All of the following examples use a Pricing Type Calculation of Individual (Rate each individually). For examples using alternate Pricing Type Calculations, go to the Advanced Price Book Calculation Examples section.

Choosing a Pricing Type

A customer sells cat collars, and is determining which Price Book to use. The customer sets up the following Price Books:

	Pricing Type
Pricing Tier Lower Limit	Linear Tier Rate	Marginal Tier Rate	Fixed Tier Rate
0	$5	$5	$180
100	$4.50	$7	$275
200	$4	$9	$400

Pricing Type	Calculation
Linear	If the total quantity sold was 50 cat collars, the quantity would fall into the lowest tier of the Price Book, and each cat collar would be $5. If the quantity purchased the following month increased to 100, the total quantity would fall into the middle tier (because for Linear Price Books the quantity must be greater than or equal to the Lower Limit), and the rate would be $4.50 per cat collar. If a customer purchased 200 or more cat collars, the rate would be $4 pr collar.
Marginal	If the total quantity sold was 100 cat collars (because for Marginal Price Books the quantity must be greater than the Lower Limit to be included in a tier), the quantity would fall into the lowest tier of the Price Book, and each cat collar would be $5. If the quantity purchased the following month increased to 150, the first 100 collars would be charged at a rate of $5 per collar. The next 50 purchased would fall into the middle tier of the Price Book, and be charged $7 per collar. The blended rate for the purchase would be $5.67 per collar. If a customer purchased 250 cat collars, the first 100 collars would be charged at a rate of $5 per collar. The next 100 purchased would fall into the middle tier of the Price Book, and be charged $7 per collar. The last 50 purchased would fall into the top tier of the Price Book, and be charged $9 per collar. The blended rate for the purchase would be $6.60 per collar.
Fixed Rate Per Tier	If the total quantity sold was 50 cat collars, the quantity would fall into the lowest tier of the Price Book. The total amount for the cat collars would be $180, meaning each individual collar has an effective rate of $3.60. If the quantity purchased the following month increased to 100, the total quantity would fall into the middle tier (because for Fixed Rate per Tier Price Books the quantity must be greater than or equal to the Lower Limit). The total amount for the cat collars would be $275, meaning each individual collar has an effective rate of $2.75. If a customer purchased 200 or more cat collars, the total amount would be $400, no matter how many collars they purchase. The effective rate would be amount ($400) / quantity sold.