Understanding Price Calculation Methods
Price Calculation method is a new concept introduced by Microsoft with Business Central 2020 Fall Release. This offers the option to create additional price calculation logic. Using isatech’s Advanced Price Management apps you’ll get two different calculation methods available.
Lowest Price Calculation Method
Basically the lowest price calculation extends the standard pricing engine of microsoft. This means that it just aim to find the lowest permissible price with the highest permissible line discount on a given date.
Advanced Price Managament checks the combination of the bill-to/sell-to customer (see Advanced Price Management Setup) and the item and then calculates the applicable unit price and line discount percentage, using the following criteria:
Does the customer have a price/discount agreement, or does the customer belong to a group that does, or does the customer belongs to Customer Treview Node that does? Is the item or the item discount group on the line included in any of these price/discount agreements? Is the order date (or the posting date for the invoice and credit memo) within the starting and ending date of the price/discount agreement? Is a unit of measure code specified? If so, Business Central checks for prices/discounts with the same unit of measure code, and prices/discounts with no unit of measure code. Business Central checks whether any price/discount agreements apply to information on the document or journal line, and then inserts the applicable unit price and line discount percentage using the following criteria:
Is there a minimum quantity requirement in the price/discount agreement that is fulfilled? Is there a currency requirement in the price/discount agreement that is fulfilled? If so, the lowest price and the highest line discount for that currency are inserted, even if local currency would provide a better price. If there is no price/discount agreement for the specified currency code, Business Central inserts the lowest price and the highest line discount in your local currency.
If no special price can be calculated for the item on the line, then either the Last Direct Cost or the Unit Price from the item card is inserted.
Closest Price Calculation Method
Unlike the Lowest Price Calculation method the Closest Price Calculation method is not interested in finding the lowest permissible price with the highest permissible line discount but the first price or discount available using searching priorities as follows.
- Is there a price/discount available for a given customer?
- Is there a price/discount available for a customer price group or customer discount group the customer is belonging to?
- Is there a price/discount available for a customer treeview node the customer is belonging to? If there are several nodes with price/discount available. The search will start from the customer node level up to the root level. When a price/discount is found then the search is stopped.
- Is there a price/discount available for all customers?
- If no special price can be calculated for the item on the line, then either the last direct cost or the unit price from the item card is inserted.
The search will start from priority 1 up to priority 5. Once a price/discount is found, then the search stops.