Integration Between

Purchasing and Advanced

Pricing in Oracle Applications
Release 11.5.10
Tina Mitchell & Arwen Hawes
BIAS Corporation
July 20th, 2007

Overview
Purchasing Professionals can now define complex pricing
structures using the functionality available with Oracle
Advanced Pricing
New integration between Advanced Pricing and Purchasing
- New Controls Reduce Manual Keying of Prices on Requisitions
and Purchase Orders
- Automates and controls pricing
- Manages time sensitive promotions

Problems in Purchasing Prior to

Integration Between the two
Applications
Difficult to manage price breaks
Difficult to manage time sensitive
promotions Difficult to manage
purchasing prices
based on attributes of
the item being
purchased

Case Study
Jennys Pancake Emporium purchases maple syrup
from Vermont Syrup Company.
Different volumes have different prices
Different grades have different prices

Purchasing agents are manually tracking the

supplier prices due to the complex pricing.
Due to variety of reasons, the price on the
purchase order could be incorrect.
The Accounts Payable group has recurring issues
with invoice discrepancies between the purchase
order and the invoice.

Cost Lost Per Transaction

Potential to lose volume discounts in
Purchasing.
Potential to have incorrect cost of
goods in the warehouse and in fixed
assets.
Potential Increase in Cost Per
Transaction to remediate the issue
- Inventory, Purchasing, Payables, Fixed
Assets, etc.

Terminology
Purchase Order Type: Standard,
Contract, Blanket.
A Contract Purchase Agreement is
an agreement of specific terms and
conditions without indicating the
goods and services that you will be
purchasing. Standard purchase orders
are created, referencing the contract
purchase agreement.

Terminology, cont
A Price List is a list of prices from a particular
supplier for an individual item or item category. Prices
can be stored by:
- unit price
- percentage price
- formulaic price
- price break
A Modifier is an Oracle specific term used in pricing.
Modifiers alter the price of an item. They can discount
or increase the price.
A Pricing Attribute is a property of an item that is
used in the derivation of a price. It could be any range
of characteristics that are documented within Oracle.

Basic Set Ups

Required
Profile Options
Item and/or
Purchasing
Category
Contract Agreement
Optional
Price List
Modifier
Approved Supplier

Demonstrations
1. Price changes when the purchasing contract
is referenced
2. Price changes when different volumes are
ordered
3. Price changes when different grades are
ordered
4. Price is Modified when specific grade is
purchased, regardless of volume

Implementation
Considerations
Integration is limited to single line
discounts and surcharges.
Integration limited to Requisitions
and Standard Purchase Orders
(referencing a Contract Purchasing
Agreement).
Release 12 introduces integration
with blanket purchase agreements.

Conclusion
Integration between Purchasing and the Advanced
Pricing module:
- Provides buyers with the ability to develop and
maintain complex pricing structures.
- Provides buyers with a more effective tool to
manage multiple pricing programs, from simplistic to
complex.
- Provides historical pricing history.
- Reduces matching errors due to inconsistent pricing.
- Provides requesters and their approvers with
accurate pricing information.
- Leverages a flexible rules based engine to automate
the pricing process

References
Oracle Purchasing Integration with
Oracle Advanced Pricing Release
11.5.10; September 2006; Metalink
Note 394490.1
11.5.10: Does Advanced Pricing In
Purchasing Require Oracle Pricing To Be
Installed?; Metalink note 299698.1
Questions about using Advanced
Pricing in Purchase Orders and
Requisitions; Metalink note 343100.1