Setting up Item Classification pricing

CLA-COPR (Classification costing/pricing): If you want to be able to predefine purchase prices for the items under item classification you must activate this function. Prices are generated and applied AFTER item creation from the applicable item classification definition. This is because the pricing routine requires the item to be completely created before any pricing calculation can be applied.

Aut stand pur price (Automatic update of standard purchase price): Set this flag to YES if you want the cost prices (Standard cost of sales) to be updated automatically in the Item file (Inventory information and Warehouse panels) for today’s period when purchase prices are downloaded from Item Classification. If this flag is set to YES, the latest cost prices can be updated automatically during the daily batch run (i.e. Update actual purchase price along with Refresh landed costs). This is because cost prices are not updated per period as purchase prices are and the costs must be based on today’s SPP. This can be done regardless if the Item classification costing/pricing is active or not.

Margin cost basis: Set this flag to 5 (Standard cost sales) if you want that cost to be used as the basis to calculate the profit margin at Sales order line entry, Quotation line entry, Sales order profit enquiry and Sales quotation profit enquiry.

Cost per warehouse: Set this flag to YES if you have more than one warehouse in which you store goods and you want to more accurately identify how much it costs to supply each warehouse with goods. It is typically be used when landed costs are attached to Purchase orders and/or Internal replenishment orders. When the SPP prices are downloaded, the costs on Item file, Warehouse panel level will be updated. You can also manually trigger an update of these costs via the Item file, Warehouse panel.

Add a new record and define the following mandatory information.

• Supplier for which the price applies
• From date (start date of the pricing period. The To date is calculated automatically)
• Classification unit (the standard purchase price unit)
• Price (the standard purchase price)
• Currency (the standard purchase price currency). The price will be created/downloaded in two different currencies if this currency differs from the supplier’s primary currency.

The following field relates to the validation of any characteristic exceptions if you plan on defining these type of pricing exceptions:

• Combined rules: The default value for this field is YES for new records. If you set this field to NO, an integrity check (validation) must be performed to ensure that the item connected to the SPP price group (for the Item classification definition is only connected to one characteristic exception set-up. This field is protected if the SPP record is active or it the record is inactive and characteristic exceptions for the SPP group exist. See Combined rules flag for characteristic exceptions in Item Classification pricing for more information.

The following fields relate to the standard cost for sales calculation Complete if you want the system to calculate this cost and eventually download it to the items attached to Item classification definition:

• SCS operator: The operator together with the SCS price factor is used to calculate standard cost for sales. Enter the operator for this price group (+, -, / or %).
• SCS price factor: The price factor together with SCS operator is used to calculate the standard cost for sales. Enter the SCS price factor (in system currency) for this price group.

Characteristic and/or Item exceptions:

If you want the item(s) to receive a different base purchase price than the one defined as standard you can define the pricing exceptions per characteristic and/or item. Note: Item exceptions take precedence if both are defined.

Characteristic exceptions: Select this option and add a new record defining the line number, operator and price factor. Update and then select the Criteria option to define the details for the characteristic exception (the characteristic, its value and operator).

Example of characteristic exception: If you wanted to add 10 to the price for any item that has the characteristic SHEETPERBOX (with value 2500) attached, you would define the following:

Characteristic: SHEETPERBOX (on Criteria panel)
Operator: = (on Criteria panel)
Value: 2500 (on Criteria panel)
Price operator (on Characteristic exception panel): +
Price factor (on Characteristic exception panel): 10

The result would be that the price factor of 10 should be added (+) to the base price IF the characteristic SHEETPERBOX for the item is equal to (=) the value 2500.

Item exceptions: Select this option and add a new record defining the item that will receive the pricing exception, the operator and the price factor.

Activate the SPP group:

When all information has been defined you need to activate the SPP group to be able to download the pricing information. Select the Change option for the applicable SPP group and change the Active flag to YES.

CLA-COPR (Classification costing/pricing): If you want to be able to predefine sales prices for the items under item classification you must activate this function. Prices are generated and applied AFTER item creation from the applicable item classification definition. This is because the pricing routine requires the item to be completely created before any pricing calculation can be applied.

If this flag is set to YES, you will be able to enter a period that overlaps already existing periods but the new period must start with another date. The Sales price is then retrieved from the period with the starting date nearest to the current/selected date.

If this flag is set to NO, you will not able to enter a period that overlaps some of the already entered periods. Existing periods must be changed before the new one is entered.

Add a new record and define the following mandatory header information.

• Price list into which the standard sales price will be updated.
• Currency (the standard sales price currency)
• Classification unit (the standard sales price unit)
• Formula used to calculate the standard sales price.

If you want to have validity periods for the prices, define the following: (Note: The Short term pricing flag in the DIS control file controls the overlapping of periods. See above for information.)

• From date (start date of the pricing period. The To date is calculated automatically)

The following field is mandatory if the formula used in the SSP calculation does not define the sales price as a fixed value. This is to ensure that the sales prices are updated based on the purchase prices (standard cost sales).

• SPP/SCS group: Enter/select the supplier from the SPP/SCS group. When the standard purchase price group is changed and characteristic exceptions, item exceptions or quantity limit dependent prices are already linked to the SSP group, the batch process needs to be run to update all prices defined on exceptions and quantity limits. When downloading the sales price information the standard cost of sales information will also be retrieved from the SPP group and updated in the Item file (i.e. Inventory information and Warehouse panels)

The following field relates to the validation of any characteristic exceptions if you plan on defining these type of pricing exceptions:

• Combined rules: This field is set to YES by default for new records. If you set this field to NO, an integrity check (validation) must be performed to ensure that the item connected to the SSP price group (for the Item classification definition) is only connected to one characteristic exception set-up. This field is protected if the SSP record is active or if the record is inactive and characteristic exceptions for the SPP group exist. See Combined rules flag for characteristic exceptions in Item Classification pricing for more information.

The following field is automatically updated:

• Standard sales price for the SSP group

Characteristic and/or Item exceptions:

If you want the item(s) to receive a different base sales price than the one defined as standard you can define the pricing exceptions per characteristic and/or item. Note: Item exceptions take precedence if both are defined.

Characteristic exceptions: Select this option and add a new record defining the line number, formula used to calculate the pricing exception and any input values for any user-defined input value description defined in the formula. Update and then select option Criteria to define the details for the characteristic exception (the characteristic, its value and operator).

Item exceptions: Select this option and add a new record defining the item that will receive the pricing exception, the operator and the price factor.

Activate the SSP group:

When all information has been defined you need to activate the SSP group to be able to download the pricing information. Select the Change option for the applicable SSP group and change the Active flag to YES.

The Download prices function key downloads the prices for all suppliers applicable for the item.

Note: The download from this location is only available if the Cost per warehouse flag is set to NO and the Aut stand pur price flag is set to YES (both in the DIS control file).

Note: The download from this location is only available if the Cost per warehouse flag is set to YES and the Aut stand pur price flag is set to YES (both in the DIS control file).

Standard cost: The standard cost will be updated with the Standard purchase price (SPP) with landed costs. The landed costs calculation is done during any of the following:

• the download of the Standard purchase prices (SPP)
• when cost prices are updated during the daily batch run (i.e. Update actual purchase price)
• when the Refresh landed costs program is manually started.

Standard cost sales: The standard cost sales is calculated automatically from Standard cost using up-marks defined in the item classification definition.

• If the SSP group has not been activated, this program is called in simulation mode, allowing you to view the price information for the SSP group.
• If the SSP group has been activated, this program is called in Update mode, allowing you to download the prices, per price list, to the Item/Sales prices panel for all items connected to the grouping structure of the item classification definition.

You can also view the prices via the Price simulation function key on the Work with item classification, Standard sales price header panel.

The F10=Download prices function key downloads the prices for all prices lists applicable for the item.