Oracle Pricing API

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Oracle 11i Advanced PricingDont Customize, Extend!

A n Oracle Technical White Paper

May 2001


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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 InfrastructureProvider in the Silicon Valley. This company sells nothing but services, such as email servertime and space, web hosting, e-commerce processing, etc. We felt Advanced Pricing was aperfect 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 implementedusing the standard Advanced Pricing functionality and theGet_Custom_Pricepublic API.

The purpose of this white paper is to describe how our team was able to quickly and easilyconform Advanced Pricing to meet these demanding requirements using this API, which is oneof its key extensibility features.

Using APIs to Extend Advanced Pricing

It is important for everyone implementing Advanced Pricing including Customers, SalesConsultants, and Implementation Consultants, to understand that the use ofGet_Custom_Price is anextensionand not acustomizationbecause this is a public, supportedAPI.

It is well understood that customizations are fraught with problems. Oracle recommends thatcustomers avoiding customizations wherever possible. However, using the extensiblity APIsof Advanced pricing lets you extend the functionality of the product while avoiding thedownsides of customization. The data structure underlying Advanced Pricing may changeover time, but the mechanics ofGet_Custom_Pricewill not (or will be migrated if theydo). In other words, if you keep all your custom code in this function, you're playing by therules.

In many competitor systems, providing the kind of functionality this customer required wouldhave required an extensive, invasive customization. But with the extensibility features likeGet_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 themonth.

A special surcharge item. Every sales order has, as its last item, a fee equal to 20% of the amountof a specific group of items on a sales order.

A service refund credit item. The amount refunded on a monthly basis to a customer of ourprospect is based on a number of arbitrary "service credit" units. These service credit units arethen used in a formula which takes into account, among other things, the amount spent on aspecific group of services the prior month.

Quick Overview of Using Get_Custom_Price

We decided to use theGet_Custom_PriceAPI with a formula to implement thesescenarios. (Although it is possible to model a 20% surcharge on an order without the use ofthe 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 useGet_Custom_Price, you define a formula in Oracle Advanced Pricing and source aformula line as a Function. After you save your formula, use Help>Diagnostics>Examineto get the formula_id attribute value. You will use this value inGet_Custom_Price todetermine which block of code to execute for which formula.

Get_Custom_Price is a public function packageQP_CUSTOM seeded as part of the QPinstallation. In fact, the install creates only a package header. It is up to you to create thepackage body function calledGet_Custom_Price. This procedure has the following headerdeclaration:

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, likeformula_id andlist_price. You can use thereferenced 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 thefunction, 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 pricewhich 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 onApril 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 currentmonth according to the sysdate global variable. The statementTO_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:


-- 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 formulathat callsGet_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 isdynamically derived based solely on properties of the current order. One formula componentreturns the selling price of the current order and other formula component is used to determinethe percentage discount.

In order to determine the order total, we use one SQL statement to determine the header_id ofthe the parent header record of this line. Then we use another SQL statement to sum theselling price of all lines on the order except the surcharge item. (Counting the surcharge itemwould 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 wherep_price_formula_id is the formuld_id passed into theGet_Custom_Price calloe_order_pub.G_LINE.line_id retrieves the line_id for the current order line callingGet_Custom_Price,C_surcharge_item_id is the inventory_item_id value for the surcharge item you set up inthe 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


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 monetaryamount to be refunded for services outages. This amount is based upon a tiered schedule ofservice 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 monthbecause the customer we set up in our demo system had no previous month's history.Assuming the only subscription item is an item calledL53-SUBSCRIPTION, the following SQLscript retrieves the total amount ofL53-SUBSCRIPTION order lines for the current month thatare 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 grouptogether items to be counted for the prior month subscription charges. In this case, you wouldreferenceinventory_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 onthe 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 fromGet_Custom_Price because thisamount 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 itemas a price break header on the price list to define the tiered ranges (range breaks).

feesonsubscriptismonthpreviousmonthindaysof

unitsrefundof __'_____#

___#


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Then, you create a modifier that applies a lumpsum surcharge for a range of 1-999999999using the surcharge formula.


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Setup steps

1. Create inventory items for each pricing scenario. In this example,we have createdL53-PRORATE, L53-SURCHARGE, andL53-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 havecreatedL53-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 Componentfield and cannot be changed.6. Enter 1 in the step field.

7. Create a second formula line with a Formula Type ofNumericConstant, a Component of0, and a Step of2.

8. Save the record.9. Navigate to Help>Diagnostics>Examine and enter thepasswordAPPS.


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10. Search for thePRICING_FORMULA_ID attribute and note the formulaid.

11. Close the Pricing Formulas form and navigate to the Price Listswindow.

12. Add theL53-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 youjust created, L53-Monthly Proration in our example

15. Create a pricing formula for the surcharge item. In this example, we

have created20% 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 ofFunction.GET CUSTOM PRICE is automatically populated into the Componentfield and cannot be changed.18. Enter 1 in the step field.19. Create a second formula line with a Formula Type ofNumericConstant, a Component of .2, and a Step of 2.20. Create a third formula line with a Formula Type ofNumericConstant, a Component of0, and a Step of3.21. Save the record.

22. Navigate to Help>Diagnostics>Examine and enter thepasswordAPPS.23. Search for thePRICING_FORMULA_ID attribute and note the formulaid.Close the Pricing Formulas form and navigate to the Price Listswindow.24. Add theL53-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 youjust created, 20% of Order in our example.

Service credit refund item setup

27. Create a pricing formula for the service credit. In this example, wehave createdJLS-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 Componentfield 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 of0, and a Step of2.Save the record.


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32. Navigate to Help>Diagnostics>Examine and enter thepasswordAPPS.

33. Search for thePRICING_FORMULA_ID attribute and note the formulaid.Close the Pricing Formulas form and navigate to the Price Listswindow.

34. Add theL53-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, wecalled it JLS-07.

40. Create a modifier line and set these values in the ModifiersSummary tab.

Level Modifier Type Pricing Phase Break Type From ToLine+ 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 formulae45. 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 functionQP_CUSTOM.Get_Custom_Price by compiling the PL/SQL code that you

have modified Make sure that your extension code written inget_custom_price is tunedfor optimal performance. Otherwise, the Advanced Pricing engine performance will benegatively impacted.

47. Set the value of the profile optionQP: Get Custom Price Customized.at the site level.If you havesetup a formula to use the function but havent setup the profile then a runtime error will bedisplayed.

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 todiscount.


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Oracle Advanced Pricing:Get_Custom_Price

Code Example

Oracle Corp 2001 All Rights Reserved Oracle Advanced Pricing: Extend Dont Customize 5/16/01 9:51 AM Page 1

WARNI NG: Yo u r Ge t _ c u s t om_p r i c e r o u t i n e s h ou l d n ot i s s u e a ny d a t a b as e c ommi t .

I s s ui n g a co mmi t wi l l c or r u pt t h e Tr a ns ac t i o n d at a as we l l a s Pr i c i n g d at 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


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Code Example


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_idAND

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;


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Code Example


-- 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 volumel_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

-------------------------------------------------------------------


-- get the last day of the month and the current day of the month

SELECT TO_NUMBER (TO_CHAR (LAST_DAY(SYSDATE), 'DD' )),


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Code Example


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 functionl_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


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


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;


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Code Example


END QP_CUSTOM;


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Oracle 11i Advanced Pricing

Dont Customize. Extend!

May 2001Author: 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

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