Attribute base Purchase price in D365

Hello everyone and welcome to my new blog.

In this blog, we are going to learn about batch attribute base purchase prices.

The main purpose of batch attribute price is “Pay on potency” or quality base price.

For example, ?A company orders a solvent for paint or raw material whose order purchase price depends on the quality or concentration of the product at the time of delivery. In such a scenario, we can use batch attribute base pricing.

Pre-requisite setup:

This feature required three main configuration needs to be in place.

1.?????Product setup

• Item must be batch tracking.
• Attributes must be set up on the item level.

2.?????Attribute base pricing formula

3.?????Trade Agreement

Setup Batch Attribute:

First, we have to set up a batch attribute.

Go to Product information management > Category and attribute > Batch Attribute.

Create a new batch attribute here and defined the min & max range for the attribute with the target value.

• The minimum and maximum ranges for an attribute of the?Integer?or?Fraction?type.
• The target value for the attribute. This value is the optimal value of the attribute, and it applies to all attribute types.

I have used attribute type as a fraction because in my case the quality can be between 0.8 till 1.5. You can also use integer type as well.

Product setup:

Now, Create and release a new product in which batch tracking will be enabled.

The next step is to assign the batch attribute to the product.

Go to Manage inventory > Batch attributes > Product specific

Click New and select the Table in the attribute code and select the batch attribute from the dropdown “Concentration”

Now go back to the manage inventory tab and defined this attribute as a potency attribute.

Here we have completed the product setup for batch attribute price.

Attribute Base pricing Formula:

The next step is to define the formula or pricing rule for the items.

Go to Procurement and sourcing > Prices and discounts > Attribute-based pricing details

Click New and define the formula.

In the?Equation element type?field, select the type of equation element from the following options:

• Transaction quantity?– The transaction quantity of the inventory item.
• Unit price?– The unit price of the inventory item.
• Batch attribute - Actual?- The actual percentage of potency for an inventory batch.
• Constant?- The standard percentage of potency for an inventory batch.
• Select the element type?- The default value for the type of equation element.
• Batch attribute - Target?- The target percentage of potency for an inventory batch.

Trade Agreement:

The next step is to create a trade agreement.

Go to Procurement and sourcing > ?Prices and discounts > Trade agreement journals

Click New and create new journal lines.

In journal lines,

• Select the Items from the drop-down “PM-001”
• Define the unit price
• Select the Attribute base formula “0002”.
• Post the journal

Procurement Process

We have completed all the pre-requested setup. Now create a new purchase order and select the items “PM-001” which we created and setup for this demonstration.

Confirm the purchase order and go to Product receipt for posting the GRN.

Perform the registration process and define here the batch number along with actual value “Quality of the items”.

Here, I have defined 1.2 which represents the quality of the product.

Note: we can not define the value below 0.8?or above 1.5 as we have an attribute range in between these two values.

?Go back to GRN form and define the GRN number and post the GRN against of purchase order.

Now if you go to the vendor invoice, You will notice that the line amount has been changed

According to purchase unit price "5", the line amount should have been “50”. But the system has adjusted the unit price from 5 to 12 as you can see in the above picture.

Let’s see the calculation that systems does to adjust the unit price.

We have defined the equation to derive the price “A * B* C /D”.

In this equation:

A: Unit price which is 5

B: Batch attribute actual value which is?1.2 we register this value.

C: Constant value 2

D:?Batch target value which is?1

So according to the equation systems calculate the adjusted unit price as below:

5*1.2*2 / 1 = 12 unit price.

That's all for the day.

I hope you guys will like this blog. If you have any feedback feel free to share

Regards

Muhammad Shoaib Hussain

D365 Supply Chain Management | Production | Retail | Finance Consultant.

Contact # +44 7513826768

Email # [email protected]