Overview
With attribute-based pricing, the purchase price is based on an attribute of the product being ordered. It is usually applied to the pricing of a potency item which is an item that has a concentration of an active ingredient. This potency, or concentration, of active ingredient, can be used to affect the amount of material that is required in production or the amount that is paid to a vendor based on the concentration level.
Purpose
Every product can have different factors that produces various levels of quality for manufacturers. Microsoft Dynamics 365 Finance and Supply Chain Finance has the functionality with its Batch Attributes and Attribute-Based Pricing to record an actual measurement as an attribute and then calculate a price accordingly. This gives a customer the opportunity to opt for lower or higher quality items and thereby influences the price paid.
Example
Company B is a manufacturer of apples that sells to grocery store chains. It sets up a quality test that will record measurement for apple sweetness.
Apple sweetness is measured by Brix degrees, which is the measurement of sucrose in the fruit. For apples, an acceptable Brix degree could be as low as 9 or as high as 14, with 14 being the sweetest. Company B sells apples at six prices based on the Brix measurement.
Here is a table of the different calculations of pricing based on the selected attribute, Brix degrees. The target Brix level is between 9 and 12.
In Dynamics 365
Microsoft Dynamics 365 F&SCM has the functionality with its Batch Attributes and Attribute Based Pricing to record an actual measurement as an attribute and then calculate a price accordingly.
On this screen click “New” to create a new Attribute Based Price. Enter name
Select ‘Add variable‘ to configure equation element types. Once the pricing data is configured, all it takes is an equation, and pricing should begin calculating on inbound inventory.
After setting up the formula, batch attributes should be defined under Product Information Management. Define some attributes (integer, date, etc).
