Customer Discounts: Calculation of Prorated Discounts

You can prorate discount sequences if the Prorate Discounts check box is selected on the Discounts (AR209500) form. For prorated discount sequences, the system prevents customers from attempts to split a sales order to get greater discount amount or a larger quantity of free items. The functionality of prorated discounts is applicable to discount sequences with discountable quantities or discountable amounts, such as when you want to give your customers a discount of $5 for every 10 units purchased.

For example, to determine the discount for a discountable quantity larger than one break point but less than the next break point, the system treats the discountable quantity as a combination of break point quantities and uses the largest possible break point quantities. It then calculates the discount according to the break points used.

Example 5: Consider a prorated group-level discount with tiers based on quantity. The sequence defines the discount with the following tiers:

• 10 units: 1 unit of the free item
• 20 units: 2 units of the free item
• 40 units: 3 units of the free item

A sales order for 50 units would yield 4 units of the free item, computed as 3 (for 40 units) plus 1 (for 10 units). For an order of 70 units, the discount is calculated as 6 units of the free item: 3 as the discount for 40 units, plus 2 as the discount for 20 units, plus 1 as the discount for 10 units.