Our current step in the process takes us to Unit 7: Managing price information with table data and price models in SAP Price Calculation.
In the previous unit, Lisa used the Manage Lookup Tables app to create a lookup table format for Bob’s printer customer. Lisa has a good understanding of the price models supported by Price Calculation. She selects a price model and will maintain the lookup table based on Bob’s business requirements.
In our next lesson, we’ll populate these tables with data to send prices to SAP Subscription Billing.
Let’s continue the process of populating the lookup tables using the Manage Lookup Table Data app.
Select the video below to learn how to enter the pricing information in a lookup table!
CSV File Field Terms Formatting
The field terms must follow a particular format to ensure correct calculations and analysis. These terms include the following:
- validityStart and validityEnd: The validityStart and validityEnd fields define the times a condition is valid. Dates are provided in the format YYYY-MM-DD. Start and end dates are optional. If no value is provided, the condition will have no validity limitations regarding the start and end dates.
- Price: The column name price refers to a pricing strategy of Single, Volume, or Tier.
- Price Type: The price type column refers to the price condition and can be "Fixed", "Linear", or "Percentage".
- Range: The column name range field applies to "Volume" and "Tier" price strategies only. Range contains the upper bound quantity value (included) of an interval if applicable. If the value is omitted, the interval is unbounded, which is common for the last upper interval.
- Range Unit:Range unit refers to the unit quantity. It needs to contain the Unit Code of the quantity unit as it is managed by the units of measure service.
- Value:Value reflects a price amount or percentage as a factor. For example, a value could for instance be "1.55" to indicate a value of 1,55 or "0.05" to indicate a value of 5%.
- Value Currency:Value currency represents the ISO currency code associated with the "value" field.
- Quantity Value:Quantity value is used with Linear price types only. This field remains unused with other price types. quantity value represents Associate this field with quantities other than 1. For example, consider a service with a price of 10 euro multiplied by 5 units. The quantity field would contain 5.
- Quantity Unit: The quantity unit field represents the quantity unit associated with the above field quantity value. It needs to be given in the Unit Code of the quantity unit as it is managed by the units of measure service. In our example we charge per printed page and therefore we are using the Unit of Measure "Each", so the quantity unit in the table would be EA. If you want to know which quantity type to enter, you can check the rate element in SAP Subscription Billing. There you will find the correct unit.
The field terms outlined above are governed by two parameters: Pricing Strategy with the acronyms SING, VOL, SCALE and Price Condition with the acronyms FIXED, LIN, PER. A combination of these parameters defines a pricing model. Note that the specific meanings of these acronyms may vary depending on the context or the specific business model of the company.
Let’s review these combinations in a few real-world scenarios.
Fixed Pricing Example
We will begin with a combination of the price strategy "Single" with a price condition.
Single + Fixed: The price strategy Single alone manages one price value for a product. Combining "Single" with the price type "Fixed" causes the Fixed price to disregard any quantity value entered in a field. Note that a combination of "Tiered" and "Fixed" will generate an error upon uploading the lookup table to SAP Price Calculation.
Single + Linear: Entering the price type "Linear" multiplies the price by the quantity.
Single + Percentage: Entering the price type "Percentage" multiplies the base price by a percentage factor.
Consider the following price logic for the sale of apples per kilogram:
Price Logic for the Sale of Apples Per Kilogram
| Quantity | Price | Reference Quantity |
|---|---|---|
| any | €5 | 1 kg |
Let’s make a calculation for a price of €5 per kg multiplied by 7kg of apples: €5 x 7kg = €35. This formula would appear in the table fields as follows:
Price Calculation
| Price | Price Type | Range | Range Unit | Value | Value Currency | Quantity Value | Quantity Unit |
|---|---|---|---|---|---|---|---|
| Single | Linear | 5 | EUR | 1 | kg |
Volume Pricing Example
In SAP Price Calculation, volume pricing is a strategy where the price per unit decreases as the quantity of the product purchased increases.
In this example, there are three volume pricing intervals. The price for the corresponding interval is applied to the total quantity purchased.
Price Logic for the Sale of Apples Per Kilogram
| Interval | Price | Reference Quantity |
|---|---|---|
| Up to 5kg | €48 | |
| 5kg to 25kg | €9 | 1kg |
| 25kg and up | €8 | 1kg |
Let’s calculate the price for 4kg of apples. This would fall under the "Up to 5kg" interval for a "Fixed" price of €48.
Next, let’s calculate a volume-based price for 10kg of apples. 10kg falls within the "5kg to 25kg" interval at €9 per kg. Two price types can be used in this example: "Fixed" and "Linear." The linear price of €9 per kg is multiplied by 10kg of apples.
The fields in the table would appear as follows:
Volume-based Pricing
| Price | Price Type | Range | Range Unit | Value | Value Currency | Quantity Value | Quantity Unit |
|---|---|---|---|---|---|---|---|
| Volume | Fixed | 5 | kg | 10 | EUR | ||
| Volume | Linear | 25 | kg | 9 | EUR | 1 | kg |
| Volume | Linear | kg | 8 | EUR | 1 | kg |
Tiered Pricing Example
"Tiered" prices go a step further than Volume prices. Like Volume prices, Scale prices are associated with intervals of quantities. However, unlike Volume prices, more than one interval can be applied to calculate the final cost. All quantities that fall under an interval are considered.
Let’s look at a Tiered pricing scenario using book sales as an example. This time we’ll use the pricing strategy "Tier" with a "Linear" price type:
Tiered Pricing
| Interval | Price | Reference Quantity |
|---|---|---|
| The first 10 (above 0 and up to 10) | €10 | 1 book |
| The first 10 (above 10 and up to 20) | €9 | 1 book |
| Above 20 | €8 | 1 book |
The purchaser would like 5 books. Five books fall under the first tier. Therefore, the price is 5 x €10 per book = €50.
Let’s consider the purchase of 12 books. The first 10 fall under the first tier and the last two fall under the second tier. In this scenario, two interval quantities are used to calculate the total cost of 10 x €10 + 2 x €9. = €118.
In another example, a quantity of 26 books falls under the first two intervals - 10 books at €10 each and another 10 books at €9 each. The last 6 books fall under the last interval at €8 each for a total cost of 10 x €10 + 10 x €9 + 6 x €8 = €238.
The fields of the table would appear as follows:
Tiered Pricing
| Price | Price Type | Range | Range Unit | Value | Value Currency | Quantity Value | Quantity Unit |
|---|---|---|---|---|---|---|---|
| Tier | Linear | 10 | EA | 10 | EUR | 1 | EA |
| Tier | Linear | 20 | EA | 9 | EUR | 1 | EA |
| Tier | Linear | 8 | EUR | 1 | EA |
Let’s refer to our original example representing the usage data of a printer service. However, this table does not include a "refurbished" printer. Instead, the table below focuses on usage-based fees. (The exercise following this unit will include a table with a recurring fee and a refurbished field.)
Usage-based Fees
| Service | Monthly quantity of pages on printer | Price | Included prints on printer |
|---|---|---|---|
| Standard print | 1-499 pages | 0,05 € per page | 100 pages in first 12 months |
| Standard Print | 500-1499 | 0,04 € per page | 100 pages in first 12 months |
| Standard print | 1500 and more | 0,03 € per page | 100 pages in first 12 months |
| Premium photo print | 1-3 pages | 0,- € per page | None |
| Premium photo print | 4 and more | 4,99 € per page | None |
Let’s finalize this lookup table CSV file and upload it to the Lookup Table in SAP Price Calculation.
Select the video below to learn how to upload the lookup table file!
Summary
Now that Lisa has populated the lookup table CSV file with pricing details according to Bob’s needs, she’s ready to establish Price Element Specifications to set up the final pricing scheme, the subject of our next unit.