Customer discount for 80,000 pound shipments by tractor/trailer

[Eric Lehti]

I have a question for you who ship your products by tractor/trailer, and you like to grant your customer(s) a cash discount for purchasing full tractor/trailer loads at the legal maximum of 80,000 pounds gross vehicle weight.

Six years we implemented a method which has a weakness. Sales orders F4201/F4211 are assigned to specific truck numbers, based on that truck going to a specific region of the country on a specified date.

If the tractor/trailer reaches the maximum weight of 80,000 pounds, we allow a 10% discount on all sales orders on that trailer. All customer orders on that full trailer get this discount.

We have a custom RPG process that reads F4211, summing the weight of items to be loaded on each truck. If the trailer weight qualifies, each order will be flagged as eligible for discount. A subsequent RPG program writes 1-to-many lines to F4211 for each order with negative dollars in SDAEXP field, using reserved line numbers (SDLNID) of 500,000 and above, (lines 500, 501, etc.), as our sales orders have fewer than 499 lines.

The weakness of this technique is that the cash discount is NOT to the individual items, but on the product family. I mean to say, 37 individual items (F4101 item master) of a product family on a sales order will create ONE mixed trailer discount line in F4211, line number 502 (502000). This discount line is the aggregate of those 37 different products. This makes it impossible for us to compute the "average selling price" on items. The product family is not a discrete item in F4101, but is an attribute (field IMSRP3 in F4101)

The real solution, I guess, would be to allow a 10% discount on EACH item ordered on the sales order. If line 1 is $100 in F4211 for Widget1, write discount line 501 of <$10> for Widget1 to F4211.

Or to have a System i module integrated with JD Edwards that enables the user to manage tractor/trailer shipments and calculate discounts.

So how do you do it? How do you factor "cash discount" into your average selling price?
ericl 918-879-6036 central time;

 

[curryj]

We track the discounts by item. I wouldn't call your example a "cash discount" which, strictly speaking would be a reward offered for paying the invoice within terms. We wouldn't record that by item. But a discount like yours, which is really a volume discount, would be handled in our environment by an advanced price adjustment, which would apply the discount and create journal entries at the order line level, enabling us to calculate the average net selling price of the items, the profitability of the customers, etc.
I think you could eliminate a lot of the customization by using advanced pricing, although it wouldn't handle the association of the orders to a trailer. Also, I haven't used advanced pricing to discount based on weight, but there is a formula method available which is very flexible.

 

[Eric Lehti]

Jon Curry, thank you for your reply, which helps me see this challenge from another angle. We began using using Advanced Pricing in 2008 to offer 14 levels of pricing on 20 product categories, and also contract pricing.
I will ponder what you said. EricL

 

[curryj]

You're welcome. The more I think about this, the more I think it could be a good solution. You could set up the price adjustment to be based on an Order Detail Group, and you could define the Order Detail Group to be based on a field in the F4211 that you're not using for anything else, say Price Code 1, for example. (I'm not sure if that particular field is in your version.)
Then when your custom software determines that a certain trailerload qualifies, it could write an X, or whatever the magic character is that would trigger the adjustment, in that field on all the order lines on the trailer, and then call J42950 Update Sales Price / Cost, if your existing process doesn't already run that job at a later step.
Obviously I have no idea if this would work in your environment, but I thought it was worth mentioning.

Good luck with it.