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E Sourcing 7.0: Formula Pricing and Line Item Formula

Former Member
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Hi

I am currently working on e sourcing 7.0. Here there are new features provided in Rfx->Line Item setup called Formula Prcing and Line Item Formula

I was trying to use Line Item Formula feature to provide pricing formula for line items.I chose pricing structure as Formula Prcing and tried to advance the phase of Rfx, System gave an error that I need to create unit price formula if I choose Formula Pricing.But once I create unit price formula it makes the Line Item Formula redundant.

Moreover the problem with unit price formula is Unit Price field is only available with Line Item Formula.It doesnot allow me to create an effective unit price formula beacuse of limitations of field at exposure.

Has anybody used this feature? Kindly help me understand

Regards

Shobha

Edited by: Shobha M Narayanaswamy on Aug 12, 2011 11:02 AM

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Answers (1)

Answers (1)

Former Member
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Hello SHobha,

you can use as many line item formulas within a RFx as you like (assuming that 'Enable Formulas' is checked at the Rfx doc type) independent of the pricing structure. In case you select the structure 'Formula Pricing' you have to create a (RFx) Bid Unit Price Formula, in case you have multiple line item groups you could also create several formulas and assign which one which be used for which item group at the line item setup. Please note that with Formula pricing you are restricted to a single Incoterm (might be not a big deal).

There is also a weblog about formula pricing at /people/mahesh.jeswani/blog/2010/09/21/complex-pricing-using-formula-based-pricing-in-rfx-or-auction-in-sap-sourcing

best regards

Markus

Former Member
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Hi Markus

Thanks for your reply!

I have tried to use line item formulas but it is not working for me. Following are the steps I followed:

1. I created Line Item Group with two line item/ materials.

2. I went to Line Item Setup and created supplier entered attributes lets say freight of Type Price

3. In Pricing Model I kept the pricing structure as Unit Price

4. In Line Item Formula I created a formula lets say (UnitPrice(IncoTerm1)+Freight)*Quantity

5. In Line Item Assignment, I assigned the formula to line item group

Here even when supplier provide value to freight, it is not reflected in the supplier response. for e.g. lets say supplier supplied values are

Unit Price=10 Eur

Freight = 1 Eur

Quantity = =10

Instead os system showing 110 Eur it is showing 100.. Is there something I am missing. Kindly advice

Regards

Shobha

Edited by: Shobha M Narayanaswamy on Aug 18, 2011 1:05 PM

Former Member
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Hi

Any ideas on how to resolve the issue?

Regards

Shobha

Former Member
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Hi Shobha,

I tried your scenario and I think what you need to do is to set pricing structure In Pricing Model as "Formula Pricing".

1. I created Line Item Group with two line item/ materials.

*>>MP - I did the same*

2. I went to Line Item Setup and created supplier entered attributes lets say freight of Type Price.

*>> MP - In addition, I created a supplier entered attribute called "Unit Price"*

3. In Pricing Model I kept the pricing structure as Unit Price

*>> MP - I kept the pricing model as "Formula Pricing" and added your formula under "Unit Price Formulas"*

4. In Line Item Formula I created a formula lets say (UnitPrice(IncoTerm1)+Freight)*Quantity

>> MP - this is not needed if you want to see the total cost have the freight included

5. In Line Item Assignment, I assigned the formula to line item group

*>> MP - I assigned my new formula under "Bid Unit Price Formula Assignment"*

I think the main thing is, the system will not calculate formulas unless you set the pricing structure to "Formula Pricing". You can even see the screenshots in the blog provided by Markus that the formulae are visible under "Basic View" and not "Formula View" on Line Items.

Thanks,

MP

Edited by: MP1234 on Sep 8, 2011 3:50 PM

Former Member
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Hi MP

Thanks for your reply!

Like I said the issue with selecting Formula Price is that I am not able to make use of the components: Target Price, Current Price and Unit Price available in field Standard Fields - Price Fields: (you can see this field on the first screen shot in the blog) .

It seems this field is only available when one create a formula in Line Item Formula tab and not when one do the same in Pricing Model tab. Are you able to make use of this field while creating a formula in Pricing Model-> Unit Price Formula-> Add Formula ? Kindly let me know.

Regards

Shobha

Former Member
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Hi Shobha,

I hope members who have used this feature chime in. I am only playing with Formula Pricing because we are evaluating these as well.

I was not able to use the standard fields when using Formula Pricing.

I am retracting what I said in the last post, apologies, I made a mistake in the supplier response.

From what I understand now:

If you want to have sub components of the unit price (or more important, any other calculations for unit price), you should choose "Formula Pricing" under Pricing Structure. E.g., my company asks for supplier's manufacturing costs, their purchased parts cost etc all of which contribute to make up the unit price. In this example, I created Supplier Entered Attributes for Manufacturing Cost and Purchased Parts Cost and added a Unit Price formula which was the sum of both. In addition, I created a Supplier Entered Attribute for "Freight Cost" which is not really a part of the unit price, but is an additional cost. In Line Item Formulas, I added 2 formulae, just for example.

Total Freight Cost = Quantity * Freight Cost (Supplier Entered Attribute)

Total Calculated Cost = Total Freight Cost + (UnitPrice(IncoTerm) * Quantity)

Part 1 - Quantity = 10, Manufacturing Cost = 5, Purchased Part Cost = 5, Freight = 3

Part 2 - Quantity = 10, Manufacturing Cost = 6, Purchased Part Cost = 6, Freight = 3

System correctly calculated

Part 1 Unit Price = 10

Part 1 Unit Price = 12

Part 1 Total Freight Cost = 10 * 3 = 30

Part 2 Total Freight Cost = 10 * 3 = 30

Sum=60

Part 1 Total Calculated Cost = 30 + (10*10) = 130

Part 2 Total Calculated Cost = 30 + (10*12) = 150

Sum = 280

If you do not need the sub-components of the Unit Price, we can leave the pricing structure at Unit Price. I did that for an RFX, and also added the same 2 formulae in Line Item Formulas as above. This worked fine for me.

Part 1 - Quantity = 10, Unit Price = 3, Freight = 5

Part 2 - Quantity = 10, Unit Price = 3, Freight = 5

System correctly calculated:

Part 1 Total Freight Cost = 10 * 5 = 50

Part 2 Total Freight Cost = 10 * 5 = 50

Sum=100

Part 1 Total Calculated Cost = 50 + (10*3) = 80

Part 2 Total Calculated Cost = 50 + (10*3) = 80

Sum = 160

Both the above scenarios work fine for me.

The only open item is, I could not find a way to get these added to the Total Cost and Total Price listed on the "RFX Responses tab". I don't think it is possible to do that. I think you have to view these in the "Formula View" of the respective supplier proposal.

Let me know if this helps.

Thanks,

MP

Former Member
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Hi Shobha,

I have a similar requirement here.

I have defined a line item formula (say F1) , the result of which I want to be associated with Current Price field.F1 is successfully validated.

So when I redefine the formula as CurrentPrice(IncoTerm1)==F1, the system throws an error on validation - incorrect formula type. I see both the sides will give me value in Price type. It seems if I put anything in terms of ==, it throws an error

Any insights on how to tackle the above?

Regards,

Tripti