Fundamentals of Oracle

Pricing Cloud
Objectives
After completing this session, you should be able to:
 Price a sale order
 Describe pricing strategies, customer pricing profiles, and purpose of pricing
segments
 Explain pricing strategy assignment
 Derive pricing strategy for a customer
 Understand overview of pricing algorithms
 Explain how pricing algorithm price an order
 Explain how does data cache work for Pricing

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How does a SO is priced ?

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Pricing Profiles, Segments and
Strategies
Customer Pricing Profiles
 Grouping of customers based on certain attributes that describe their buying
behavior
For e.g.: size of the customer, revenue potential, cost incurred to serve etc.
 Date effective as a customer profile can change over time
 Seeded attributes provided to create customer pricing profiles:
 Revenue Potential
 Cost to serve
 Customer Value
 Customer Rating
 Customer Size

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Customer Pricing Profiles
(Cont..)
Navigation: Pricing Administration > Task List > Pricing Strategies > Manage Customer Pricing Profiles

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Pricing Segments
 Categorizing customers based on their buying behaviors, common
characteristics and understand their business motivations, and offer a pricing
solution.

 For e.g.: you may want to provide similar prices and discounts for your
wholesale distributors who share common attributes

 Identifies targeted group of customers to apply specific pricing rules – prices

and discounts etc.

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Pricing Segments (Cont..)
Navigation: Pricing Administration > Task List > Pricing Strategies > Manage Pricing Segments

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Pricing Segments (Cont..)

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Pricing Strategies
 Collection of pricing rules that together define approach for achieving
specific goals around pricing and selling of products for each group of
customers/ pricing segments
 Identifies a specific pricing objective – penetrate market, maintain position,
phase out a product
 Pricing rules include – price list, discount list, cost lists, shipping charge lists,
currency conversion list, pricing guidelines

Navigation: Pricing Administration > Task List > Pricing Strategies > Manage Pricing Strategies

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Pricing Strategy Assignments
 Associating pricing strategies to pricing segments
 Provides mechanism to assign different pricing strategies for the same pricing
segment in different selling scenarios
Navigation: Pricing Administration > Task List > Pricing Strategies > Manage Pricing Strategy Assignments

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Pricing Algorithms
Key pricing algos in the context of OM
and what do they do?
Pricing comes predefined to use the Price Sales Transaction algorithm and the
Calculate Sales Order Totals algorithm to perform most of the pricing for a sales order

Price Sales Transaction pricing algorithm performs the following work

 Determine Pricing Segment
 Determine Pricing Strategy
 Get Price List
 Apply Discounts
 Calculate Shipping Charges
 Calculate Tax
 Calculate Totals

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When do pricing algorithms calculate price for Sales
Orders?
Following sequence used to price a sales order
Action # Action Step in Price Sales Step in Calculate Sales Order Totals
Transaction
1 Order header entered and customer Derive Pricing Strategy Calculate List Price Total
selected
2 Item is selected from search Get Base List Price NA
Apply Adjustments
Calculate List Price
Apply Discounts
Calculate Net Price
Compute Sales Tax
Get Costs
Calculate Margin

3 Add selected item to order line NA Calculate List Price Total

Calculate Discount Total
Calculate Net Price Total
Calculate Tax Total
Calculate Total Credits
Calculate Shipping Total
Calculate Total PayNow
4 Save/ Reprice/ Submit NA Same as above steps as in Action 3

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Data Cache
Data Caching in Pricing
Pricing Execution process in EBS:
Pricing Engine
Calling applications Execution
-
Order Price Lists
Management Pricing APIs Modifiers
Pricing Setup Data Qualifiers
Formulas
Pricing Request
formation

DB Layer
Application Layer

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Data Caching in Pricing (Cont..)
Pricing Execution process in Cloud:

Calling
applications - Pricing Engine Pricing Setup Data
Order Execution Pricing Strategies,
Management Pricing Rules,
Pricing Algorithms
metadata,
Shared
Application Session
Module cache
Cache
Application Layer DB Layer

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Data Caching in Pricing
(Contd..)
What all are cached?
 Pricing rules
 Reference entities – FSM Pricing Setup data, Matrix Classes, Item Attributes and Customer
attributes
 Pricing algorithms and service mappings
When is data cached?
 Pricing rules and reference entities - with first time use for pricing a transaction
 Pricing algorithms stored in cache during very first invocation.
 Pricing algorithms leverage user session cache hence if there is a new published version of
an algorithm then it is loaded into cache when a new user logs in and accesses it for a
transaction.

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Data Caching in Pricing
(Contd..)
Does cache data refresh or expire?
As per default settings
 Data is reloaded into cache after 60 minutes
 And if any of the cache data is not used for 10 minutes, it will expire

How to disable cache in test environment?

Disabling pricing
cache

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Pricing Rules Data Caching use
cases
Price for an item A changed from $60 to $70 Caching Unit Price
Sales rep Amy creates SO1 for item A Enabled $60
Sales rep Nicole logs in and creates SO2 for item A Enabled $60
Pricing Admin Jennifer updates the price of item A to $70 Enabled NA
Amy signs out and signs back into the application and Enabled
creates new order SO3 $60
Nicole reprices the SO2 Enabled
$60
Sales rep Amy creates SO1 for item A Disabled $60
Sales rep Nicole logs in and creates SO2 for item A Disabled $60
Pricing Admin Jennifer updates the price of item A to $70 Disabled NA
Amy signs out and signs back into the application and Disabled
creates new order SO3
Nicole reprices the SO2 Disabled $70

$70

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Pricing Algorithms Data Caching
use cases
Ver1 of Price Sales transactions is the active published version Effective Algo Ver
and it is modified to Ver2
Sales rep Amy logs in and created SO1 Ver1
Nicole logs in and enter some sales orders Ver1
Sophie logs in and proceed with entering SOs Ver1
Pricing Admin Jennifer modifies the alog and published new NA
version – Ver2
Amy has logged out NA
Sophie and Nicole continue to enter more orders
Amy logs back in and enters a new order
Ver1
Dave another sales rep logs in and enters a SO
Ver2
Ver2

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Cloud vs EBS
Cloud vs EBS, some useful features of Pricing
Cloud
Cloud EBS
• Customer driven pricing setup • Product driven pricing setup,
• Effective dates include time stamp customer focus is achieved through
qualifiers and SO defaulting rules
• Pricing guidelines
• Time stamps, pricing guidelines not
• Highly Configurable – access to pricing available
algorithms
• Discounts and charges are separated,
• Ability to add adjustments at cannot define both through same
individual pricing rule level entity or rule
• Cost + markup pricing

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Features yet to be available in
Cloud
 Promotions
 Product category based pricing. Cloud will have ability to define prices using different
catalogs/category set’s categories. For e.g. you can define prices using Inventory
categories or Sales & Marketing categories unlike EBS where only Inventory
categories are supported out of box
 Flat shipping rates
 Order header level charges
 Extensive documentation on attribute based pricing

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Demo
 Review pricing segment and strategy for a customer
 Create a SO and verify the pricing strategy used
 Create a price list and a discount list, create a new pricing strategy using these
 Use the new pricing strategy – pricing strategy assignments

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Q&A

26
Quiz
Identify key setups of Pricing Cloud?
A. Customer Pricing Profiles
B. Pricing Segments
C. Pricing Strategies
D. Pricing Strategy Assignments
i) A,B,C ii) B,C,D iii) A,C,D iv) All of above

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Quiz
Can we define a shipping charge and discount on it in same pricing rule?
A. Yes
B. No

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Quiz
Are inventory item category based discounts/shipping charges supported in Cloud
R13?
A. Yes
B. No

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Quiz
As per default settings, after how many minutes pricing data cache refresh?
A. 60
B. 10
C. 30

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