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Price Adjustment Clause functionality

Hi Experts,

Could you please tell me in what scenarios price adjustment clause functionality is used and how (with example).

Regards,

Raju Kumar

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  • Best Answer
    Posted on Aug 16, 2016 at 08:33 AM

    Hi Raju,

    One of the scenario where Price Adjustment Clause can be used is to handle the leap year in the billing period, for e.g. you just maintain the factor (365/366) to which the price determined will be multiplied with.

    See the explanation with example below:

    Say you have to bill the standing charge for the customer for a year (ideally 365 days) £50, this is configured as time-dependent price. Now the bill period is for a leap year which has 366 days, so now we have to adjust the price and this can be achieved by Price Adjustment Clause where you maintain the adj factor as shown in the screen below:

    When the billing period covers a leap year then the factor 0.9972677 will be multiplied with the base price and used for billing and then for non-leap year it will be 1.

    Hope this helps! :-)

    Thanks,

    Srini


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    • Hi Raju,

      No, price adj factor should be what I have mentioned, see explanation below:

      Say Business rule is: price is 0.1p per day for an year

      This is applicable for both leap year and non-leap year, if you don't maintain price adj clause then you will end up with charging more to the customer.

      Billed DaysPrice per day for a yearFactor3650.10.997267763660.1002739730.1(366*0.1)/365365/366

      In the above example for 365 days average per day charge is 0.1 (if the price is 0.1)

      Then if the year is leap year i.e. for 366 days, the price should resolve to 0.1 only and NOT 0.100273972 - to achieve this we just multiply this with the factor 0.99726776 to get price as 0.1

      Other scenario where we use Price Adj Clause is that when we want to add a small amount to the base price i.e. while maintaining the Price Adj Clause we have another column to maintain the amount to be added (column: Added Price) even there we have flexibility to set the priority to add first and then multiply (check box: addition first)

      Hope this is enough to match with what you require.

      Thanks,

      Srini

  • Posted on Aug 22, 2016 at 10:35 AM

    Hi Raju,

    One of the scenario Srinivasan told you.

    Another could be -

    In India electricity we generates using coal, and what happens is coal prices fluctuates (some times up & some time goes down) and utility companies also have to update their prices accordingly.

    Now updating all the price key takes hell lot of time . So another way of doing the same is we create price adj clause (one for one billing class) and what ever fluctuation comes we do that in price adjustment clause object.

    regards

    Manoj

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