Oracle Order Management

Freight & Special Charges and

Converting Freight Costs into Charges
with Basic Pricing
An Oracle Technical Brief
September 2000
Revised December 2002
 Freight & Special Charges and Freight Costs

EXECUTIVE OVERVIEW
Oracle Order Management release 11i provides customers with extensive ability to
assess freight and other charges on orders. Charges can be associated with the
order as a whole, or can be assessed on specific lines. Charges can be set up so that
they are automatically applied as orders are entered based on business rules you set
up, or charges can be applied manually. These charges can be viewed and modified
from the Sales Order form by users with appropriate security. Costs that are
associated with shipment of goods can be captured during the shipping process and
can be passed through to orders as charges, if desired.
Previous versions of Oracle Order Entry had extremely limited functionality in the
area of freight and special charges. Oracle Order Management now has powerful
and flexible features that should be capable of supporting nearly every business’
requirements for assessing these charges. The trade-off is in complexity of setup.
This paper will discuss the capabilities of the new freight and special charge model
in Order Management, and will offer tips and examples on how to set up the
charges to perform common charge scenarios. In particular, the setup of the
automatic conversion of costs to charges is detailed.

INTRODUCTION
The process of applying charges and capturing freight costs is now divided between
the Order Management and Shipping Execution modules. Order Management
applies Freight or other Charges to the customer invoice whereas Shipping captures
all Freight Costs incurred on a shipment of goods
Freight and Special Charges are defined as the amount applied to the customer
invoice for movement of a shipment to a destination or for other miscellaneous
reasons. Freight and Special Charges may be assessed for the order header or order
line. The user has the ability to apply the charges to the order manually, via order
import, through the Process Order open API or automatically based on the charges
setup. At the time of order entry, some of the freight and special charges that will
be applied on the order may be known. Other charges can be applied later in the
order process, depending on user setup and business practices. Freight and Special
Charge Types that are seeded include freight, handling, insurance, export fees and
miscellaneous charges. All freight and special charges are passed to Receivables to
be invoiced.
Freight Costs are actual expenses incurred by the shipper while transporting a
shipment. The Freight Cost Types that are seeded include freight cost, handling,
insurance, administrative fees and export duty. Shipping Execution allows users to
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input costs incurred on the shipment of goods using the Shipping Transaction
Form or through the Shipping Open Interface. Once the ship confirmation
process completes, any costs input are transferred to Order Management for
storing on the order, and they can be converted to charges based on rules the user
specifies. Freight costs captured at shipping are not invoiced to the customer.
Freight charges can be automatically derived from the freight cost. The freight
charge represents the amount passed on to the customer receiving the shipment.
The freight charge can be equivalent to the freight cost or a greater amount, i.e.
freight cost plus a markup. Other ways commonly used to assess freight charges
are based on predetermined fixed amount for each order or for each item or tiered
amounts based on total order amount, ship method, priority, freight terms and a
host of other variables.

BACKGROUND
Companies assess charges, both for freight and for handling and other purposes, in
many and varied ways. Policies for assessing charges can vary within the same
company based on customer, size of order, destination, weight, and numerous
other factors. Whereas some companies pass through actual shipping costs to their
customers, other companies use ‘shipping and handling charges’ as an opportunity
to increase revenues. In most cases, companies would like these policies to be
implemented by the software without requiring manual intervention by an order
taker or clerk. Especially in an eBusiness environment, where orders are entered in
a self-service mode through iStore or other web front-ends, the user cannot be
expected to input their own freight and special charges. The goal is to have orders
processed in as ‘hands-off’ a process as possible.
In order to provide maximum flexibility for calculating and applying charges, the
Order Management design team decided to make use of the rich functionality
already available within the Advanced Pricing product to implement the Freight and
Special Charges feature. We therefore are using Pricing Modifiers to model
Charges, and Pricing Qualifiers to model the rules for applying those Charges. And
we make use of a Pricing Formula to model the passing through of Freight Costs to
Charges. All of this can be accomplished with the Basic Pricing part of Advanced
Pricing that comes with Order Management – it is not necessary to separately
license Advanced Pricing to implement Freight and Special Charges features. As a
result, to use Freight and Special Charges in Order
Management, it is necessary to do the setup of these Charges using the
Pricing setup forms, specifically Modifiers, Qualifiers and Pricing Formulas. The
user interface for this setup is somewhat challenging due to the extreme flexibility
of function that Advanced Pricing offers. This paper will show you how to set up a
few simple common cases, but won’t attempt to explain every detail about every
option. To implement more complex business rules for assessing charges, the
reader is encouraged to study the Advance Pricing User’s Guide for information
about all the various fields and features that are available.

PROCESS FLOWS
Here are several common business flows, from a high level, that should help
explain the process in a general sense. Of course, the trick to making all of this
happen is setup, so after we look at these flows, we’ll explore in detail the setup that
drives charges and the cost to charge conversion.
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Typical Sales Order with Automatic Charges: The basic flow for applying Freight or
Special Charges to an order starts in the Sales Order form. A user creates an order
and enters the lines. When saving the lines, the freight and special charges are
automatically applied to the order line based on the setup done by the customer.
Once charges have been applied to the order header and/or line, the user can see
the total charges in the total area of the main tab of the Order Header, and a total
of charges for each line in the CHARGES column on the Sales Order Lines form,
Pricing tab. In addition a user can view, modify or add manual charges by clicking
the
ACTION button on the Sales Order form and selecting CHARGES. In the
Charges window that pops up, the user will be able to see in detail all applied
Freight and Special Charges. If the charge has the OVERRIDE ALLOWED box
checked, then the user can modify the charge.
Entering Costs and converting them to Charges: Once the user is ready to ship the
order, he/she has the ability to key any costs associated with the line or delivery.
When ship confirmation processes (and specifically when the Order Management
Interface processes), those costs will be transferred to the order line as price
adjustments. And then the conversion of the costs into charges will be triggered,
provided the COST to CHARGE conversion setup has been done. The converted
charges will be applied to the line, and then those charges will get invoiced with the
order line. Once the line is invoiced, the user will not be able to apply any new
charges to the order line.

Sales Order with Manual Charges: The flow for adding charges manually is similar to
the flow for automatic charges. The user enters the order header and lines.
Automatic charges may be applied, depending on how the setup was done. The
user can also manually apply any nonautomatic charges if he or she has appropriate
security. To do that, he/she selects the header or line that he/she wants to apply
charges to, and using the ACTION button, selects CHARGES. In the Charges
window that pops up, the user can go to a blank line and select from a LOV any
manual charge that the order or line qualifies for. Security for manual charges is
based on the profile option: ‘OM: Charging Privilege’. If the profile is set to None,
the user will only have viewing access to charges and cannot apply manual charges.
If set to Full Access, the user can apply manual charges and modify overrideable
charges. If set to Unlimited Access, the user can apply manual charges and even
modify non-overrideable charges.

Invoicing and taxation: All charges are invoiced. Line level charges are invoiced
with the line they are attached to. Header level charges are invoiced with the first
line that is invoiced for that order. Header charges that are added after some lines
have been invoiced will be invoiced with the next line that is interfaced to
Invoicing. Charges are sent individually to Receivables as invoice header level
freight charges, although AR summarizes them into one freight line for the Invoice.
Taxes on charges are not calculated at this time during order entry, even if charges
are taxable in the jurisdiction. If it is necessary for charges to be taxed, the user
should set the ‘TAX: Invoice Freight as Revenue’ profile option to Yes and also set up a
dummy Freight item in Inventory that is taxable and specify it in the ‘TAX: Inventory
Item for Freight’ profile option. Then OM’s Invoicing Integration will send the
charges to Receivable’s
Autoinvoice as Lines with that Inventory Item on them, rather than as Freight.
There the charges can be taxed as required and revenue accounting for the

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charges using AutoAccounting can be done. Returns: There are a few
considerations regarding charges for return lines.

First, you can set up Freight and Special Charges that will be charged on return
lines or orders – these are typically such things as restocking fees, return handling
fees etc. These charges are set up just like any other charges, though you would
most likely create rules (qualifiers) for applying these charges so that they apply only
to return lines (line category = return).
Secondly you may or may not want to refund charges that the customer paid on the
original order that is being returned. Users can define which charges are refundable
by checking the “Refundable Flag” (INCLUDE ON RETURNS checkbox) when
the Charge Modifier is set up. If the return line is created referencing an existing
order line, any refundable charges associated with the original line will be
automatically applied as a negative charge on the return. If the user creates a new
return line without a reference to any existing line, then the user will have to
manually apply any refundable charges.
Backorders: There is a profile option that controls whether or not charges will be
applied to backordered lines on an order. Some companies by policy do not charge
freight or special charges on backorders, while other companies do. The profile
OM: Charges for Backorders controls this functionality. Set it to YES if you want
backordered lines to be assessed charges. The default is NO. Please note that you
can set this profile only at the site level.

CHARGES SETUP
As we said earlier in this paper, Freight and Special Charges in Order Management
are set up using the forms and features of Advanced Pricing. Charges are
considered to be pricing Modifiers, and they have their own special modifier list
type – it’s called ‘Freight and Special Charge List’. The user defines a charge list,
and creates list lines for each type of charge (i.e. handling, freight, miscellaneous)
that he/she wants to have applied to the order or order lines. A user can also
“qualify” the modifier, which means certain “tests” or qualifications must be met
first before the modifiers are applied to the order or order lines. For example, does
this particular customer get these freight charges? Does the order amount justify
(qualify for) these attractive Freight Terms? Or does the size of the order (amount
or quantity) dictate standard freight cost conversion with markup?

A Little Terminology
Before we get into details of setting up Modifiers and Qualifiers, there are a few
terms to get straight. There are Freight Charges, Freight Costs, Cost Types, Charge
Types, sub-types, lookups, Freight Terms etc. etc. and all these terms sound alike.
However, to set up your charges and especially to get the Cost to Charge
conversion working correctly, it is important that you understand what each of
these is and what they do.
Let’s start with the Freight Costs: they are the simplest to understand and set up.
Freight Costs – in general are costs incurred in the shipment of goods. Within
Order Management and Shipping Execution, they are the costs input at Ship
Confirmation that reflect money your company pays for the movement of goods.
Like most things within Oracle Applications, you have to CLASSIFY the Freight
Costs by Freight Cost Types – these are general descriptors used to categorize the
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types of costs incurred. OM seeds the following Freight Cost Types: Duty,
Handling, Insurance, Export, Freight, and Administration. Freight Cost Types are
just Lookups - you can set up additional Freight Cost Types by navigating to:
Shipping > Setup > Lookups. Use the flashlight icon and select
FREIGHT_COST_TYPE to view the existing list.
Next you have to NAME the Freight Costs you are going to use. The Freight
Cost Names are associated with a Freight Cost Type. For example, the freight
cost type Export might include the following Names: harbor maintenance fee, ad
valoreum tariffs, import quota tariff. These are the Names that the shipping clerk
will see in the Shipping Transaction Form when Freight Costs are entered. You set
up Freight Cost Names by navigating to Shipping > Setup > Freight > Define
Freight Cost Types. Press Control+F11 to view existing freight cost names. On a
blank line, enter a new Name, choose a Freight Cost Type, Currency and Amount.
The Amount entered here will default in the Freight Costs form at ship
confirmation when that particular Freight Cost Name is selected in the Cost Type
field. At ship confirm, the user has the option of accepting this default Amount, or
entering a different amount.
That was the easy part. Now we get to defining Freight Charges and their
terminology. Freight and Special Charges are what you charge your customer
for shipping goods or for other services. Advanced Pricing provides a lookup called
Freight Charge Types and seeds one called Miscellaneous. Associated with each
Freight Charge Type are Freight Charge sub-types, which are also lookups with
lookup type equal to the name of the Freight Charge Type. Look at the one with
lookup type of MISCELLANEOUS – this is where you should define any charges
that you might want to assess that won’t be converted from Shipping costs. These
sub-types along with the Freight Cost Types (not Names) described above show
up as Charge Names when you define your Freight and Special Charge modifiers.
Finally there are Freight Terms. Freight Terms is an attribute of the order header
and line and it is driven from an Order Management Quickcode ( lookup) with
lookup type of FREIGHT_TERMS. There is a good explanation of the seeded
Freight Terms in the Order Management User’s Guide. There is absolutely no
functionality inherent in Freight Terms in Order Management – but Freight
Terms can be used as a qualifier for applying charges, as we shall see in the
examples that follow. Defining Pricing Modifiers for Freight and Special
Charges
The user has to set up modifiers that define how to apply charges to orders. A
modifier’s function is to define what the charges are (their name, how they are
calculated, what level they apply to) and how to apply them – either automatically
based on qualifiers or manually by a user. There are several different ways you can
tell the system to calculate charges:

• Fixed LUMPSUM amount: A fixed charge amount (e.g. $10.00 handling fee)

• Fixed AMOUNT per Pricing Quantity: A fixed amount charge per pricing
quantity (e.g. $1.00 charge for each item ordered)

• Fixed PERCENTAGE: A fixed percentage of the List Price of the item (e.g.
5% handling fee).

• FORMULA: A formula to calculate the charge (i.e. Insurance Cost *

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 Constant). The basic components of the formula can be a PRICING
ATTRIBUTE and NUMERIC CONSTANT, to return a numeric value. The
user can attach the formula to the Freight Charge modifier.
If you set up charges to apply at the Order Header level, only Lumpsum or
Formula types of calculations are allowed.

So let’s try this out. Let’s create a simple Freight Charge and apply it to an
order.
Simple Business Scenario #1
Assume your company always wants to automatically assess a Freight Charge of $39.99 to all
orders, and also a Handling Charge of $10.00. Certain users can change the amount of the
charges at entry.
For this scenario, we will be using the lumpsum calculation method for the charges.
Navigate to the Pricing Modifier setup form by using the menu path: Pricing >
Modifiers. Choose a MODIFIER TYPE of ‘Freight and Special Charges List’.
Choose a NUMBER and a NAME for your Modifier List that you will be able to
recognize – the Number does not have to be numeric. Check the AUTOMATIC
box to make the modifier be automatically applied to the order. Finally, select the
CURRENCY, START and END DATES and a DESCRIPTION for the modifier.
At this time, we could add Qualifiers for the whole list if we wanted all of these
charges applied only to orders or lines with certain attributes. For this first
scenario, we will not be using any qualifiers. The freight charges will always be
applied, no matter what.
Next, we need to enter one modifier line for Freight Charges and another one for
the Handling Charges. You enter modifier lines in the Modifiers Summary Tab in
the lower half of the Modifiers form. Enter a userdefined MODIFIER NUMBER
for the first line. Choose the LEVEL of Order or Line to indicate whether you
want the modifier to be applied at the order or line level. For this example, choose
‘Order’. The MODIFIER TYPE of Freight/Special Charges will be selected.
Optionally, enter a Start and End Date. Check the AUTOMATIC flag to apply the
charges without user intervention. Set the OVERRIDE flag to Yes to allow
authorized users to change the amount of the charge once it’s applied. You must
choose a PRICING PHASE – this controls when the charge will be applied.
Choose ‘Header Level Charges’ for Order Level modifiers and ‘Line Charges’ for
Line Level modifiers. There are a bunch of other attributes on this tab that are not
relevant to the examples we’re showing – you can read the Advanced Pricing User’s
Guide if you want to know what they do. Here’s this form with data filled in for
this modifier.

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Next, move to the Discounts/Charges Tab and enter the charge details. In the
CHARGE NAME field, select “Freight Costs”, INCLUDE ON RETURNS can be
checked or not depending on whether or not you want this charge copied to
returns created from these orders, choose APPLICATION METHOD of
Lumpsum and enter a VALUE of $39.99.
Similarly, we will enter another modifier line for the Handling Charge. Enter a
second line within the Modifiers Summary tab region with settings similar to those
for the first line. Then, in the Discounts/Charges tab region enter the Charge
details as follows: CHARGE NAME is “Handling Costs”, INCLUDE ON
RETURNS can be checked or not, APPLICATION METHOD again is Lumpsum
and the VALUE is $10.00.
Here’s a picture of this form and tab with this data filled in:
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That’s all there is to it. We have now successfully entered a basic Freight and
Special Charge modifier with one line detailing Freight Charges and one line for
Handling Charges.
Note: If you want to apply a modifier like this, which is set up without any
qualifiers, then you must be sure to set the Pricing Profile option ‘QP: Blind Discount
Option’ to ‘Yes’.
Applying Automatic Order Level Charges on an Order
To see this modifier at work, create a new order within the Oracle Order
Management responsibility by choosing the menu path Orders, Returns >
Sales Orders. Enter the order header information including, Customer, Order Type
(e.g. Standard), Price List, Ship To & Bill To Addresses and Salesperson. Move to
the Lines Tab, enter any Item with a quantity of 1.
Save the order. Go back to the Order Main tab and you will see in the Totals area
Charges of $49.99 – the sum of the $39.99 Freight Charge and the $10.00 Handling
Charge.
To see the applied charges, select the Actions button > Charges from the
Header region. You will see the two applied freight charges with the

• Charge Name = Freight Costs and amount = $39.99.

• Charge Name = Handling Costs and amount = $10.00.

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If the user has appropriate security (based on the setting of the ‘OM:
Charging Privilege’ profile option), he or she can override the amount of either charge by keying over
it, entering a REASON and COMMENTS, and clicking the APPLY button.
Applying Manual Order Level Charges on an Order
What if your company doesn’t want to automatically apply charges to every order – instead you
want the order entry clerk to choose what orders to charge? How would you do that?
To make this happen, you have to change the setup of the previous Modifier - just
uncheck the AUTOMATIC checkbox at the modifier list header and lines. Then
enter a new order and line like we did above and save it. You will see that now no
charges have been applied automatically.
To apply the freight and handling charges manually, select the Actions button >
Charges from the Order Header. Click a new line in the Charges form, select the
CHARGE NAME = Freight Costs from the list of values. A charge named Freight
Cost of $39.99 will appear. Now, click on another new line in the Charges form,
select the CHARGE NAME = Handling Cost from the list of values. A charge
named Handling Cost of $10.00 will appear.
Note: If you are unable to apply charges manually: 1) check to make sure
the profile option, ‘OM: Charging Privilege’ is set to Full Access or
Unlimited Access, and 2) check to make sure that ‘QP: Blind Discount
Option’ is set to Yes (all modifiers with no qualifiers will be considered if
Blind Discount is set to Yes). To verify the above profile settings, navigate
to: Edit > Preferences > Profile and query those profiles.
To verify that the manual application of the freight and special charges has
occurred, look at the Total Charges on the Order Main tab or click the ACTIONS
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button and select CHARGES. A total of $49.99 will be in the totals area, and the
Freight Costs of $39.99 and Handling Costs of $10.00 will appear in the Charges
window. Since these charges were applied manually, the FIXED checkbox will be
checked automatically on the Charges window, indicating that those charges should
not be changed by the system.
All right – pretty simple so far. Now let’s add some qualifiers.

Simple Business Scenario #2

Assume your company always wants to automatically assess a Freight Charge of $39.99 to all
orders with Freight Terms of Prepay & Add, and a Handling Charge of $10.00 for those same
orders.
Setting up Automatic Order Level Charges with Qualifiers
For this scenario, we will be adding simple qualifiers to the charge list we set up in
the previous scenario. Access the Modifier Form and query the modifier list that
was set up in the last section. Now we will make two changes to the modifier lines.
First we will mark them as Automatic again and then specify qualifiers for them.
When you set up qualifiers for modifiers, you can do it by specifying the qualifiers
at the Modifier list header level or at the list line level. The Qualifiers specified at
the list header level will apply to all modifier lines defined in that list. This can be
useful to specify common business rules at the list header only once. Any Qualifiers
specified at the list line level are specific to that particular modifier line. Use this if
you need unique rules for applying one of the Charges but not all of them on a list.
For this scenario, we will set up header level qualifiers which will apply to both of
our charges in this list. Press the LIST QUALIFIERS button on the top part of the
Modifier form and a window will pop-up. This window will display any predefined
qualifier groups you may have already set up. For this scenario, do not select any of
these - press OK instead. Another window will be displayed to let you enter new
qualifiers. Enter: GROUPING NUMBER = 1, QUALIFIER CONTEXT =
Order, QUALIFIER ATTRIBUTE = Order Category, accept the default for
PRECEDENCE, OPERATOR is = and VALUE FROM = Order. Similarly enter
the second qualifier for Freight Terms. When you’re done, the Header Level
Qualifiers window should look like this:

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The grouping number uses the typical Oracle convention to indicate and / or
conditions. Qualifiers with the same grouping numbers denote the and condition
whereas different grouping numbers denote the or condition. QUALIFIER
CONTEXT is just a grouping of attributes, and QUALIFIER ATTRIBUTE is the
specific attribute within the Context that is used in the rule to be compared to the
VALUE using the OPERATOR. See the Advanced Pricing User’s Guide for an
up-to-date list of seeded Qualifier Contexts and Attributes or just look at what
shows up in the LOV. If you want to add your own Qualifier Contexts or
Attributes, it is possible to do that but explaining how is beyond the scope of this
paper. See the Advanced Pricing User’s Guide for how to do this.
Important Note: if you are using a qualifier for the first time, you must run a
concurrent program under the Pricing Responsibility called ‘Build Sourcing Rules’
to get Pricing to recognize this qualifier.
Applying a Qualified Automatic Order Level Charge to an Order
Create a new order as usual. Specify the FREIGHT TERMS as ‘Prepay and Add’
on the header. Move to the Lines Tab and enter a line or two and save your order.
You should see the two charges applied automatically at the order header level –
just as we did in Scenario 1 before. Verify that the charges are correct by looking at
the Order Main tab, charges total and by choosing the Charges Action to see details
of the charges.
You can verify that the qualifier is working by entering another order with a
different Freight Terms, and seeing that the charges are not applied.
OK – so far, so good. Now let’s take an example from a case sent by a
consultant at a real company.
Real Business Scenario #3
The company’s freight policy is defined as follows:
1. On each REGULAR delivered ORDER there will be a charge of $3.00 applied
automatically for freight.
2. There will be an additional freight charge of $0.50 per quantity for REGULAR deliveries.

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3. For SPECIAL deliveries there will be a charge of $11.50 per order and an additional
$1.00 per quantity.
The differentiation between REGULAR and SPECIAL deliveries are dependent on the carrier
or transport company. It will be modeled as Shipment Priority at the Order Header.
There are various ways that this can be implemented. One simple way is to set up
one ‘Freight and Special Charges List’ with automatic application, with list lines
qualified by Shipment Priority. Set up a new ‘Freight and Special Charges List’ with
the AUTOMATIC box checked. Do not assign any List Qualifiers. Then enter
four list lines, the first two qualified by Shipment Priority equal to REGULAR and
the second two qualified by Shipment Priority equal to SPECIAL. For each pair of
list lines, one will be at Order level and will be calculated as a Lumpsum and the
other will be at Line level and will be an Amount per quantity. For all of these, the
CHARGE NAME would be Freight Costs.
Here’s a picture of the Modifiers form Discount/Charges tab for this set of
modifier lines.

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The qualifiers would look like these - the second qualifier is to ensure that these
charges are applied only on order lines and not on return lines.

Line Level Qualifiers

Grouping Qualifier Qualifier Attribute Prece Oper Value
Number Context dence ator From

1 Order Shipment Priority accept = REGULAR

Code defaul
t

1 Order Line Category accept = ORDER

defaul
t

Applying Automatic Order and Line Level Freight Charges on an Order

Create a new order as usual. Specify the SHIPMENT PRIORITY as “REGULAR”
on the header. Move to the Line Items Tab and enter several lines and save your
order. You should see the header charge of $3.00 applied and you should also see
line charges of .50 per item for each line. Verify that the charges are correct by
looking at the charges total on the Order Main tab, and also by looking at the total
charges for each line in the Lines tab, Pricing tab.
You can verify that the qualifier is working by entering another order with a
SHIPMENT PRIORITY of “SPECIAL”, and seeing that the higher charges are
applied - $11.50 at the header and $1.00 for each unit of quantity on the lines.

So far we’ve been dealing with Charges applied or entered during order
entry. Now let’s see how to automatically convert Freight Costs entered at
Ship Confirmation to Freight Charges.
Setting up Freight and Special Charges For COST to CHARGE conversion
Refer back to the terminology section if you get confused by terms in this section.
After you define any Freight Cost Names in Shipping Execution, any costs entered
at Ship Confirmation are transferred to Order Management and are available for
the COST to CHARGE conversion process . You can convert the exact cost
amount to the charge amount, or you can do it with a markup or markdown.
Important Note – the cost to charge conversion described here applies line level
charges only. Costs always come across to Order Management from Shipping as
line level price adjustments, and the simple setup described below shows how to
covert them into line level charges. If instead you want the costs coming from
Shipping to result in an orderlevel charge, it will take additional setup to make that
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happen. You can convert these costs into order level charges by using a user-
defined pricing attribute for Order Level Costs and a custom sourcing rule to sum
up the line-level costs. See the Appendix of this document for an example
describing this setup in more detail.
To make the conversion process work (even if you are doing a straight cost
conversion with no markup), you must set up a Pricing Formula specifying the
conversion algorithm, and then use that Formula when you set up the Charge
Modifier. For example, suppose you want a markup of
30% to be applied to the cost to get the final charge (e.g. freight cost + 30%).
Begin by setting up the Pricing Formula using the navigation path: Pricing >
Pricing Formulas > Formula Setup. Type in a NAME that will describe your
formula, enter a DESCRIPTION, EFFECTIVE DATES (optional), and the
FORMULA equation. In this case we’ll use the equation 1*2 which means to
multiply step 1 by step 2. Then in the
Formula Lines block of the form, we’ll define those steps as Pricing Attribute
‘Freight Costs’ multiplied by a Numeric Constant of 1.3. So using this formula, the
system will take the freight cost (step 1) assigned at ship confirmation and multiply
by the numeric constant of 1.3 (130%) (step 2) which will equal the final freight
charge. Here’s how the Pricing Formula form will look when it’s filled out.

Now you need to create a new Charge Modifier List that uses this formula.
Navigate to the Modifier screen: Pricing > Modifiers. Enter the TYPE as Freight
and Special Charges List. Enter a NUMBER and a NAME. Check the
AUTOMATIC box. Finally, select the CURRENCY, START and END DATES
and add a DESCRIPTION for the modifier. Next enter modifier lines for the
charge list. Enter a MODIFIER NUMBER. Choose the LEVEL = Line. Select
the MODIFIER TYPE as Freight and Special Charges. Optionally, enter a START

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 14

and END DATE. Check the AUTOMATIC flag to apply the charges
automatically. Then move to the Discounts/Charges Tab and enter the charge
details. In the CHARGE NAME field, select “Freight Costs”, APPLICATION
METHOD is Lumpsum and specify the FORMULA you just created .
Now you must set up list level qualifiers which will apply to this modifier list. Press
the LIST QUALIFIERS button on the list header and enter some qualifiers similar
to the ones below:
Header Level Qualifiers
Grouping Qualifier Qualifier Attribute Prece Oper Value
Number Context dence ator From

1 Order Line Category accept = ORDER

defaul
t

1 Order Shipped Flag accept = Yes

defaul
t

1 Order Shippable Flag accept = Yes

defaul
t
These qualifiers will make sure that these charges will be applied to Order Lines
only when shipping occurs. (Shipped Flag = Yes). You can add any other qualifiers
that make sense to your business, too, such as limiting these freight charges to
certain customers or orders with particular Freight Terms, etc.
Apart from these list level qualifiers, you will need to create a line level qualifier for
each modifier line in your list. This qualifier will link the Freight Cost Type entered
at Ship Confirm to this Charge.
Select the modifier line with CHARGE NAME = Freight Cost, and click the
LINE QUALIFIERS button and enter: GROUPING NUMBER = 1,
QUALIFIER CONTEXT = Order, QUALIFIER ATTRIBUTE = Freight Cost
Type Code, PRECEDENCE = accept default, VALUE FROM = Freight.
LINE 1: Line Level Qualifiers
Grouping Qualifie Qualifier Attribute Preced Opera Value
Number r ence tor From
Context

1 Order Freight Cost Type accept = FREIGHT

Code default

With the Formula and this Modifier created, you can now convert Shipping Cost
into a Freight Charge . To try this, you will need to create a new order that matches
the qualifiers (such as Customer or Freight Terms) you set up for your Charges.

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 15

Assigning Actual Freight Costs at Ship Confirmation
Once you have booked and pick released the order (using autocreate deliveries to
simplify the process), you then enter the actual Freight Costs in the Shipping
Transaction Form when you do ship confirmation. To perform this task, navigate
to the menu: Shipping > Transactions. Query up the lines of your order. Within
the Lines/Containers tab of the Shipping Transaction Form, select the Actions
button > Freight Costs and choose GO. Enter the COST TYPE = Freight Costs,
CURRENCY CODE = USD and type in an AMOUNT (e.g. $15.00). Now ship
confirm the delivery. (Be sure you enter the Freight Costs before you do the Ship
Confirm action – if you do the ship confirm first, then it’s too late to add the
freight costs!) The actual Charges will be calculated based on the formula and the
Freight Costs you just entered. If you have deferred the OM Interface at Ship
Confirm, then you may not see the charges until after that interface has run.
Confirm Freight Costs to Freight Charges Conversion
Now navigate back to the Sales Order Pad and query up your order. You will see
the Freight Charge = $19.50 (15 + 30% of 15) on the Main tab.
Freight Costs not included as Freight Charges
Inevitably, some freight costs are incurred after Ship Confirm which cannot be
invoiced to the customer. For example, a truck shipment is delayed at the
customer’s dock during unloading and the carrier assesses the shipper a detention
charge. Since the cutoff point for passing through freight costs occurs at the time
of Ship Confirm, there is no possibility of invoicing the customer for this extra
charge except manually.

OTHER BUSINESS SCENARIOS

Several other common business scenarios are provided below to assist you in
better understanding the setups required to map freight costs to freight charges.

Scenario 4: Standard Handling Charge

In this scenario, a distributor of music CDs wants to assess a standard handling charge of $1.99
per CD.
Navigate to the modifier form: Pricing > Modifiers. Enter the following
information:
Pricing Modifiers (heading)
Type Number Name Automatic

Freight and Spec. user defined user defined √

On the first line of the Modifiers Summary tab, enter the following: Pricing
Modifiers: Modifiers Summary form
Level Modifier Type Automatic Overrid Phase
e
Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 16
 Line Freight/Spec √ √ Line

Ch
Charges

Next, click on the Discounts/Charges tab and enter the following:

Pricing Modifiers: Discounts/Charges form
Charge Name Application Method Value

Handling Costs Amount 1.99

By using an application method of “Amount”, the pricing engine will assess a

handling charge of $1.99 for each item ordered. If instead we had used
“Lumpsum” as the application method, the pricing engine would assess a handling
charge of $1.99 per line (or per order if we had used an Order level modifier).
Next, click on the LINE QUALIFIERS button and enter the following:
Pricing Modifiers: Qualifiers – Line Level
Grouping Qualifier Qualifier Precedenc Operator Value
Number Text Attribute e From

1 Order Line Category accept default = Order

The setup for this modifier is completed. A handling charge of $1.99 will be
automatically applied to each item ordered. To verify that the Handling charge is
functioning properly, navigate to the Sales Order Pad and enter a new order. Enter
one line with a quantity of 10. Click the Action button and select Charges. The
Charges window should show a Handling Charge of $19.99.

Scenario 5: Freight cost markup applied to all invoices with freight terms of
Prepay & Add
A shipper wishes to assess a Freight markup of $50 per line for all shipments with freight terms of
‘Prepay and Add’. The markup will be assessed against the actual freight cost input by the
Shipping Department. Since the Freight costs will not be available until the order is shipped, the
company wants customer to see an estimated Freight Charge of $300 on each line of the order,
which will be replaced with the actual charge after shipping. In addition, a standard Handling
Charge of $10 will be added to each line of the order. All charges will be applied at the line level.
In this example, you need to set up a formula and a modifier with qualifiers.
First, set up the pricing formula and name it “Freight XX”. Navigate to Pricing >
Pricing Formulas > Formulas Setup. Enter the following:
Pricing Formula form (heading)
Name Description Formula

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 17

 Freight XX Freight Costs 1+2

In the Formula Lines region, enter the following:

Pricing Formulas form
Formula Pricing Pricing Component Step
Type Attribute Attribute
Context

Pricing Pricing Freight Cost 1

Attribute Attribute

Numeric 50 2
Constant

A pricing attribute can be anything used to price the item, from volume to item to
freight cost. The purpose of setting up this formula is to apply a markup to the
freight cost assigned at shipping. In this formula, the system will take the freight
cost (step 1) assigned at ship confirmation and add $50 (step 2) which equals the
final freight charge.
Now, when the formula “Freight XX” is selected in any pricing modifier, the $50
will be added to the Freight Cost at the line or header level, as defined in the
modifier.
Second, set up the pricing modifier for freight and special charges that should
appear on the order. Navigate to: Pricing > Modifiers. Enter the following:

Pricing Modifiers (heading)

Type Number Name Automatic

Freight and Spec. user defined user defined √

Next, select the Modifier Summary tab. On the first line, we will use the Freight
XX formula in the modifier. Enter the following:
Pricing Modifiers: Modifiers Summary form
Level Modifier Type Auto Overr Phase
matic ide

Line Freight and Spec. √ Line charges

Now, select the Discounts/Charges tab. Enter the following:

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 18

Pricing Modifiers: Discounts/Charges form
Charge Name Formula Application Value
Method

Freight Costs Formula XX Lumpsum

Note that the FORMULA used is the one you set up in the Pricing Formulas form.
The VALUE column is null because the freight cost amount will be input by the
Shipping Department at ship confirm.
Two more modifier lines must be created - one line for Freight Charges and one
line for Handling Charges. These lines will set up standard default amounts for
these charges in case Shipping neglects to enter actual freight costs. In the Modifier
Summary tab, enter the Freight charge line information as:
Pricing Modifier: Modifier Summary form
Level Modifier Type Automatic Override Phase

Line Freight and Spec. √ √ Line charges

In the Discount/Charges tab, enter the Freight Charge line information as:

Pricing Modifiers: Discounts/Charges form

Charge Formula Application Method Value
Name

Freight Costs Lumpsum 300

Repeat the same process for the Handling Charge. Enter the following:
MODIFIER NO. = Null, LEVEL = Line, MODIFIER TYPE = Freight and
Special Charge, START DATE = Null, END DATE = Null, AUTOMATIC =
checked, OVERRIDE = unchecked. In the Discount/Charges tab, enter the
information as: CHARGE NAME = Freight Costs, FORMULA = Null,
APPLICATION METHOD = Lumpsum, VALUE = 10. This modifier line will
modify the invoice to include an amount of $10 as a Handling Charge per order.
The standard Handling Charge will be assessed automatically; no manual input is
required at order entry or ship confirm.
The completed Modifiers Summary form should appear as shown:
Pricing Modifiers: Modifiers Summary form
Level Modifier Type Automatic Overrid Phase
e

Line Freight and Spec. √ Line charge

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 19

Line Freight and Spec. √ √ Line charge

Line Freight and Spec. √ Line charge

The completed Discount/Charges form should appear as shown:

Pricing Modifiers: Discounts/Charges form
Charge Name Formula Application Method Value

Freight Costs Freight XX Lumpsum

Freight Costs Lumpsum 300

Handling Cost Lumpsum 10

Next, you need to set up list qualifiers and line qualifiers. In this example, the List
Qualifier is used to apply the modifier to orders with Freight Terms of ‘Prepay and
Add’. The Line Qualifiers allow the pricing engine to apply the modifier to the
order lines according to the processing status (e.g. shippable, shipped, etc). Prior to
ship confirm the order status is “shippable” and the standard freight charge ($300)
will appear on the order entry “Charges form”. When the order status changes to
“shipped” after ship confirm, the actual freight cost plus the $50 markup will apply.
The Line Qualifiers are the triggers for this functionality.
To set up the List Qualifier as described above, click on the LIST QUALIFIER
button on the Modifier Definition form. The Qualifiers Group form appears, click
OK. Enter the following:
List Qualifiers (Header Level Qualifiers)
Grouping Qualifie Qualifier Precedenc Operator Value
Number r Attribute e
Context

1 Terms Freight accept default accept default Prepay and

Terms Add

The order must pass this List Level Qualifier before it will even look at the Line
Level Qualifiers. Line qualifiers add more detailed requirements for the order to
qualify for the Freight Charge. To set up the Line Qualifiers for this example,
select the first modifier line and click on the LINE QUALIFIER button. The
Qualifiers Group form appears, click OK. The Qualifier - Line Level Qualifiers
form will appear. Enter the following as qualifies for the ‘cost to charge conversion
modifier line:

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 20

LINE 1: Line Level Qualifiers
Grouping Qualifier Qualifier Attribute Prece Oper Value
Number Context denc ator From
e

1 Order Shippable Flag acce pt = Yes

defa ult

1 Order Line Category = Order

acce pt
defa
ult

1 Order Shipped Flag = Yes

acce pt
defa
ult

1 Order Freight Cost Type = Freight

Code acce pt
defa
ult

For Line 1, a grouping number is used because there are more than one line
qualifier that has to pass in order to apply the freight charge to the order. The
above table for Line 1 is read as follows: the Shippable Flag on the line must be
Yes, AND, the Line Category on the line must be Order, AND, the Shipped Flag
on the line must be Yes, AND, the Freight Cost Type Code on the Order must be
Freight. All of these qualifiers must be true to apply the qualifier to the line.
To set up the Line Qualifier for the $300 estimated charge, select the second
modifier line and click on the LINE QUALIFIER button. The Qualifiers Group
form appears, click OK. The Qualifier - Line Level Qualifiers form will appear.
Enter the following to create the qualifiers to apply to lines with Line Category of
Order and for Shippable lines that have not been shipped:

LINE 2: Line Level Qualifiers

Grouping Qualifier Qualifier Attribute Prece Oper Value
Number Context denc ator From
e

1 Order Line Category acce pt = Orde

defa r
ult

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 21

 1 Order Shipped Flag acce pt = No
defa
ult

1 Order Shippable acce pt = Yes

defa
ult

To set up the Line Qualifier for the Handling Charge, select the third modifier line
and click on the LINE QUALIFIER button. The Qualifiers Group form appears,
click OK. The Qualifier - Line Level Qualifiers form should appear. Enter the
following to apply the Handling Charge to outbound lines (Line Category = Order)
that are shippable:
LINE 3: Line Level Qualifiers
Grouping Qualifier Qualifier Attribute Prece Oper Value

N b C d F

Number Context denc ator From

e

1 Order Line Category acce pt = Order

defa
ult

1 Order Shippable acce pt = Yes

defa
ult

The setup for formulas and modifiers in this example is finally completed.
To verify that the setup for these Freight and Handling charges is functioning
properly, navigate to the Sales Order Pad and enter a new order. Click on the
Others tab and verify that the FREIGHT TERMS are ‘Prepay and Add’ – this is so
the list qualifier will be satisfied. Click on the Lines tab and enter a line. Click the
ACTION button and select Charges. The charges should show the estimated
freight charge of $300 and the handling charge of $10. These amounts are the
default values set up in the modifier. When the actual freight costs are input by the
Shipping Department at ship confirm, then the freight charge will change.
Book your order.
Now, navigate to the Shipping Transactions form and enter actual freight costs,
then ship confirm the order. Navigate to: Shipping > Transactions and find your
order. Click the Actions box and select Launch Pick Release and click GO button.
Also, make sure to autocreate a delivery either at picking or before ship confirming
Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 22
the order. Once a delivery is created, click the Delivery tab. If your order line does
not appear, use the Query Manager (flashlight icon) to find your order. When the
order line appears, click on the Actions box again and select Freight Costs and
press the GO button. Here is where you enter the actual freight costs for the
shipment. Set Cost Type = Freight and enter an Amount = 200 and click DONE.
Note if you enter any other cost types here, they will not appear as a freight charge
because you did not set up any other charges in the modifier for cost conversion.
We did set up a charge for Handling but it is not set for cost conversion.
Now, click on the Actions box again and select Ship Confirm and click on the GO
button.
Return to the Sales Order Pad and find your order. Notice that the Charges Line
total is now $260. This amount is Freight = $250 (actual freight charge + $50
markup from the pricing formula), Handling = $10.
Note: in this example, the estimated Freight Charge of $300 went away after
shipping, since the ‘Shipped Flag = No’ qualifier on that modifier line is no longer
satisfied. This means that if the Shipping Department neglects to input a Freight
Cost, the estimated charge would still disappear, because of this qualifier. If instead
you wanted the $300 charge to stay on the order even if the Freight Cost was not
entered, then you should remove that second line of the qualifier for the estimated
charge. Then, if the Freight Cost was not entered, the $300 charge would remain.
If however a Freight Cost was entered, the resulting charge from the formula would
replace the $300 charge if that charge was larger than $300.

TROUBLESHOOTING
There are a few things to watch out for when you try to implement Charges and
particularly the Cost to Charge conversion.

Qualifiers Not Working?

If you’ve set up some qualifiers for your charges and they don’t seem to be
working, try running the Pricing Report called ‘Build Sourcing Rules’. Every time
you use a new qualifier that you haven’t previously used, you are supposed to run
this program. See the Advanced Pricing User’s Guide for information about what
this program does.

Fixed vs. Estimated Charges

A common business case is to set up the Charges to apply ‘estimated charges’
automatically at order entry with the expectation that they will be replaced with
‘actual charges’ when the order is ship confirmed. To do this, you might set up a
Charge Modifier that applies an automatic charge at entry, qualified by the line
being shippable but in status ‘entered’. Later, when the cost to charge conversion
occurs at ship confirm time, the converted actual charge will overwrite the
estimated charge. This can be controlled by using the FIXED checkbox on the
Sales Order form Charges window. If you don’t want an applied charge to be
overwritten by the system, at cost to charge conversion or by any subsequent
pricing calls, check the FIXED box on the Charges window. Charges that are
manually applied or any automatic charges that are manually overridden get the
FIXED box checked automatically. The FIXED box should not be confused with

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 23

the OVERRIDABLE box, a viewonly checkbox which controls whether a user can
manually change the amount of the charge.

Watch those Names!

The names you use are critical to getting cost to charge conversion working. It’s
easy to get them confused. You enter costs in the Shipping
Transaction Form using the FREIGHT COST NAMES defined in Shipping
Execution, each of which belongs to a particular FREIGHT COST TYPE.
It is the FREIGHT COST TYPE that you need to use as the qualifier for the
Charge Modifier line, however, not the Name. In Order Management, you never
really see the Freight Cost Names except at Ship Confirm. To keep things simple,
you might want to just have one Freight Cost Name for each Freight Cost Type,
and have it be the same name.
Also, if you define additional Freight Cost Types (the lookups) (with their Freight
Cost Names and amounts) thinking you can then convert them into charges, this
can be done. But you have to tell Pricing that the new Freight Cost Type is to be
used as a Pricing Attribute (so you can put it in a formula) – otherwise you won’t
see it in the pricing attributes LOV in the formula, and so you won’t be able to use
it. Please refer to the Advanced Pricing User’s Guide for how to create a new
Pricing Attribute.

Which Charge Wins?

If you have multiple automatic Freight and Special Charge lists set up, then ONLY
ONE charge for each Charge Type and Sub-Type combination will be used by
Order Management. Which one will it be?
Which charge gets applied depends on INCOMPATIBILITY GROUP,
PRECEDENCE and PHASE on the modifier. If the INCOMPATIBILITY
GROUP is null (not specified) on the modifier, then the largest freight charge for
each distinct/unique combination of charge type/sub-type will get applied to the
order/line. If the INCOMPATIBILITY GROUP is not null, then within a
particular PHASE and a particular INCOMPATIBILITY GROUP, the freight
charge with the highest PRECEDENCE will be selected by the Pricing Engine if
the INCOMPATIBILITY RESOLVE CODE is set to "Precedence" for the phase.
If there is more than one freight charge eligible within a particular
INCOMPATIBILITY GROUP in a particular PHASE and the PRECEDENCE is
the same or if the INCOMPATIBILITY RESOLVE CODE is set to "Best Price"
for the phase, then the smallest charge will get selected. Amongst these selected
freight charges, Order Management applies the largest freight charge for each
distinct/unique combination of charge type/sub-type to the order/line.
If you are using Basic Pricing, then you can only use an INCOMPATIBILITY
RESOLVE CODE of “Best Price”. If you have licensed Advanced Pricing, then
you can choose to use an INCOMPATIBILITY RESOLVE CODE of
‘Precedence’.

Pro-Rating the Costs

If you enter Costs in ship confirm at the Delivery Level, the costs that transfer back
to the lines in OM are pro-rated to all the lines of the delivery, based on weight (if
present) or volume (if present) or quantity shipped on each line. Refer to the

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 24

Shipping Execution User’s Guide for how to get weight and/or volume on delivery
details.

Cost to Charge Conversion not working

Did you enter the cost? If you don’t enter Costs in ship confirm, then the cost to
charge conversion will not occur. If you enter a cost of zero, then the conversion
will take place based on the formula you set up. So if you want the charge to be
‘Cost plus $50’ and you enter a zero cost, then the charge generated will be $50.
But if you don’t enter a cost at all, then no charge will be put on the order.
Included items? Is the line you’re trying to get the charges onto an included item
in a PTO kit or model? If so, you have to do some extra setup to get the charges to
be created. The reason for this extra setup is that the costs come to OM from
Shipping as line level price adjustments, and the SHIP pricing event triggers the
Freight and Special Charges modifier to be applied – and since included items are
not priced, this doesn’t happen. A new OM profile option was introduced in
November of 2001 as part of OM Family Pack G called ‘OM: Charges for Included
Item’. If this profile is set to Yes, then charges can be applied for included items.
The default value for this profile is No. Remember that even if you set this profile
to Yes, the included items are not priced. Another way to get a cost-to-charge
conversion working on an included item is to use an order level modifier,
mentioned in the Important Note in the section on setting up cost-to-charge
conversion. See the Appendix of this paper for an example of setting up an order
level cost-to-charge modifier.
Check the Phase. The phase which you selected when you set up the cost-to-
charge conversion modifier line has to be one that is executed during the SHIP
pricing event. If you are using Basic Pricing, use the "Line Charges" phase. If you
are using Advanced Pricing, you can still use “Line Charges” or other phases that
you may define. If you choose some other phase, then the phase that you use for
the modifier line should be one that has the SHIP event associated with it. You can
check this by querying up the phase in the Event Phases Form. ( Navigation Path
is Setup -> Event Phases under Pricing Manager responsibility. ) Also make sure
that the phase has freeze override flag checked. Please check the
Advanced Pricing User's Guide to learn more about how to use this form.
Did the OM Interface run? If you defer running the interfaces (checkbox on
Ship Confirm), the OM Interface may not have run yet. Be sure it has completed.
Did the cost to charge still not work? Finally, you can run a debug utility which
is being released as a patch for bug number 1898493. This utility will help you or
Support see whether the cost got to Order Management and if so, why it didn’t get
converted to a charge properly. Please refer to the readme file of this patch for how
to execute this package. This patch will spool the debug output to a file, where you
can view the results.
To use this debug utility, you will need to know the line_id (order line id) of the
order line for which the freight charge (cost to charge conversion) is not coming
through. You can figure this out by using the menu option: HELP->
DIAGNOSTICS -> EXAMINE, after querying up the order line. You also need
to know the list_line_id (modifier line id) of the modifier that you set up to do the
cost to charge conversion. You can figure this out by using the menu option:
HELP-> DIAGNOSTICS -> EXAMINE, after querying up the freight charge

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 25

modifier, navigating to the lines block and selecting the modifier line that you want
to examine.
This debug utility will do the following things:
1. check if cost was inserted by Shipping
2. check that the phase freeze_override flag is not ‘N’
3. check that the qp_list_header_phases table is populated.
4. check if sourcing (attribute mapping) happened. If it did not, you need to run
the ‘Build Sourcing Rules’ concurrent request.
5. check if line is an included item of a model – if it is, the charge will not be
created.
6. check if Charge_Type_Code matches the Cost Type Code being selected at
Ship Confirm. It will also print out all other costs that have been passed to
OM.
7. check if this line has been Inventory Interfaced and OM Interfaced

CONCLUSION
The functionality described in this paper is current as of Order Management
Release 11i Family Pack F.
Freight and Special Charges as well as Freight Cost functionality have come a long
way from Release 11 Order Entry. They can now be used to implement all kinds of
complex business policies. But to make them work, you have to understand the
capabilities and the complex setup required. This Technical Brief has outlined the
differences between freight charges and freight costs as well as provided
information that you need to begin setting up and using Freight and Special
Charges within Order Management.

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 26

Appendix 1
Seeded Data:
Seeded Freight and Special Charge Types:
Following is a list of seeded data for Freight Cost and Charge Types in Pricing:

k Lookup Code Lookup Type Description

HANDLING FREIGHT_COST_TYPE Charges applied for Handling and pac

INSURANCE FREIGHT_COST_TYPE Charges applied for Insured Shipment

EXPORT FREIGHT_COST_TYPE Charges applied for Export/Import of g

DUTY FREIGHT_COST_TYPE Charges applied for duties

FREIGHT FREIGHT_COST_TYPE Freight movement charges

ADMINISTRATION FREIGHT_COST_TYPE Administrative Charges

MISCELLANEOUS FREIGHT_CHARGES_T Any miscellaneous Charges

YPE

Appendix 2
Order Level Cost to Charge Conversion:

One way to get costs converted to an order level charge is to create a

userdefined pricing attribute for order level costs, and then create a custom
sourcing rule to source that attribute by summing up the line level costs.
Finally, use that attribute in the formula that converts cost to charge.
As of the writing of this paper (August 2001), it is required that you fully
license Advanced Pricing to do this setup. There is discussion underway to
make this available to users of Basic Pricing.
Important Note: you should take care that you define your modifiers and
qualifiers so that either an order-level cost to charge conversion is done or a
line-level conversion is done for the same cost type, but not both.
Another Important Note: it is recommended that if you use order-level cost-
to-charge conversion, then you should use header level invoicing. This is so
that you can avoid invoicing the header charge before all lines on the order
have shipped.
Here are the steps to set this up:
First, create a new pricing attribute and call it Order Freight Costs. This has
not been seeded by Oracle Pricing. Pricing_Attribute23 can be used
provided it has not been used already in context: Pricing Attributes. Define
Pricing_Attribute23 as Order Freight Costs under context: Pricing Attributes in
the Pricing_Contexts flexfield defined under the application: Oracle Pricing.
Next, in order for a formula to use this new attribute, a sourcing rule must be
defined for pricing_attribute23. The Navigation Path is Pricing: Setup:
Attribute Mapping. Setup the sourcing rule for Pricing Attribute23 under
Pricing Attributes context in the following way:
Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 27
 Src type Package Function

FN API CUSTOMER_PKG1 get_order_level_

cost_for_FREIGHT(‘FREIGHT’, g_hdr.header_id)

You will need to write code for the function

get_order_level_cost_for_FREIGHT. Here is sample code for this function, or
you can write your own function to source this attribute.

Function get_order_level_cost_for_FREIGHT(p_cost_type_code
IN VARCHAR2,
p_header_id in number ) return number is
l_cost_amount number := 0; begin select
sum(adjusted_amount) into l_cost_amount from
oe_price_adjustments where list_line_type_code = ‘COST’
and header_id = p_header_id and charge_type_code =
p_cost_type_code and nvl (invoiced_flag, ‘N’) = ‘N’
and line_id in ( select ool.line_id from
oe_order_lines_all ool
where ool.header_id = p_header_id
and
nvl(ool.invoice_interface_status_code, ‘NO’) = ‘NO’ );

return l_cost_amount;
exception
when no_data_found then
return l_cost_amount;
end;

Next you have to setup a formula using this Pricing Attribute. Here s how this
setup might look:

Formula Header:

Name : OrderCost
Formula : 1

Formula Lines

Step : 1
Formula Line Type : Pricing Attribute
Pricing Attribute Context : Pricing Attributes Pricing
Attribute : Order Freight Costs ( i.e may
be Pricing_Attribute23)

Lastly, create a Freight & Special Charges Modifier that uses this formula.
The Modifier would look like this:
Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 28
Modifier Header:

Type : Freight and Special Charges List

Number : Ord_Freight_Cost
Name : Order Level Freight Cost.
Currency : USD
Version : 1.0
Active : Y (i.e. active checkbox should be checked ) Automatic
: Y (i.e automatic checkbox should be checked )

Modifier Line:

Level : Order
Name : Freight Costs
Automatic : Y ( i.e automatic checkbox should be
checked )
Application Method : Lumpsum
Pricing Phase : Header Level Charges
Formula : OrderCost

Freight and Special Charges 2/12/200312/18/2002 8:30 AM5:13 PM Page 29

Freight and Special Charges
November 2000
Revised December 2002
Author: Sandy Rota, Charlene Chandonia
Contributing Authors: Tim Conroy Kannan Tarakad,
Renganathan Sreenivasan
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