Pricing modifiers
Products sell at different rates. You can measure product sales rankings to compare inventory items by hits, amount movement, or stratification, and to find the top performers. These rankings are then used to apply pricing discounts or premiums to products you sell.
Sales rankings are recorded on the Product Warehouse Product Setup record and can be used as a basis to apply pricing modifiers set up in PD Pricing Modifier Setup. There are four ranking methodologies used by the pricing modifiers. Each ranking method allows for positive or negative percentage modifiersthat increase or decrease a product’s price.
Company or warehouse hits ranking
Hits refers to the number of times a product is included on sales order and warehouse transfer line items, including lost business transactions. Product Replenishment Setup provides the parameters for the Product Administration Inventory Classification and Rank Report to compile the hits by company or warehouse. These ranks are then stored on the Product Warehouse Product Setup record. When a pricing modifier is based on company or warehouse rank, a percentage modifier value is assigned to each rank level that is used to calculate the adjustment to be made to the product’s price.
Review and verify your Product Replenishment Setup parameters before you implement pricing modifiers in your pricing structure. If the number of ranking levels are changed in Product Replenishment Setup, you might require subsequent changes to the rank percentages in PD Pricing Modifier Setup.
Class
The Product Warehouse Product Setup ordering class is calculated by the Product Administration Inventory Classification and Rank Report according to the annual movement of amounts through inventory. Class 1 represents the products with the highest annual movement of amounts through inventory. Class 13 represents dead stock. All inventory products are included in the classification except frozen class products, inactive products, and labor products. When a pricing modifier is based on class, a percentage modifier value is assigned to each class level (1-13). Based on the product’s current classification in Product Warehouse Product Setup, the appropriate percentage modifier is applied before the product price is calculated.
ABC Stratification
The Product Administration ABC Inventory Evaluation Report stratifies inventory based on the product’s gross margin return on investment, sales, and number of hits to determine a final A-D rank, which you can adjust. When a pricing modifier is based upon ABC stratification, a percentage modifier is assigned to each stratification level (A-D). Based upon the product’s current stratification levels in Product Warehouse Product Setup, the appropriate percentage modifier is applied when the product price is calculated.
You can select any one of these ranking methods when you set up a pricing modifier table in PD Pricing Modifier Setup.
Vendor On Sale Rebates
If an order line entered in Sales Order Entry qualifies for a Vendor On Sale rebate, you may not want a pricing modifier applied, if one is associated with a pricing record. You can control this when you associate a pricing record with a pricing modifier in PD Pricing Setup. You can select or clear the Allow with Vendor on Sale Rebates option.
Nonstocks
When you set up a pricing modifier rank types, you can assign a special modifier percentage to be applied to nonstock products or stocked products that are entered as a nonstock item on an order line. This nonstock percentage is tracked separately from the percentages applied to each rank.