IBS Enterprise Help Centre 8.0Business Suite 2014/2015

Setting up Item Classification pricing

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What this document contains:

Via the Item Classification functionality you can define standard purchase and sales prices to be applied upon any item grouped within the applicable grouping structure (i.e. Item classification definition). In addition, it allows you to use characteristics and items to define pricing exceptions where, depending on the entered criteria, items might receive a different base purchase/sales price than the one defined as the standard for any item belonging to the applicable grouping structure. For example:

  • COLOR = GOLD -> Raise price with 0.5 GBP
  • GLOSSLVL > 50% -> Raise price with another 0.2 GBP
  • Item = DV5010 -> Use fixed price of 25 GBP

Note: Note: The CLA-COPR (Classification costing/pricing) function must be activated together with the CLA-ITEM (Item classification) function in the Function control file, to be able to define purchase and sales prices on the item classification definition level and download these prices to the item level AFTER item creation from the applicable item classification definition. This is because the pricing routine requires the item to be completely created before any pricing calculation can be applied.

The following can be defined and downloaded:

  • SPP (Standard purchase price calculated for item with regard to purchase price exceptions)
  • SPP_G (Standard purchase price (no exceptions))
  • SC (Standard cost calculated for the item with regard to item’s landed cost and SPP)
  • SCS (Standard cost for sales calculated for item based on SC)
  • SSP (Standard sales price)

The standard sales prices, which are attached to sales price lists, are calculated via formulas (either preloaded system formulas or you can define your own). You can create multiple prices lists driven by validity periods. Quantity dependent prices can also be defined on the SSP group header, characteristic exceptions or item exceptions.

When the set up is complete you have several download/update alternatives available for loading the prices into the Item file. See SPP download and SSP download below. Once downloaded, the prices are displayed as any pricing set up in IBS Enterprise.

A simulation is available to view the prices before downloading the information into the Item file.

Formulas for calculating price information

The system comes preloaded with the following pre-defined, pricing-related system formulas, which you can attach directly in the Work with item classification, Standard sales price panel, or build your formula string as required in the Work with item classification formulas program and then attach the manually constructed formula to the applicable SSP group in the above mentioned panel.

Pricing-related system formulas:

SPP Standard purchase price calculated for item with regard to purchase price exceptions
SPP_G Standard purchase price (no exceptions)
SC Standard cost calculated for item with regard to item landed cost and SPP
SCS Standard cost for sales calculated for item based on SC
SSP Standard sales price
VAL1 Input value 1

Per manually defined formula you select/combine pricing-related formula elements to build your formula string (up to 256 characters are available). These formula elements can be based on a combination of the following:

  • Pricing-related values that are held within {} brackets. See Pricing formula elements below for more information.
  • Numeric constants
  • Basic operators (* + - /)
  • Rounding/Grouping operators which can be used to group operations within a formula and at the same time round the result of that operation to a specific number of decimals (0-9 decimals are allowed). See Rounding/Grouping operators for formulas in Item Classification for more information.

Note: There are no rules that govern the entry. You can enter whatever you want and what you enter is what you get. See Pricing formula example for an example of how you can construct a formula.

Pricing formula elements

The following elements are valid in a manually defined pricing formula.

ElementDescription
{SC1} Standard cost calculated for item with regard to landed cost and standard purchase price
{SCS} Standard cost for sales calculated for item based on standard cost
{SPP_G} Standard purchase price value defined for item classification profile 1/item classification profile 2 (general)
{SPP} Standard purchase price calculated for item with regard to purchase price exceptions
{SSP} Standard sales price calculated for item with regard to sales price exceptions
{VAL1} Input value 1
{VAL2} Input value 2
{VAL3} Input value 3

Pricing formula example

The following illustrates a formula to calculate an uplift on the standard SSP for a characteristic exception.

In the Work with Item classification formulas file the following formula was manually created:

{SSP} * (1 + ({VAL1}/100)R6)R6


Since Input Value 1 is needed in this formula, you have to enter the Input value 1 desc = Enter % Uplift.

When defining the applicable characteristic exception in the Work with Item Classification Definition, SSP, Characteristics exceptions, details panel you enter the line number and the formula code (SSP+Uplift) and click OK. The description for Input value 1 (Enter % uplift) will then appear where you enter the numeric value. This uplift will be applied on the standard sales price.

Standard Purchase Price (SPP) set-up

The following depicts a standard set-up sequence for Standard purchase prices.

File/Table M / O To do
Function control file Mandatory Activate the following function:

CLA-COPR (Classification costing/pricing): If you want to be able to predefine purchase prices for the items under item classification you must activate this function. Prices are generated and applied AFTER item creation from the applicable item classification definition. This is because the pricing routine requires the item to be completely created before any pricing calculation can be applied.
Item file Mandatory The items must have been generated via the Item classification functionality and all mandatory fields on all panels for any active IBS Enterprise application must have been completed.
DIS control file Optional Complete the following control fields:

Aut stand pur price (Automatic update of standard purchase price): Set this flag to YES if you want the cost prices (Standard cost of sales) to be updated automatically in the Item file (Inventory information and Warehouse panels) for today's period when purchase prices are downloaded from Item Classification. If this flag is set to YES, the latest cost prices can be updated automatically during the daily batch run (i.e. Update actual purchase price along with Refresh landed costs). This is because cost prices are not updated per period as purchase prices are and the costs must be based on today’s SPP. This can be done regardless if the Item classification costing/pricing is active or not.

Margin cost basis: Set this flag to 5 (Standard cost sales) if you want that cost to be used as the basis to calculate the profit margin at Sales order line entry, Quotation line entry, Sales order profit enquiry and Sales quotation profit enquiry.

Cost per warehouse: Set this flag to YES if you have more than one warehouse in which you store goods and you want to more accurately identify how much it costs to supply each warehouse with goods. It is typically be used when landed costs are attached to Purchase orders and/or Internal replenishment orders. When the SPP prices are downloaded, the costs on Item file, Warehouse panel level will be updated. You can also manually trigger an update of these costs via the Item file, Warehouse panel.
Work with characteristics Mandatory If you plan on defining any pricing exceptions based on characteristics for any SPP price, make sure the Field type for the characteristic is set to numeric.
Work with event types Optional All changes to an existing active record will trigger an update of purchase and cost prices on item level. You can configure the system to send an alert, using IBS Alert Management, to inform the applicable person that purchase prices/cost prices have been changed and there might be a need to download purchase prices. The following Alerts can be activated for this purpose: ICLDEFNCHG (Item classification definition change) and ICLDEFNSPP (SPP or SCS mark-up changed). You must activate them and assign the applicable person as receiver. See Configure the system to send/receive alert messages for instructions.
Work with item classification definition Mandatory This is where you set up your Standard purchase price (SPP) data and activate the pricing to be able to download the information into the Item file. For each applicable Item classification definition select the Standard purchase prices option.

Add a new record and define the following mandatory information.
  • Supplier for which the price applies
  • From date (start date of the pricing period. The To date is calculated automatically)
  • Classification unit (the standard purchase price unit)
  • Price (the standard purchase price)
  • Currency (the standard purchase price currency). The price will be created/downloaded in two different currencies if this currency differs from the supplier’s primary currency.
The following field relates to the validation of any characteristic exceptions if you plan on defining these type of pricing exceptions:
  • Combined rules: The default value for this field is YES for new records. If you set this field to NO, an integrity check (validation) must be performed to ensure that the item connected to the SPP price group (for the Item classification definition is only connected to one characteristic exception set-up. This field is protected if the SPP record is active or it the record is inactive and characteristic exceptions for the SPP group exist. See Combined rules flag for characteristic exceptions in Item Classification pricing for more information.
The following fields relate to the standard cost for sales calculation Complete if you want the system to calculate this cost and eventually download it to the items attached to Item classification definition:
  • SCS operator: The operator together with the SCS price factor is used to calculate standard cost for sales. Enter the operator for this price group (+, -, / or %).
  • SCS price factor: The price factor together with SCS operator is used to calculate the standard cost for sales. Enter the SCS price factor (in system currency) for this price group.
Characteristic and/or Item exceptions:

If you want the item(s) to receive a different base purchase price than the one defined as standard you can define the pricing exceptions per characteristic and/or item. Note: Item exceptions take precedence if both are defined.

Characteristic exceptions: Select this option and add a new record defining the line number, operator and price factor. Update and then select the Criteria option to define the details for the characteristic exception (the characteristic, its value and operator).

Example of characteristic exception: If you wanted to add 10 to the price for any item that has the characteristic SHEETPERBOX (with value 2500) attached, you would define the following:

Characteristic: SHEETPERBOX (on Criteria panel)
Operator: = (on Criteria panel)
Value: 2500 (on Criteria panel)
Price operator (on Characteristic exception panel): +
Price factor (on Characteristic exception panel): 10

The result would be that the price factor of 10 should be added (+) to the base price IF the characteristic SHEETPERBOX for the item is equal to (=) the value 2500.

Item exceptions: Select this option and add a new record defining the item that will receive the pricing exception, the operator and the price factor.

Activate the SPP group:

When all information has been defined you need to activate the SPP group to be able to download the pricing information. Select the Change option for the applicable SPP group and change the Active flag to YES.

Standard Sales Price (SSP) set-up

The following depicts a standard set-up sequence for Standard sales prices.

File/TableM / OTo do
Function control file Mandatory Activate the following function:

CLA-COPR (Classification costing/pricing): If you want to be able to predefine sales prices for the items under item classification you must activate this function. Prices are generated and applied AFTER item creation from the applicable item classification definition. This is because the pricing routine requires the item to be completely created before any pricing calculation can be applied.
Item file Mandatory The items must have been generated via the Item classification functionality and all mandatory fields on all panels for any active IBS Enterprise application must have been completed.
DIS control file Optional The Short term pricing flag controls the optional validity period handling for SSP prices.

If this flag is set to YES, you will be able to enter a period that overlaps already existing periods but the new period must start with another date. The Sales price is then retrieved from the period with the starting date nearest to the current/selected date.

If this flag is set to NO, you will not able to enter a period that overlaps some of the already entered periods. Existing periods must be changed before the new one is entered.
Work with characteristics Mandatory If you plan on defining any pricing exceptions based on characteristics for any SSP price, make sure the Field type for the characteristic is set to numeric.
Work with item classification formulas Optional IBS Enterprise comes preloaded with system formulas for pricing calculation in SSP (standard sales prices). If you want to manually create pricing-related formulas, define them here. The pricing formula is eventually connected to the Standard sales price header in the Work with classification definition file and for any characteristic pricing exceptions you deem necessary.
Work with event types Optional To be able to download prices, the SSP group must be activated. SSP changes are not allowed when the SSP group is active. Price value changes are, however, allowed for SPP groups connected to active SSP groups. If changes are made to the connecting SPP group, sales prices are not automatically recalculated. An alert can be configured in IBS Alert Management to inform that purchase prices/cost prices were changed and there might be a need to download sales prices. The following Alerts can be activated for this purpose: ICLDEFNCHG (Item classification definition change) and ICLDEFNSPP (SPP or SCS mark-up changed). You must activate them and assign the applicable person as receiver. See Configure the system to send/receive alert messages for instructions.
Work with item classification definition Mandatory This is where you set up your Standard sales price (SSP) data and activate the pricing to be able to download the information into the Item file. For each applicable Item classification definition select the Standard sales prices option.

Add a new record and define the following mandatory header information.
  • Price list into which the standard sales price will be updated.
  • Currency (the standard sales price currency)
  • Classification unit (the standard sales price unit)
  • Formula used to calculate the standard sales price.
If you want to have validity periods for the prices, define the following: (Note: The Short term pricing flag in the DIS control file controls the overlapping of periods. See above for information.)
  • From date (start date of the pricing period. The To date is calculated automatically)
The following field is mandatory if the formula used in the SSP calculation does not define the sales price as a fixed value. This is to ensure that the sales prices are updated based on the purchase prices (standard cost sales).
  • SPP/SCS group: Enter/select the supplier from the SPP/SCS group. When the standard purchase price group is changed and characteristic exceptions, item exceptions or quantity limit dependent prices are already linked to the SSP group, the batch process needs to be run to update all prices defined on exceptions and quantity limits. When downloading the sales price information the standard cost of sales information will also be retrieved from the SPP group and updated in the Item file (i.e. Inventory information and Warehouse panels)
The following field relates to the validation of any characteristic exceptions if you plan on defining these type of pricing exceptions:
  • Combined rules: This field is set to YES by default for new records. If you set this field to NO, an integrity check (validation) must be performed to ensure that the item connected to the SSP price group (for the Item classification definition) is only connected to one characteristic exception set-up. This field is protected if the SSP record is active or if the record is inactive and characteristic exceptions for the SPP group exist. See Combined rules flag for characteristic exceptions in Item Classification pricing for more information.
The following field is automatically updated:
  • Standard sales price for the SSP group
Characteristic and/or Item exceptions:

If you want the item(s) to receive a different base sales price than the one defined as standard you can define the pricing exceptions per characteristic and/or item. Note: Item exceptions take precedence if both are defined.

Characteristic exceptions: Select this option and add a new record defining the line number, formula used to calculate the pricing exception and any input values for any user-defined input value description defined in the formula. Update and then select option Criteria to define the details for the characteristic exception (the characteristic, its value and operator).

Item exceptions: Select this option and add a new record defining the item that will receive the pricing exception, the operator and the price factor.

Activate the SSP group:

When all information has been defined you need to activate the SSP group to be able to download the pricing information. Select the Change option for the applicable SSP group and change the Active flag to YES.

SPP download

Because the pricing routine requires the item to be completely created before any pricing calculation can be applied, you can download the Standard Purchase Prices (and any costs) AFTER item creation.

Manual trigger

The download of the standard purchase prices/cost prices can be manually triggered from the following locations. See Result after SPP download, below, for a description of what is updated.

File Panel Trigger point
Work with item classification definition Standard purchase prices – current The Item simulation/download function key. This will update the applicable purchase prices (and cost information if defined) for all items connected to the grouping structure of the item classification definition. See Result after SPP download below.
Work with items Purchase prices The Download prices option downloads the prices per supplier.

The Download prices function key downloads the prices for all suppliers applicable for the item.
Work with items Inventory information (drill down to the last panel)

Note: The download from this location is only available if the Cost per warehouse flag is set to NO and the Aut stand pur price flag is set to YES (both in the DIS control file).
The Update cost from purchase price function key downloads the standard purchase price information.
Work with items Warehouses (drill down to the last panel for the applicable warehouse).

Note: The download from this location is only available if the Cost per warehouse flag is set to YES and the Aut stand pur price flag is set to YES (both in the DIS control file).
The Upd cost from purchase price function key downloads the standard purchase price information for the warehouse.

Automatic trigger

The following would automatically trigger a download:

  • All changes to an existing active record will trigger the update of purchase and cost prices on item level. You can configure the system to send an alert, using IBS Alert Management, to inform the applicable person that purchase prices/cost prices have been changed and there might be a need to download purchase prices. The following Alerts can be activated for this purpose: ICLDEFNCHG (Item classification definition change) and ICLDEFNSPP (SPP or SCS mark-up changed). You must activate them and assign the applicable person as receiver. See Configure the system to send/receive alert messages for instructions.

Note: An Item simulation can be accessed in two different modes to either view the purchase and cost prices or also to download the prices. Prices must be confirmed before the download program will be called.

Automatic update of cost prices

Cost prices are updated automatically for today’s period when purchase prices are downloaded from the item classification if the Automatic update of standard purchase price is set to YES in the DIS control file. If this flag is set to YES, the latest cost prices can be updated automatically during the daily batch run. This is because cost prices are not updated per period as purchase prices are and the costs must be based on today’s SPP. This can be done regardless if the Item classification costing/pricing is active or not. See Automatic update of cost prices for more information.

Result after SPP download

If you download from the Item classification definition level, all panels below will be updated. If you download from the individual levels in the item file, only the applicable panel will be updated.

Item file panelField information
Inventory information Std net purch price: The standard net purchase price will be updated with the downloaded (from the item classification definition) standard purchase price (SPP). This is the current purchase price without landed costs. If supplier discounts are defined for the item they are also reduced.

Standard cost: The standard cost will be updated with the Standard purchase price (SPP) with landed costs. The landed costs calculation is done during any of the following:
  • the download of the Standard purchase prices (SPP)
  • when cost prices are updated during the daily batch run (i.e. Update actual purchase price)
  • when the Refresh landed costs program is manually started.
Standard cost sales: The standard cost sales is calculated automatically from Standard cost using up-marks defined in the item classification definition.
Warehouses The same fields as described above for the Inventory information panel are updated for the applicable warehouse.
Purchase prices Prices for Default purchase unit are updated.
Purchase prices per period Prices for SPP period are created/updated. You can toggle the purchase prices per current, historic and all periods by clicking the applicable function key.

SSP download

Because the pricing routine requires the item to be completely created before any pricing calculation can be applied, you can download the Standard Sales Prices into the Item sales price lists, AFTER item creation, where they can be used as a calculation basis in the standard pricing routines.

Manual trigger

The download of the standard sales prices can be done from the following locations:

Note: When the SSP group prices are downloaded, some sales price list records may already exist with validity periods that overlap the SSP group period. These records could have been manually created or automatically created during previous downloads. Before the SSP group prices are downloaded, all records with overlapping periods are deleted if the Short term pricing flag is set to NO in the DIS control file. If this flag is set to YES, the period starting with the same date as the new period is deleted. If the deleted periods were automatically created, the corresponding SSP groups are deactivated.

File Panel Trigger point
Work with item classification definition Standard sales price groups – current The Item simulation/download option. This program is accessed in two modes.
  • If the SSP group has not been activated, this program is called in simulation mode, allowing you to view the price information for the SSP group.
  • If the SSP group has been activated, this program is called in Update mode, allowing you to download the prices, per price list, to the Item/Sales prices panel for all items connected to the grouping structure of the item classification definition.
You can also view the prices via the Price simulation function key on the Work with item classification, Standard sales price header panel.
Work with items Sales prices The Download prices option downloads the prices per price list.

The F10=Download prices function key downloads the prices for all prices lists applicable for the item.

Automatic trigger

The following would automatically trigger a download:

  • Activating a SSP group. You will access the Item sales price download panel where you can first view the items that will be updated and the pricing information. The download of the sales prices is done via the Download function key on this panel.


  • SSP changes are not allowed when the SSP group is active. Price value changes are, however, allowed for SPP groups connected to active SSP groups. If changes are made to the connecting SPP group, sales prices are not automatically recalculated. An alert can be configured in IBS Alert Management to inform that purchase prices/cost prices were changed and there might be a need to download sales prices. The following Alerts can be activated for this purpose. (Note: You must activate them and assign the applicable person as receiver. See Configure the system to send/receive alert messages for instructions.) The download may be performed via any of the following locations listed in the Manual trigger above.
    • ICLDEFNCHG (Item classification definition change)
    • ICLDEFNSPP (SPP or SCS mark-up changed)

Result after SSP download

The following fields/information are updated in the Item file for the items that belong to the Pricing grouping structure:

Note: If the formula used to calculate the sales price information is based on the purchase price (SCS= standard cost sales) in the SSP header or in characteristic exceptions, this information will also be updated in the item file (panels Inventory information and Warehouses) when you download the sales prices. See Result after SPP download above for more information.

Item file panel Field information
Sales prices The price lists holding the sales prices are updated on this panel.
Sales price per period, current The sales prices per validity period for the Item/Currency/Unit/Price list combination are updated. You can toggle the current, historic and all prices.
Sales price per period, details The sales price details per validity period for the Item/Currency/Unit/Price list are updated.
Qty dep sales prices, limits If any quantity dependent pricing was defined for the price list, the information will be updated on this panel.

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