Pricing Group Guidelines for Matrix Cells

The system provides ways of grouping customers and products for your organization. Use these groups to determine costs and prices when buying and selling products. Anyone in your organization who buys, sells, or does accounting needs an understanding of the following group concepts for pricing:

• Customer Price Classes

• Product Groups

• Buy Groups and the Matrix Cell

• Sell Groups and the Matrix Cell

Customer Price Classes

Customers are categorized by price class and customer type. These categories are set up in the Valid Customer Price Classesand Default Customer Price Classcontrol maintenance records. Grouping customers by price class lets you give your best customers your best prices.

The customer type is used for promotional pricing. Define the customer type and default price class from the customer record. For example, your customer types may be: large contractor, small contractor, electrical, industrial, and retail. You can give all electrical customers a discount this month on certain products.

Product Groups

Categorize products by product buy and sell groups. Organizing products by groups allows you to apply similar pricing to similar products. These product groups can include all or part of the products in a price line. For example, In the Sylvania price line, miniature lamps could be in one sell group, and fluorescent lamps another. Product groups are defined in Price Group Maintenance.

You can also group products according to the sales velocity, or ranking, of an item. For example, group your A items, your B items, and your C items. Use this approach when the selling price of the item is based on its relative velocity. Slower moving items have a different multiplier than the multiplier for faster-moving items.

Buy Groups and the Buy Matrix

Create matrix cells in Quick Buy Matrix and Buy Matrix Maintenance using buy groups and a formula to determine the costs of products from your vendors.

For example, you can purchase lamps from more than one vendor. The following table shows matrix set up for four vendors, listed across the top, and three buy groups, listed on the left. Each table cell represents one buy matrix cell. When you purchase lamps from the FLU-LMP group from Phillips Manufacturing, the system selects the matrix cell assigned to that vendor and group. In this example, the formula for the florescent lamps is TRADE -23%.

The system requires buy groups for the following reasons:

• To maintain multiple pricing arrangements from multiple vendors on the same group of products.

• To have multiple pricing arrangements from a single vendor on the same group of products, such as quantity breaks.

When you have a single primary vendor you can maintain costing through the price sheet and price sheet discount classes instead of a buy matrix cells.

Sell Groups and the Sell Matrix

Create matrix cells in Quick Sell Matrix and Sell Matrix Maintenance using sell groups and formulas to help determine the prices of products for your customers.

For example, lamp prices vary for different customer price classes. The following table shows matrix cell set up for four customer price classes, listed across the top, and three sell groups, listed on the left. A row intersects with a column at a matrix cell, which contains the formula the system uses to price the product. When you sell lamps from the SYL-FLR group to a customer assigned price class 2, the system selects the matrix cell assigned to that customer price class and group. In this example, the formula for the florescent lamps is REP-COST *1.8 (replacement cost plus 8%).

See Also:

Buy and Sell Group Overview

Pricing Basis Fundamentals

Pricing Matrix Overview