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Oracle 11i Advanced Pricing

Dont Customize, Extend!


An OracleTechnical WhitePaper
May2001
Oracle Corp 2001 All Rights Reserved Oracle Advanced Pricing: Extend Dont Customize 5/16/01 9:51 AM
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Dont Customize. Extend!
EXECUTIVE OVERVIEW
Recently, Oracle demonstrated Advanced Pricing capabilities to an Internet Infrastructure
Provider in the Silicon Valley. This company sells nothing but services, such as email server
time and space, web hosting, e-commerce processing, etc. We felt Advanced Pricing was a
perfect fit due to the large number of configurable service offerings sold by our prospect.
Our prospect required pricing rules that necessitated pricing calculations very tailored to this
particular customer. Our analysis determined that these scenarios could be easily implemented
using the standard Advanced Pricing functionality and the Get_Custom_Price public API.
The purpose of this white paper is to describe how our team was able to quickly and easily
conform Advanced Pricing to meet these demanding requirements using this API, which is one
of its key extensibility features.
Using APIs to Extend Advanced Pricing
It is important for everyone implementing Advanced Pricing including Customers, Sales
Consultants, and Implementation Consultants, to understand that the use of
Get_Custom_Price is an extension and not a customization because this is a public, supported
API.
It is well understood that customizations are fraught with problems. Oracle recommends that
customers avoiding customizations wherever possible. However, using the extensiblity APIs
of Advanced pricing lets you extend the functionality of the product while avoiding the
downsides of customization. The data structure underlying Advanced Pricing may change
over time, but the mechanics of Get_Custom_Price will not (or will be migrated if they
do). In other words, if you keep all your custom code in this function, you're playing by the
rules.
In many competitor systems, providing the kind of functionality this customer required would
have required an extensive, invasive customization. But with the extensibility features like
Get_Custom_Price, the downsides of customization are readily avoided.
The Clients Pricing Requirements
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The scenarios the client presented us with were:
A prorated item. Any service fee should be prorated based on the number of days left in the
month.
A special surchargeitem. Every sales order has, as its last item, a fee equal to 20% of the amount
of a specific group of items on a sales order.
A servicerefund credit item. The amount refunded on a monthly basis to a customer of our
prospect is based on a number of arbitrary "service credit" units. These service credit units are
then used in a formula which takes into account, among other things, the amount spent on a
specific group of services the prior month.
Quick Overview of Using Get_Custom_Price
We decided to use the Get_Custom_Price API with a formula to implement these
scenarios. (Although it is possible to model a 20% surcharge on an order without the use of
the custom API, the 20% surcharge is on the list price total of the order, not the selling price,
the latter being the prospect's requirement.)
To use Get_Custom_Price, you define a formula in Oracle Advanced Pricing and source a
formula line as a Function. After you save your formula, use Help>Diagnostics>Examine
to get the formula_id attribute value. You will use this value in Get_Custom_Price to
determine which block of code to execute for which formula.
Get_Custom_Price is a public function package QP_CUSTOM seeded as part of the QP
installation. In fact, the install creates only a package header. It is up to you to create the
package body function called Get_Custom_Price. This procedure has the following header
declaration:
FUNCTION Get_Custom_Price (p_price_formula_id IN NUMBER,
p_list_price IN NUMBER,
p_price_effective_date IN DATE,
p_req_line_attrs_tbl IN
QP_FORMULA_PRICE_CALC_PVT.REQ_LINE_ATTRS_TBL) RETURN NUMBER IS
Key values are passed into the procedure, like formula_id and list_price. You can use the
referenced PL/ SQL table is to retrieve information about the order and order line.
To facilitate maintenance, we defined constants in our code:
C_surcharge_formula CONSTANT INTEGER := 6026;
C_prorate_formula CONSTANT INTEGER := 6069;
C_service_credit_formula CONSTANT INTEGER := 6177;
where the number value is the formula_id attribute from the Applications. In the body of the
function, we use simple IF/ THEN based on what formula is calling
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Get_Custom_Price:
IF p_price_formula_id = C_prorate_formula THEN
.
.
END IF;
Client Scenario No. 2 Prorated Item
We begin with the prorated item because it is the simplest scenario. This item has a list price
which will be modified based on when this item is placed on (or repriced) on a sales order.
Assuming this item costs $2000, then the prorated price will be $2000 on April 1, $1000 on
April 15, and $66.67 on April 29. The formula for this is
price
# of days left in month * ------------------
# of days in month
Fortunately, SQL*Plus has a function called last_day which returns the last day of the current
month according to the sysdate global variable. The statement
TO_CHAR ( LAST_DAY (sysdate), 'DD' )
returns the number of the last day of month (31, 30, 29, or 28).
The actual code block is as follows where
p_price_formula_id is passed automatically,
C_prorate_formula is the constant for this formula_id,
l_number of days, l_todays date, l_number_of_days_left, and l_prorated_price
are local variables:
IF p_price_formula_id = C_prorate_formula THEN
-- get the last day of the month and the current day of the month
SELECT TO_NUMBER (TO_CHAR (LAST_DAY(SYSDATE), 'DD' )),
TO_NUMBER (TO_CHAR (SYSDATE, 'DD' ))
INTO l_number_of_days,
l_todays_date
FROM sys.dual;
l_number_of_days_left := l_number_of_days - l_todays_date;
-- apply the formula using the list price passed into this function
l_prorated_price := (p_list_price / l_number_of_days) *
l_number_of_days_left;
RETURN l_prorated_price;
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To set up the price list line for this item, be sure to enter a list price and reference the formula
that calls Get_Custom_Price.
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Scenario No. 2 Surcharge Item
Next, we discuss the 20% order surcharge item. This item's list price is 0 because it is
dynamically derived based solely on properties of the current order. One formula component
returns the selling price of the current order and other formula component is used to determine
the percentage discount.
In order to determine the order total, we use one SQL statement to determine the header_id of
the the parent header record of this line. Then we use another SQL statement to sum the
selling price of all lines on the order except the surcharge item. (Counting the surcharge item
would cause a recursive order amount increase on each line adjustment.)
SELECT SUM ( ordered_quantity * unit_selling_price )
FROM oe_order_lines_all
WHERE inventory_item_id != C_surcharge_item_id
AND header_id = [header_id for the surcharge item line]
The actual code block looks like this where
p_price_formula_id is the formuld_id passed into the Get_Custom_Price call
oe_order_pub.G_LINE.line_id retrieves the line_id for the current order line calling
Get_Custom_Price,
C_surcharge_item_id is the inventory_item_id value for the surcharge item you set up in
the item master:
IF p_price_formula_id = C_surcharge_formula THEN
l_line_id := oe_order_pub.G_LINE.line_id; -- get current line
SELECT oola.header_id -- get the header id for the order
INTO l_header_id
FROM oe_order_lines_all oola
WHERE oola.line_id = l_line_id;
-- sum the selling price of all lines except for the surcharge line
-- in the current order
SELECT SUM(oola.ordered_quantity * oola.unit_selling_price)
INTO l_order_price
FROM oe_order_lines_all oola
WHERE oola.header_id = l_header_id
AND oola.inventory_item_id != C_surcharge_item_id;
IF l_order_price IS NULL THEN
l_order_price := NULL;
END IF;
RETURN l_order_price;
END IF;
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Client Scenario No. 3 Service Credit
The third formula is the service refund credit necessary to calculate the actual monetary
amount to be refunded for services outages. This amount is based upon a tiered schedule of
service credit units which are arbitrary. The formula provided by the prospect was:
where the # of refund units is determined by the following tiered (range break) structure:
# of refund units Factor
0 75 10
75 200 12
201 350 13
351 14
For this project, we used the current month subscription charges instead of the past month
because the customer we set up in our demo system had no previous month's history.
Assuming the only subscription item is an item called L53-SUBSCRIPTION, the following SQL
script retrieves the total amount of L53-SUBSCRIPTION order lines for the current month that
are on booked sales orders:
SELECT sum ( oola.ordered_quantity * oola.unit_selling_price )
FROM oe_order_lines_all oola,
oe_order_headers_all ooha
WHERE oola.sold_to_org_id = [customer_id]
AND
oola.ordered_item = 'L53-SUBSCRIPTION'
AND
ooha.header_id = oola.header_id
AND
ooha.booked_flag = 'Y';
A better solution would be to define an item category that a customer would use to group
together items to be counted for the prior month subscription charges. In this case, you would
reference inventory_category_id when selecting eligible lines for the total.
It is important to understand that the surcharge will be added to the list price which was set on
the price list as a price break header. For this reason, we subtract the list price for the service
credit order line from the surcharge amount returned from Get_Custom_Price because this
amount will be added right back by the pricing engine.
To use the price break feature to define the refund credit ranges, you need to set up the item
as a price break header on the price list to define the tiered ranges (range breaks).
fees on subscripti s month previous
month in days of
units refund of
_ _ ' _
_ _ _ _ #
_ _ _ #

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Then, you create a modifier that applies a lumpsum surcharge for a range of 1-999999999
using the surcharge formula.
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Setup steps
1. Create inventory items for each pricing scenario. In this example,
we have created L53-PRORATE, L53-SURCHARGE, and
L53-SVCCREDIT.
2. Assign these items to the org(s) desired.
Setup for the prorated item
3. Create a pricing formula for the proration. In this example, we have
created L53-Monthly Proration.
4. Enter NVL (1, 2) in the Formula field on the formula header.
5. Create one formula line with a Formula Type of Function.
GET CUSTOM PRICE is automatically populated into the Component
field and cannot be changed.
6. Enter 1 in the step field.
7. Create a second formula line with a Formula Type of Numeric
Constant, a Component of 0, and a Step of 2.


8. Save the record.
9. Navigate to Help>Diagnostics>Examine and enter the
password APPS.
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10. Search for the PRICING_FORMULA_ID attribute and note the formula
id.
11. Close the Pricing Formulas form and navigate to the Price Lists
window.
12. Add the L53-PRORATE item to a price list.
13.
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14. Enter a list price. In our example we used $2000.
3.
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Surcharge item setup
14. In the Dynamic Formula field, enter the name of the formula you
just created, L53-Monthly Proration in our example
15. Create a pricing formula for the surcharge item. In this example, we
have created 20% of Order.
16. Enter 2 * NVL(1, 3) in the Formula field on the formula header.
17. Create one formula line with a Formula Type of Function.
GET CUSTOM PRICE is automatically populated into the Component
field and cannot be changed.
18. Enter 1 in the step field.
19. Create a second formula line with a Formula Type of Numeric
Constant, a Component of .2, and a Step of 2.
20. Create a third formula line with a Formula Type of Numeric
Constant, a Component of 0, and a Step of 3.
21. Save the record.
22. Navigate to Help>Diagnostics>Examine and enter the
password APPS.
23. Search for the PRICING_FORMULA_ID attribute and note the formula
id.
Close the Pricing Formulas form and navigate to the Price Lists
window.
24. Add the L53-SURCHARGE item to a price list.
25. Enter a list price. In our example we used $0.
26. In the Dynamic Formula field, enter the name of the formula you
just created, 20% of Order in our example.
Service credit refund item setup
27. Create a pricing formula for the service credit. In this example, we
have created
JLS-Service Credit.
28. NVL ( 1, 2 ) in the Formula field on the formula header.
29. Create one formula line with a Formula Type of Function.
GET CUSTOM PRICE is automatically populated into the Component
field and cannot be changed.
30. Enter 1 in the step field.
31. Create a second formula line with a Formula Type of Numeric
Constant, a Component of 0, and a Step of 2.
Save the record.
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32. Navigate to Help>Diagnostics>Examine and enter the
password APPS.
33. Search for the PRICING_FORMULA_ID attribute and note the formula
id.
Close the Pricing Formulas form and navigate to the Price Lists
window.
34. Add the L53-SVCCREDIT item to a price list. Use Price Break
Header as the line type.
35. Click the Price Breaks button and enter price breaks according to
the following table:
From To Price
0 75 10
75 200 12
201 350 13
351 999999999 14
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37. Close the Price Lists form.
38. Open the Define Modifiers form.
39. Create a new modifier of type Discount List. In our example, we
called it JLS-07.
40. Create a modifier line and set these values in the Modifiers
Summary tab.
Level Modifier Type Pricing Phase Break Type From To
Line+ Surcharge List Line Adjustment Point 1 9999999999
41. Enter these values in the Discounts/ Charges tab.
Formula Application Method
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JLS-Service Credit Lumpsum
42. Save your work.
43. Modify the PL/ SQL package provided here by setting the formula and item constants.
44. Set the formula contants for C_surcharge_formula, C_prorate_formula,
C_service_credit_formula to the values you obtained when setting up the formulae
45. Set the item contants for C_surcharge_item_id, C_subscription_item_id.
Note that you can use either the item_id or item_description.
46. Create function QP_CUSTOM.Get_Custom_Price by compiling the PL/ SQL code that you
have modified Make sure that your extension code written in get_custom_price is tuned
for optimal performance. Otherwise, the Advanced Pricing engine performance will be
negatively impacted.

47. Set the value of the profile option QP: Get CustomPriceCustomized.at the site level. If you have
setup a formula to use the function but havent setup the profile then a runtime error will be
displayed.

48. After the code compiles successfully, test your setup by creating a sales order. Make sure you
add the surcharge item after you've added another item to have a sales order amount to
discount.
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Oracle Advanced Pricing:
Get_Custom_Price
Code Example
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WARNI NG: Your Get _cust om_pr i ce r out i ne shoul d not i ssue any dat abase commi t .
I ssui ng a commi t wi l l cor r upt t he Tr ansact i on dat a as wel l as Pr i ci ng dat a.
CREATE CREATE OR REPLACE PACKAGE BODY QP_CUSTOM AS
FUNCTION Get_Custom_Price (p_price_formula_id IN NUMBER,
p_list_price IN NUMBER,
p_price_effective_date IN DATE,
p_req_line_attrs_tbl IN QP_FORMULA_PRICE_CALC_PVT.REQ_LINE_ATTRS_TBL)
RETURN NUMBER IS
l_number_of_days_left NUMBER; -- number of days left in month
l_number_of_days NUMBER; -- number of days in month
l_prorated_price NUMBER (9,2); -- final prorated price
l_todays_date NUMBER; -- today's date day
l_order_price NUMBER (9,2); -- total order selling price
l_header_id NUMBER; -- order header id
l_line_id NUMBER; -- order line id
l_line_quantity NUMBER; -- selling quantity
l_list_price NUMBER; -- line item list price
l_last_month_volume NUMBER; -- last month's sales volume for current customer
l_selling_price NUMBER; -- line price after discounts applied
l_line_list_price NUMBER; -- total line list price
l_refund_amount NUMBER; -- refund for service credit formula
l_surcharge NUMBER; -- surcharge for surcharge formula
-- formula constants identify which formula is being invoked
-- according to formula_id
C_surcharge_formula CONSTANT INTEGER := 6026; -- surcharge formula ID
C_prorate_formula CONSTANT INTEGER := 6069; -- proration formula ID
C_service_credit_formula CONSTANT INTEGER := 6177; -- service credit formula ID
-- The surcharge formula needs to know the inventory item id of the surcharge
-- item so it doesn't use that item's price in the total order amount
-- calculation. The service credit formula needs to know the item
-- or items to count when determining prior month subscription charges.
-- In this case, it's an item but it could be a group of items or a category
C_surcharge_item_id CONSTANT INTEGER := 4534; -- surcharge item ID
Oracle Advanced Pricing:
Get_Custom_Price
Code Example
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C_subscription_item_id CONSTANT VARCHAR2(200) := 'L53-SUBSCRIPTION'
BEGIN
-------------------------------------------------------------------
-- Service credit refund formula
-------------------------------------------------------------------
IF p_price_formula_id = C_service_credit_formula THEN
-- use the oe_order_pub API to get header and line information
l_line_id := oe_order_pub.G_LINE.line_id;
l_line_quantity := oe_order_pub.G_LINE.ordered_quantity;
l_list_price := oe_order_pub.G_LINE.unit_list_price;
l_selling_price := oe_order_pub.G_LINE.unit_selling_price; -- after modifier applied
-- the following statement determines the total amount of item L53-SUBSCRIPTION
-- ordered during the current month for the current customer. It only looks
-- at booked orders.
SELECT sum ( oola.ordered_quantity * oola.unit_selling_price )
INTO l_last_month_volume
FROM oe_order_lines_all oola,
oe_order_headers_all ooha
WHERE oola.sold_to_org_id = oe_order_pub.G_LINE.sold_to_org_id
AND
oola.ordered_item = C_subscription_item_id
AND
ooha.header_id = oola.header_id
AND
ooha.booked_flag = 'Y';
-- l_last_month_volume := 10000; -- for testing purposes
-- get the number of days in the current month for the refund formula
SELECT TO_NUMBER (TO_CHAR (LAST_DAY(SYSDATE), 'DD' ))
INTO l_number_of_days
FROM sys.dual;
Oracle Advanced Pricing:
Get_Custom_Price
Code Example
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-- because of the price-break component of this formula, we need to first get the list price
-- of the refund item. This is the price break header price. In other words, the price break
-- is set up on the price list, not in a modifier
l_line_list_price := l_line_quantity * l_list_price;
-- now we apply the formula to determine the total refund amount based on this month's volume
l_refund_amount := ( l_line_list_price / l_number_of_days ) * l_last_month_volume;
-- because this formula is approved through a surcharge modifier, we now need to subtract the
-- list price from the refund amount to get the surcharge. When this surcharge is added back
-- to the list price, the refund amount is correct.
l_surcharge := (l_refund_amount - l_line_list_price) * -1 ;
-- the following is to insert values into a table
-- for debugging purposes
--
-- insert into jls_Test
-- values ('QTY: ' || l_line_quantity || ' list: ' || l_list_price || ' selling: ' || l_selling_price
-- || ' days: ' || l_number_of_days || ' line: ' || l_line_list_price || ' refund: '
-- || l_refund_amount || ' surcharge: ' || l_surcharge || 'last month: ' || l_last_month_volume
-- || ' line id: ' || l_line_id );
-- commit;
RETURN l_surcharge;
END IF;
-------------------------------------------------------------------
-- Proration formula
-------------------------------------------------------------------
IF p_price_formula_id = C_prorate_formula THEN
-- get the last day of the month and the current day of the month
SELECT TO_NUMBER (TO_CHAR (LAST_DAY(SYSDATE), 'DD' )),
Oracle Advanced Pricing:
Get_Custom_Price
Code Example
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TO_NUMBER (TO_CHAR (SYSDATE, 'DD' ))
INTO l_number_of_days,
l_todays_date
FROM sys.dual;
l_number_of_days_left := l_number_of_days - l_todays_date;
-- apply the formula using the list price passed into this function
l_prorated_price := (p_list_price / l_number_of_days) * l_number_of_days_left;
RETURN l_prorated_price;
END IF;
IF p_price_formula_id = C_surcharge_formula THEN
l_line_id := oe_order_pub.G_LINE.line_id; -- get current line
SELECT oola.header_id -- get the header id for the order
INTO l_header_id
FROM oe_order_lines_all oola
WHERE oola.line_id = l_line_id;
-- sum the selling price of all lines except for the surcharge line
-- in the current order
SELECT SUM(oola.ordered_quantity * oola.unit_selling_price)
INTO l_order_price
FROM oe_order_lines_all oola
WHERE oola.header_id = l_header_id
AND oola.inventory_item_id != C_surcharge_item_id;
IF l_order_price IS NULL THEN
l_order_price := NULL;
END IF;
RETURN l_order_price;
END IF;
END GET_CUSTOM_PRICE;
Oracle Advanced Pricing:
Get_Custom_Price
Code Example
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END QP_CUSTOM;
Oracle 11i Advanced Pricing
Dont Customize. Extend!
May 2001
Author: Joshua Saffren
Oracle Corporation
World Headquarters
500 Oracle Parkway
Redwood Shores, CA 94065
U.S.A.
Worldwide Inquiries:
Phone: +1.650.506.7000
Fax: +1.650.506.7200
Web: www.oracle.com
This document is provided for informational purposes
only and the information herein is subject to change
without notice. Please report any errors herein to
Oracle Corporation. Oracle Corporation does not
provide any warranties covering and specifically
disclaims any liability in connection with this document.
Oracle is a registered trademark, and Oracle Order Management is (are) a
trademark(s) or registered trademark(s) of Oracle corporation.
All other names may be trademarks of their respective owners.
Copyright Oracle Corporation 2001
All Rights Reserved