Strategy Designer-Cost+ Absolute (Reference)
- Mike Deskis
- Ioana Kocurova
This type of cost-plus pricing strategy, or markup pricing strategy, is a simple pricing method where a fixed absolute value is added on top of the production cost for one unit of product (unit cost). This pricing strategy does not consider either consumer demand or competitor prices.
The primary attributes of this strategy are values that are being extracted from the CostPlus Company Parameter table (show below):
Absolute Adjustment
Provides the constant $ adjustment added to the Product Cost value.
The CostPlus table can be defined for Global usage or can be created for specific local conditions by geographic or industry. The default version identifies these absolute values (either fixed amount or percentage) by Industry, Business Unit and Product Group.
Product Cost
Identifies where the product cost value for a product can be found, this lookup value is extracted from the PriceSettingConfig Company Parameter table (show below):
In the above example, we notice that Cost+ lookup will use the ProductCosts product extension table and the Cost column for all product cost values.
If we follow this lookup to the Product Costs table, we will find the Cost value for our products: