Pricing Default Rules

On PO01.1 You'll need to look at the Cost Default tab. In the Cost or Vendor First it sounds like you want it to be 1 (Vendor First then Cost). If it's 0 it will look at the priorities first then search for a vendor.

It's set to 1 already. Oh well, we'll figure something out.

Hey Kat,
Can you clear up the Cost Default tab first two options for me, please? On the Cost or Vendor First option, I've always set it to "0" but now I'm questioning that and I think I've thought about it too much! What, exactly does "Cost or Vendor First" mean??!! The help text on it doesn't help much... "The default for cost is either cost or vendor first" doesn't mean much to me.

So it's on PO01.4 now but there are two tabs. First Tab is the Cost Default - ignoring the first two fields for the moment - there are "Cost Default Order" where you can tell Lawson what pricing gets priority over what. To the right there is a "Vendor Default Tab" On that tab you tell it where to pull the Vendor from first.

So If you say to select the Vendor from the Req Header over everything else and on the Cost tab you say to pick the price from the Contract Orders over everything else - there's a clash. The req says to pick Vendor A for $10 but the Contract order says use Vendor B for $5.

The first field on the Cost Tab is where you tell it which tab to listen to first. If you have 0, the req will be for Vendor B for $5. If you have 1, the req will be for Vendor A for $10. Generally speaking we only have 1 vendor 1 cost per item, so this only comes into play rarely and we have it set to find the Vendor.

The second field on the Cost Tab is if you have multiple active PO13s for an item and isn't something I have dealt with so "grain of salt" If you have multiple PO13s do you want the system to pick the one that is set to default or do you want it to change based on whichever is currently cheapest?

That explanation is VERY helpful and reinforces what I THOUGHT the first two fields on the Cost Default tab meant. I was not very sure, though, but through some trial and error, that's close to what I had come up with.

When the Lawson system says "Cost or Vendor..." it means "lowest cost of vendor..." and that's where I was not sure. If you are telling them system to use "cost first" that means use the lowest cost first. Right?? They sure do make things confusing sometimes!

We only have one cost per item master item, so I've got no real world experience with this. But if you say Cost First - it goes in the order of the Cost Default tab. So if you have Contract Order 1 and Catalogs, Quotes 2. On PO25.6, Contract says $10, Catalog Quote says $5. RQC will order it with the Contract Vendor Agreement at $10 not $5.

The benefits to going with "vendor first" is that if you are multi-company and multi-location and are not standardized for sourcing from one vendor or the majority of your item master items do not have a corresponding PO25 agreement - the system can drive replenishment off of the IC12.2 replenishment vendor (or vendor agreement or req header as noted in the vendor default tab).  This reduces the need for complex contract/vendor agreement participant and priority setup and can provide easier control over replenishment vendor and price depending on who is managing the process.  But...It also can be a lot messier!  

If you have low Contract/PO25 adoption for your item master items, "vendor first" might be your best option until you can increase the number of items you have set vendor pricing identified in the system (item setup completeness).  

Most organizations use the "Cost first" option, which will follow the process as Kat noted below.  Another note is that last cost is not the last cost paid (via invoice), it's the last cost noted on the IC12 record (if there is one) for that company/location/item combination.