web page to the item's record. For example, you may want a picture of the item or its catalog page.
Use the item number as the name of the image file. For example, if the item's number is 1234 and the file type is a TIF, then name the file 1234.TIF.
Store the image in the directory that you have specified in the Base path and Item folder options in the System Options Maintenance (XM) program (Help and Other Path Options).
For the Image type field in Enterprise Item Maintenance (IM) program for item number 1234, select the graphic type. In this example, select tif. If the file type of your graphic is not listed, you need to add it to the Graphic Image Codes Maintenance (TGC) program.
Click View image to display the graphic.
Audit Trail
To activate an audit trail, select one of the files listed below in the Audit Trail Maintenance (XAT) program. The system records all transactions. You can then run the Audit Trails (ATR) program and select that file to print a report of these transactions.
I1P: Inventory Price
C1DH: Contract Header
C1DD: Contract Detail