Oracle Order Management enables you to establish agreements with your customers that let you define the prices, payment terms and freight terms that you negotiated in the agreement.

When pricing, the pricing engine ignores qualifiers attached to a price list associated with an agreement if the agreement is chosen at the time of order entry. The pricing engine, will however, still check for product and pricing attributes in the price list associated with the agreement.

Agreement

1. In the Agreement tab, enter an Agreement Name. Use a naming convention that is consistent and meaningful.  Consider using separate naming conventions for Standard Agreements versus Pricing Agreements.

2. Enter an Agreement Number. A consistent, meaningful naming convention should be considered and business practices established. This field is optional.
Enter a Revision number. The Revision number defaults to 1 at setup time. Additional versions of the same agreement can be maintained by updating the revision number for each new revision.

3. If you want this Agreement to be used only for a particular customer and their related customers, enter the customer name in Customer. The customer number displays in Cust Number.
Alternatively, you can enter the Customer number in Cust Number field and the customer's name will default to Customer field.
If you want this agreement to be available for any customer, leave the Customer and Cust Number fields blank.

4. Select an Agreement Type to classify agreements by type for reporting or control purposes.

Pricing
Select an Agreement price list type from the Price List Type field. Once a Pricing Agreement has been saved, you cannot update or change the value for Price List Type. Select from:

Pricing Agreements using Standard Price List

• Agreements using Standard Price List cannot have any agreement lines
• Price list and price list lines can only be viewed and maintained through the Price List Setup window
• A Standard Price List can be used with any number of Standard Agreements or to price orders which are not associated with a specific agreement
• You cannot create revisions for price list lines
• The Agreement Number is not automatically created as a qualifier for the associated price list

Pricing Agreements using Agreement Price List

• Pricing Agreements must have at least one agreement line
• Pricing Agreements can only be viewed and maintained through the Pricing Agreement Setup window
• Pricing Agreements must be associated with an Agreement price list
• An Agreement Price List can be used with any number of pricing agreements but cannot be used to price an order which is not associated with a pricing agreement
• Revisions can be created on pricing agreement lines through the Pricing Agreement Setup window
• Price list will always have the Agreement Number as a qualifier (and hence can only be used when the pricing agreement is specified on the Order Line)

Note: If you select Standard Price List, the price list must be an existing price list, and additional fields within this window will default from the standard price list selected. You can update the defaulted fields in the Agreements window, and the values will be used as defaulting sources for any orders using these agreements.
Note: If you select Agreement Price List, you can create or make changes to price list lines, and you can enter values for:

1. Description
2. Currency
3. Rounding Factor
4. Freight Carrier
5. Freight Terms
6. Comments

Payment

1. Select the Payment Terms.
2. Enter the Bill To name in Invoice To.
3. Enter the Bill To Address.
4. Enter the Bill To contact in Invoice Contact.
5. In the Rules region, enter a default Accounting Rule.
6. Enter an Invoicing rule.

Agreement Price List
If you have selected price list type as "Agreement Price List" in pricing tab then in the line level you can add item to the price list:

1. Enter a Customer Item number. Customer item is a pricing attribute.
When you enter a customer item, pricing creates one pricing attribute and one product attribute for the agreement line for the customer item and its corresponding internal inventory item.
2. Enter a customer Address and Address Category.
3. Enter an inventory item number in Product Value.
Note: You cannot enter an item category in Product Value. If you entered a customer item which is associated with more that one inventory item, you must select the correct inventory item for the agreement line.
4. Enter a UOM (unit of measure).
5. Select Unit Price for the Application Method.
6. Enter base price in Value.
7. Enter the effective Start/End Dates.
8. Select Price List Line in Line Type.
9. Select Primary UOM if this price list line unit of measure is the primary pricing unit of measure for the item.
Order Management uses the primary pricing unit of measure and the Oracle Inventory unit of measure conversion information to price an order whose unit of measure does not have a price list line.
For example, a price list has two price list lines for item A11111, one with unit of measure EA—the primary UOM—and one for boxes. When the pricing engine receives an order in unit of measure CS, it accesses the unit of measure conversion tables to convert CS to EA.
10. Select a Line Type:
• Price List Line
• Price Break Header: This option enables you to set up a price breaks, and is only available if Agreement Price List has been selected as the Price List Type.
11. Select Unit Price as the Application Method..
12. Enter the base price in Value.
13. Enter the effective Start and End Dates.
Defining Price Breaks for an Agreement Price List
You can create price breaks or "bracket pricing" for Agreement price lists to define prices that vary depending on the quantity ordered. For example, if a customer buys 10 items the price is $20 per item, but if the customer buys more, then they get a lower per unit price.
Note: If you define a price break for an item category, all the items within the category are eligible for the price break.

In Basic Pricing, you can use Point Break as the Price Break Type. This calculates the price based on the price break bracket in which the total quantity falls.
For example, if you ordered 14 units of Item A11111, the total quantity falls into the Price Break 2 bracket where the unit price is $19. So the price for all units is the price defined for Price Break 2. The total price is calculated as follows:
Total price = 14 * $19 each = $266

To define price breaks:
1. Complete the Agreement header information as outlined in the preceding section.
Note: You can create price breaks only for Agreement price lists using the Pricing Agreements window. You cannot create price breaks in the Price List window.
2. In the Pricing tab of the agreement, ensure the Price List Type is Agreement Price List. You can only set up price breaks for an Agreement Price List.
3. For the agreement line, complete the values (where required) for Customer Item, Address, Address Category, Product Value, Product Description, and UOM, Primary UOM, the Line Type.
4. Select Price Break Header as the Line Type.
The Price Break Type is Point which means the pricing engine charges each unit of volume at the price of the break within which the total falls.
5. Select Unit Price as the Application Method.
6. Enter the Break UOM.
7. Enter the effective Start and End Dates.