# Price by Whole Order Setup Examples

The Price By Whole Order function is very powerful and sophisticated function.  The most critical element of this function is the setup.  To help you better understand how this function works, we have setup the following three scenarios with Price By Whole Order Setup examples:

1. Case By Case Scenario

2. Universal Scenario

3. Excluded Customer Type and Product Category Scenario

(This is followed with a How-To process the order example)

Example I - Case by Case Method

Company ABC sells four different items: A100, A200, A300, and B200.  They determine the price breaks for each item based on the total order value.  They also maintain different pricing for two Customer Types, RETL (retailers) and DLR (dealers).  The pricing tables defined below reflect the pricing structure for each customer type.

Customer type RETL

 Item\Value of order Base Price < \$500 \$500 - \$1,000 >= \$1,000 A100 100 100 90 80 A200 150 150 135 125 A300 55 55 50 45 B100 75 75 68 60

Customer type DLR

 Item\Value of order Base Price < \$500 \$500 - \$1,000 >= \$1,000 A100 100 90 81 72 A200 150 135 121 112 A300 55 49 45 40 B100 75 67 61 54

The “Base Price” (Selling Price in the Inventory Item Master File) is used to calculate the total order value and the total order value determines the price breaks.  For example, assume that a customer (RETL) placed an order for 4 A100s and 2 A300s.  Based on the “Base Price” column, the total order value for this order is calculated as follows:

Standard Order Processing

4 A100, at \$100/EA =     \$400

2 A300, at \$55/EA   =    \$110

Total        \$510 (before Price By Whole Order is calculated)

Customer total order price break is  \$500-\$1,000

4 A100, at \$90/EA   =    \$360 (recalculated value to be billed)

2 A300, at \$50/EA   =    \$100 (recalculated value to be billed)

Total         \$460 (recalculated value to be billed)

This Case By Case scenario would be set up as follows:

1.  Price By Whole Order Setup

NOTE:  You may define all 8 Price Codes in field #3.  The system will use price codes in the sequence that they were entered.

2.         Verify Customer Types are defined in A/R Maintenance Customer Type File.

3.         Verify Inventory Items have a Selling Price Amount defined.  This is done in Inventory Maintenance - Item File

4.         Price Code File Maintenance

Pricing basis for this Price Code is Discount from Base (Selling) Price, “D”.  Other Pricing basis available are:

M=Markup Percent, P=Price, A=Discount Amount, and U=Markup amount.  Markup from Price or Cost is

defined in the Order Entry Line Item Screen setup.

Price Code Net Effect: Item A100 for Customer Type RETL

Total Order Amounts:     \$0.00   to  \$499.99         Discount is   0%             Sell Price = \$100.00

\$500.00  to  \$999.99      Discount is 10%                        Net Sell Price =  \$ 90.00                        \$1,000 +                       Discount is 20%            Net       Sell Price =  \$ 80.00

Pricing Basis based on P = Price

Price Code Net Effect: Item A200 for Customer Type RETL

Total Order Amounts:             \$0.00   to  \$499.99              Sell Price = \$150.00

\$500.00   to  \$999.99          Net Sell Price = \$135.00                                                                                \$1,000 +                            Net Sell Price = \$125.00

NOTE:  Each pricing code is unique and you cannot have Pricing Basis variations for that same

price code.  For example:

Price Code

Unique

Not Allowed

Unique - Allowed

Unique - Allowed

Type

3

3

3

3

Pricing Basis

Discount

Discount

Discount

Customer Type

RETL

RETL

RETL

Item Number

A100

A100

A100

##### A200

Example II – Universal Method

This method has separate levels for the items and customer types.

Table 1: Pricing levels for Customer Types

 Type\Level Price Level 1 Price Level 2 Price Level 3 DLR <\$250 \$250-\$500 >=\$500 RETL <\$500 \$500-\$1,000 >=\$1,000

Table 2: Item Pricing Levels

 Item\Level Base Price Level 1 Level 2 Level 3 A100 100 100 90 80 A200 150 150 135 125 A300 55 55 50 45 B100 75 75 68 60

The advantage of this method over the Case By Case method is the ease of setup, maintenance and updating pricing changes.  For example:

If we needed to add a new Customer Type pricing level or revise an existing pricing level, we would not need to add or revise each item break point as in the Case By Case Method because all item pricing break points are identical for all customer types.   In essence, we also have different pricing for customer types by how we define the Customer Type Price Levels.

This Universal Method scenario would be set up as follows:

1. Price by Whole Order Setup

Note:    Price Codes 5 & 7 sets the price discount levels by whole order.

Price Codes 2, 4, and 8 sets the price discount levels by product category.

In the pricing hierarchy, the system uses Price Codes in the sequence entered.  In our above setup example, Price Code 5 (Customer Number) would be used first.  Price Code 7

(Customer Type) would be used when there is not a Customer Number Price Code defined for the order customer.

Prices codes may be categorized as specific and general, and the specific should take precedence over the general in the sequence entry.   Had we entered the sequence as 7 and 5, then Customer Type (general) price codes would have priority and for all practical purposes nullify Customer Number (specific) price codes.

Note:    You can use all the eight pricing codes here.  Price Code 6, Item Number, was selected as the price code to determine the net effective price for the pricing levels defined in field 3.  Although the system will use the first price code entered, as per the pricing hierarchy, it did not make sense to add additional price codes in this field since every item sold has an Item Number.

1. Define Price Code for Customer Type RETL

Price Code Net Effect: Customer Type RETL

Price Level 1      =          Total Order        \$0.00 to \$499.99

Price Level II      =          Total Order    \$500.00 to \$999.99

Price Level III     =          Total Order \$1,000.00 +

1. Define Price Code for Customer Type RETL

Price Level 1                        =          Total Order        \$0.00 to \$249.99

Price Level II      =          Total Order    \$250.00 to \$499.99

Price Level III     =          Total Order    \$500.00

1. Setup Item Price Codes

Note:   Item A100 has 5 levels that determine the price.  This is to accommodate another customer type that has 5 price levels for total order amount. This is the ease and speed of setting up price codes using the Universal Method; the same price for all customers, but what determines the net effective price to use is the total order level setup in the Customer Type Price Levels.

Example III -Case By Case Method with Excluded Customer Type

and Excluded Product Category

American Window Films, Inc. (AWFI) sells window tinting film to their dealer channels (mostly jobbers).  AWFI has a competitor who sells to the same dealer channels.  AWFI’s dealers normally order one roll of film whenever they have an installation to do.  AWFI would like to encourage the dealers to order more by offering quantity discounts based on the order quantity total.  This will help AWFI compete against other competitors. The following pricing tables were defined by AWFI:

Price Table for Customer Type JOB1, JOB2, JOB3, JOB4 and JOB5

 Item\Level Brk Base Qty = 1 Qty = 2 to 4 Qty >= 5 A100 100 100 90 80 A200 150 150 135 125 A300 55 55 50 45 B200 2 2 2 2

Item B200 is an accessory with a small unit price and a large quantity. They do not wish to give discounts to item B200.  Furthermore, they do not wish to include item B200 quantities for calculating the order’s discount.  The product category for Item B200 is ACR.

AWFI also offers price discounts for their key dealers. The following pricing table was defined for their dealers (Customer type KEY):

Price Table for Customer Type KEY

 Item\Level Brk Base Qty = 1 Qty >2 A100 100 90 80 A200 150 135 125 A300 55 50 45 B200 2 1.5 1.5

AWFI also exports their films to foreign countries.  When they export, they do not wish to use price discount by whole order. Each export customer has a special negotiated price for each individual item.  For export customers, the customer type is EXP

This Case-By-Case scenario with excluded Customer Types and Product Categories would be setup as follows:

1.         Price by Whole Order Setup

Note:    Field 3

If option 5 (Total By Whole Order) is selected, you can define up to five product categories to exclude from Price By Whole Order.

Field 4

Price Codes selected:

1 = Customer Number/Item Number

3 = Customer Type/Item Number

6 = Item Number

Field 5

Q = Base On total Quantity selected as basis to determine Levels

2.       Verify in A/R Maintenance Customer Type File that Customer Type EXP does not use Price By Whole Order

Note:    Field 3

The choices here are “Y” = Yes and “N” = No.  The default value is “Y” and if this field is left blank, it accepts “Y” as the default.  For this reason, if you want to exclude a customer from Price By Whole Order you must enter “N” in this field.

1. Set Up Price Codes 1, 3, and 6.

Code 1: Customer No./Item No. for Export Customers

Each export customer has a special negotiated price for each item and do not use Price By Whole Order pricing.

Code 3: Customer Type/Item No. for Customer Type Key

Code 6:  Item No. for All Other Customers, (JOB1 – JOB5)

In the pricing hierarchy, customers who are not excluded, (Type EXP), and who are not Key type customers will receive this pricing based on total order quantity.  This code then fits customers who we want to encourage to buy more by offering quantity discounts based on the total order quantity.

Price Code 6 Setup for Item A100

NOTE:        The “Min-Qty” applies to the whole order quantity. In this particular scenario, the whole order quantity includes items A100, A200, and A300.  If order has 2 ea. A100, 2 ea. A200, and 1 ea. A300, the total order quantity would be 5;  the customer would pay \$90.00 for Item A100, and the respective Level 03 Prices for Item A200 and A300.

#### Using Price By Order

In this order entry example, we will be using the Case By Case method, pricing by whole order, and the break levels are based on quantity.  These are the same defaults defined for Example III, American Window Films, Inc.

The above figure shows that we have entered 2 ea. A100, the Unit Price is \$100.00, but the Price Break Popup window (F7 Key) shows that if our total order quantity is 2, the price should be \$90.00.  This is because we must recalculate the order using the F4 Key to reflect the discount pricing.  This is done after you have completed the line item entry.  If you have not recalculated your order after you complete all line entry items, the system will do it automatically when you exit the line item screen and go to the billing screen.

We will recalculate this line item, enter a few more items, and then show you an example of how to recalculate an order.

The order now has 4 line items and a total quantity of 28 ea.  This information is displayed in the upper right portion of the line item entry screen.  In the lower section of the screen, we see that Item A200 does not reflect total order quantity pricing, nor does Item A300.  Since we have not recalculated after completing the line item entry for Item A100, we cannot be sure if this is the right price or not.  It is important, especially if you are on the telephone with your customer, that you recalculate after each line item entry to know the correct selling price.  It is equally important that you use the F7 Key to be aware of the break levels so that you recommend to your customers that they bump their order to get a better price.

Recalculation is simple, easy, and very straightforward.  All it requires is pressing the F4 Key after completing a line item entry.  For this example, we will recalculated and show you the net effect on the next page.

Order recalculated and Items A200 and A300 now reflect the 2 to 4 quantity discount pricing.  The system did not use the quantity for B200 in the recalculation because B200 is product category ACR which we excluded from Price By Order.