Understanding Advanced Preferences Describing Advanced Preferences by Ayman Refat - March 14, 20180 Understanding Advanced Preferences Concept You use preferences when you have consistent business requirements that differ from your regular sales order processes. If you have an occasional variance, you can enter the variation manually. The ability to use additional attributes that are related to items and customers for establishing preferences is often required, similar to the concept of the JD Edwards EnterpriseOne Advanced Pricing system. The JD Edwards EnterpriseOne Advanced Preference system enables you to have multiple lines of details behind each line of the level breaks. The system has additional flexibility that you can use to set up complex preferences to match the complexities of your sales order process. You can still use base preferences during sales order entry. If base preferences are already set up and you do not want to set up an advanced preference (for example, delivery date,) you can use the base preference. The system searches for base preferences first and then for advanced preferences. Therefore, if both types of preferences are set up, the advanced preference overrides the base preference. Procedure In this topic, you will learn the advanced preference process flow and the advanced preferences that affect pricing and inventory commitments on sales orders. Step Action This diagram illustrates the process to use advanced preferences with sales order processing. You must set up and activate advanced preferences before the system can use the information on sales orders. When you enter sales orders, the system searches for preference information. The system applies the preference information and you continue to process the sales order through the sales order cycle. Step Action The system contains three advanced preferences that affect sales order pricing: • 17: Extended Terms • 18: Sales Price Based-on Date • 19: Gross Profit Margin Target Step Action For business reasons, you can offer extended payment terms if customers purchase certain items or combinations of items. The extended terms advanced preference enables you to offer customers more favorable payment terms when purchasing items that are associated with a group of products or basket. You use baskets to group items for pricing purposes. The extended payment terms preference is resolved when you apply the basket-level adjustments by running the Order and Basket Level Pricing program (R42750). The extended terms preference works only with standard baskets, which are defined in the item master and item branch/plant records. In this example, a customer places an order for items included in basket A. You enter the sales order, and the total amount for the order exceeds 10,000 USD. You run the R42750 program to apply basket-level adjustments to the sales order. The system applies the extended terms information to all order lines in the basket, and the customer receives payment terms of net 60 days instead of net 30 days. Step Action You use the sales price based-on date preference to guarantee or freeze a price for an item or item group for a specified time. The preference enables you to have control over the price effective date, which means a guaranteed price can be achieved by using the correct price effective date for a specified time period. The sales price based-on date preference overrides all adjustments for the time period that the preference is effective. In this example, you guarantee that the May sales price for a specific item for a customer for all sales orders the customer places in June. The customer orders the item in June. You enter the sales order and the system searches for advanced preferences. The system applies the May sales price to the item on the sales order. Using the advanced preference enables you to avoid errors by the order entry clerk. The sales price based-on date preference enables you to: • Create a preference for a sales price based-on date that is not associated with a pricing unit of measure. • Create a preference for an actual date. • Enter a price effective date on the sales order line. Step Action In many industries, the price of a customer order is based on a target gross profit margin. The gross profit margin advanced preference enables you to set up minimum and maximum targets when defining the preference or to define a target profit margin. The profit margin can vary for different items and customers. When quoting a price for a customer, the sales representative often needs to calculate what the price must be to meet the target profit margin. Therefore, the sales representative needs to know whether a specific order line is within the target profit margin. Furthermore, when entering a sales order, the sales representative needs the ability to enter a profit margin percentage per line item and then have the system calculate a price based on the profit margin percentages that are entered. In this example, you set up a profit margin target of 20 percent. You enter the sales order and the system searches for advanced preferences. The system calculates the item price based on the 20 percent target profit margin. The system uses this formula to calculate gross profit margin: (Unit Cost x 100) / (100 – gross profit margin percentage). If the unit cost of an item is 100 USD, the calculation would be: (100 x 100) / (100 – 20) = 10000 / 80 = 125. The system applies the 125 USD item price to the sales order line. Review the item price on the sales order. If you set up a range for the target margin using minimum and maximum percentages, you can manually revise the item price. Step Action The system contains three advanced preferences that affect inventory commitments. • 03: Delivery Date • 05: Inventory Commitment • 22: Order Prep Days Step Action The delivery date advanced preference calculates the number of days that the items are in transit and uses the value to determine the ship date. The system starts with the requested delivery date, subtracts the number of in-transit days, and determines the ship date for the order line. The system applies the delivery date preference to each item in the sales order detail. Step Action The inventory commitment advanced preference enables you to: • Specify the branch/plant from which an item is shipped. • Define the branch/plant that supplies an item based on customer, customer group, item, and item group. • Indicate the percentage of an order to be filled from each branch/plant. • Specify the mode of transport and carrier information on the sales detail line. • Source inventory for future orders. Use the inventory commitment preference to perform sourcing all of the time, regardless of the commitment date of the branch/plant in the sales order header. You can specify one or more branch/plants that the system uses as the source of supply for a product. You can also indicate a minimum percentage of any order that must be filled for a branch/plant to be selected. The system applies inventory commitments to each item in the sales order detail. Use the branch/plant in the order detail to override the inventory commitment preference. Step Action The order prep days advanced preference ensures that you accurately determine the number of days that are required to prepare a sales order for shipment. The preparation of an order can include: • Picking • Packaging • Labeling and coding • Shipping The system starts with the requested delivery date, subtracts the order preparation days, and determines the pick date for the order line. The system applies the order prep days preference to each item in the sales order detail. Step Action The commitment preferences can be used in conjunction with each other. For example, you may need one day to package an item for shipping and three days in transit to deliver the item. If the customer-requested date is June 10, the system subtracts four days to prepare and deliver the item. The system would use a pick date of June 6 and a ship date of June 7, assuming that a weekend is not included. The system commits the inventory to the order for the pick date of June 6. Step Action The system contains additional advanced preferences that can affect sales order processing: 01: Order Header Defaults 02: Order Detail Defaults 04: Print Messages 21: Sales Commission 34: Next Order Status Step Action This flowchart illustrates how the advanced preference setup components work together. The preference hierarchy specifies the sequence and intersections for the item, customer, item group, and customer group combinations. You use the preference hierarchy to identify how you want to define the preference detail information. When you create a new preference name, the system stores the value in user-defined code (UDC) table 40/TY. The 2 in the Special Handling Code field indicates that the value is related to a preference name rather than a price adjustment. The preference name contains: • Item and customer groups, which are optional. • Preference hierarchy. • Advanced preference type. Every advanced preference has a specific numeric value associated with it. • Quantity level break or no breaks. Depending on the type of preference, a quantity level may not be required. For example, Next Order Status does not require a quantity level. • Preference History. When you select the Preference History option, the system records the preference information on sales orders in the Price Adjustment Ledger File table (F4074). When you create a new preference schedule, the system stores the value in the UDC 40/AS table. The 1 in the Special Handling Code field indicates that the value is related to a preference schedule rather than to a price schedule. You can use one or more preference names to make up a preference schedule. The preference detail options are based on the preference hierarchy that you define in the preference name. You specify the customer and item-specific information in the preference detail. The preference detail includes: • Effective and Expired Dates • From Levels • Threshold UM For each preference detail line, you must also define the information that is specific to the preference type. The preference values determine the override information for the preference. To access the preference values, select the Pref Details option from the Row menu on the Preference Detail Revisions form. Each advanced preference has different information that is required for the preference. The fields that are available on the form are determined by the preference type in the preference definition. The system uses the preference schedule that is identified in the system constants unless an override preference schedule is attached in the processing options of the Sales Order Entry program (P4210). If the system does not find a preference schedule or the preference type is not defined in the schedule, the system uses base preferences. The system resolves advanced preferences based on the sequence in the preference schedule. In summary, the JD Edwards EnterpriseOne Advanced Preference system can affect pricing and inventory commitments on sales orders. You set up and activate advanced preferences to override standard processing information during the sales order process. End of Procedure.