Internal pricing engine

Internal Pricing Engine (IPE) provides functionality for currency conversion with maintained exchange rates. IPE easily retrieves price data based on the price records validity, the quote pricing date, and price data manipulation for quotation.

IPE comprises

• Price item type
• Pricing table (also known as lookup table)
• Pricing scheme
• Pricing step
• Price item type category

IPE inputs

• Pricing scheme
• Pricing step
• Lookup table data
• Information in the executed quote

IPE outputs

• Sales item net price (based on each sales item and known as sales item unit price)
• Sales item total price (based on total quantity)
• Document header net value and the breakdown of each

Price item type

Price item type is maintained as master data.

The CPQ administrator maintains price item types in Administration > Master Data Management > Price Item Type.

Configure a price item type

1. From the application left navigation area, select Pricing.

2. From the list, select Price Item Type.

3. Select to add a new line to the list.

4. Select the new line to enter values or make selections:

   • Name—Unique name for the price item type.
   • Price Item Type Category—Select a category. See Price item type category.
   • Price Item Type Sign—Optional. Options are Plus and Minus. The default value is Plus, which adds up to the cost of quote and sales item net price. It is used when the value of price item type is added or subtracted from the sales item amount.
   • Price Item Relevance—Optional. Options are:
     • 0—The price item type applies to quotes.
     • 1—Default. The price item type applies to sales items.
     • 2—The price item type applies to quotes and sales items.
   • Default—Not applicable to IPE.
   • Is Percent Value—Optional. Determines whether the price item type is percentage or amount.
   • Is Quantity Based—Optional. Determines whether the price item type is based on quantity or lump sum.
   • External Id—Not applicable to IPE.
   • ERP Id—Not applicable to IPE.
   • Is Delta—Optional. Determines whether or not the price item type is a delta price item. See Delta pricing.

5. Select Save.

Pricing table

The pricing table (also known as the lookup table) stores data inside the CPQ system. It supports search with well-defined expression or criteria.

For more information on how to define and configure lookup tables, read Lookup tables.

Synchronize lookup table with ERP

CPQ can integrate with the SAP ERP system. The data maintained in SAP ERP custom tables or views can be synchronized with the lookup table to be used by the system. If synchronized, data is maintained in the ERP system, but pricing and calculations are performed by CPQ.

Typically the ERP table and the lookup table, as well as the ERP field and the lookup table field, are mapped one-to-one through the ERP Id.

Pricing scheme

The pricing scheme is a predefined setup of how quote pricing is calculated in the CPQ system. For more information on how to define and configure a pricing scheme, read Pricing scheme determination.

The pricing scheme is composed of multiple pricing steps. Each pricing step represents one part of the sales item net price. The aggregate number of all sales items net prices shows as a document header price (also known as the quote price).

The system outputs the the sales item net price, sales item net value, and document header net value. Events that affect the quote price (such as adding a new line item, changing the quantity of sales items, deleting sales items, or changing the price date) automatically trigger internal pricing.

Additionally, users can select the internal pricing button to generate pricing.

Create a pricing step

In the New Pricing Step dialog, enter values or make selections:

• Price Item Type—Price item type and its associated category that determines how the pricing step is calculated.
• Pricing Step Name—Name of the pricing step.
• Sequence Id—Sequence ID of the pricing step. No duplicates are allowed.
• Percent On—Defined only when the price item type is percent value.
• Arithmetic Expression—Optional. Defined only when the price item type is subtotal.
• Search Expression—Optional. Defined only when the price item type is fetched.
• Record Type—Not applicable.

Delta pricing

Delta pricing is also known as price change. Price changes over time are saved into one lookup table and can be used for tracking purpose.
To save price as delta price in a lookup table, administrators must designate the table as a delta price table by enabling Delta Price at the time of lookup table creation.

To create delta price item, the setting Enables Delta Price Item Creation must be on.

When a quote is in accepted state (confirmed and approved), administrators can save the delta price to use it in the next quote.

When a delta price is created, it is saved to the delta price table. There are two places to check the delta price: the delta lookup table and product pricing.

Delta pricing in pricing scheme

To use delta pricing, administrators must use the price item type of Calculated Category. For more information, read Price item type category.