Pricing Exercise ECC 6

8/7/2019 Pricing Exercise ECC 6

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Pricing using the Condition Technique

1. Determine Pricing Procedure: Document Pricing Procedure

The SAP systems allows for a unique pricing procedure to be defined for each combination of

sales document type and customer. To see how the document type helps determine the pricingprocedure, we need to look at configuration data. To access configuration data, follow the menupath:

ToolsCustomizingIMGEdit ProjectThis will produce the following screen:

Because SAP is so complex and configuration is such a challenge, the implementation projectteam can define different projects that address only certain aspects of the implementation. Wewont be making any configuration setting, and will use the SAP Reference IMG, whichcontains all configuration options, to look at the configuration settings for sales orders.

After clicking on the SAP Reference IMG, the following screen will appear:

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Click on SAP Reference IMG


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This screen provides the menu system for configuration, similar to the menu system fortransactions except that rather than running transactions that store and process data, the IMGmenu paths run transactions that configure the SAP system and determine how it will function.

To see the system setting for sales order documents, follow the menu path:

Sales and DistributionSalesSales DocumentsSales Document HeaderDefineSales Document Types (click clock icon )

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This will produce the following screen:

Scroll down to order type OR (Standard Order), select it by clicking on the box to the left of it,then click on the display icon ( ). This will produce the following screen:

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Click on clock icon to start transaction

Scroll down to OR (Standard Order)Select it, then click on the display icon


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Click on the field for the pricing procedure, then click on the search icon ( ) to see the pricing

procedure options:

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Document pricing procedure A is selected.Click on the field for the pricing procedure, then clickon the search icon to see the pricing procedure options


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The entry A isnt really a pricing procedure, but a code that is used to determine the pricingprocedure. SAP delivers the system with 12 predefined document pricing procedures (codes),

and the user can define their own.

Close the pop-up window by clicking on the close icon ( ), then click on the exit icon ( ) toexit the change order type transaction screen.

Click on the exit icon ( ) twice to get back to the SAP Easy Access screen.

2. Determine Pricing Procedure: Customer Pricing Procedure

Next, we will set a new customer pricing procedure for customer## Houghton Health Club.Again, we are not defining the actual procedure, but setting a code to allow the SAP system to

determine which pricing procedure to use.

To reset the pricing procedure for## Houghton Health Club, follow the menu path:

Logistics Sales and DistributionMaster DataBusiness PartnerCustomerChangeComplete

which will bring up the following pop-up window:

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Review the predefined document pricingprocedures, then click on the close icon


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To find ## Houghton Health Club, click on the Customer field, then click on the search icon (

) to bring up the search window:

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Click on the Customer field,then click on the search icon

Enter## for the search term, thenClick on the enter icon


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Enter## for the search term, then click on the enter icon ( ) to get a list of your customers:

Double-click on ## Houghton Health Club to select it, then enter the following data:

After entering the appropriate data, click on the enter icon ( ) and the following screen willappear:

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Double-click on ## Houghton Health Clubto select it

Enter:##FS for Company code## FS for Sales OrganizationDI for Distribution ChannelSB for DivisionThen click on the enter icon


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Click on the Sales Area Data icon and the following screen will appear:

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Click on Sales Area Data


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We want to use a unique pricing procedure for this customer, so we will change the CustomerPricing Procedure (which again, is really just a code to select the pricing procedure) from 1(standard) to Z (FS Standard), a code that has been created especially for Fitter Snacker. Afterchanging the Customer Pricing Procedure to Z, click on the save icon ( ) to save the change.This will return you to the initial screen for Customer Change:

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Change the Customer Pricing Procedurefrom 1 (standard) to Z (FS Standard)


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Click on the cancel icon ( ) to close this screen and return to the SAP Easy Access screen.

3. Define Pricing Procedure Determination

At this point, creating a standard order for customer## Houghton Health Club will result inDocument Pricing Procedure A and Customer Pricing Procedure Z. Again, these are not actually

procedures, but codes that are used to determine which pricing procedure to use.

Specifying the pricing procedure for the combination of Document Pricing Procedure A andCustomer Pricing Procedure Z is done in configuration. To make this configuration setting,follow the menu path:

ToolsCustomizingIMGEdit ProjectThen click on the SAP Reference IMG icon:

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Click on the cancel icon to exit the screen


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Then follow the menu path:

Sales and DistributionBasic FunctionsPricingPricing ControlDefine AndAssign Pricing Procedures (click clock icon )

Which will produce the following pop-up window:

Double-click on Define Pricing Procedure Determination and the following screen willappear:

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Click on the SAP Reference IMG icon

Double-click onDefine Pricing Procedure Determination


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Click on New Entries icon and you will be given a blank screen to enter a new set of parameters

to determine a pricing procedure. Make the following entries:

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Click on New Entries

##FS for Sales OrganizationDI for Distribution ChannelSB for DivisionA for Document Pricing ProcedureZ for Customer Pricing ProcedureZFSPRC for the Pricing Procedure

Then click on the save icon


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This entry tells the SAP ERP system that when creating standard sales order (type OR) in SalesArea:##FS (sales organization)DI (distribution channel)SB (division)

for a customer with Pricing Procedure (code) Z, pricing procedure ZFSPRC is to be used.

Click on the save icon ( ) to save this entry, then click on the exit icon ( ), which will returnyou to the following pop-up window:

Click on the cancel icon ( ) to close this screen and then click on the exit icon ( ) twice toreturn to the SAP Easy Access screen.

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4. Test the Basic Pricing Procedure

We can now test the pricing procedure determination process by creating a sales order for

Houghton Health Club. To do this, follow the menu path:

Logistics Sales and DistributionSalesOrderCreatewhich will bring up the following screen:

Enter the information shown above, click the enter icon ( ) and the following screen willappear:

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EnterORfor Inquiry TypeEnter##FS for Sales organizationEnterDI for Distribution ChannelEnterSB for DivisionThen click on the enter icon

Click on the Sold-to party field,

then click on the search icon ( ).


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The screen should have the cursor already in the Sold-to party field. Click on the search icon (

) and the following pop-up menu will appear:

Enter your Data Set Number (##) for the search term and click on the enter icon ( ) and a listlike the following will appear:

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Enter## for your search term,then click on the enter icon ( )

Double-click on ## Houghton Health Club


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Double-click on the entry ## Houghton Health Club to select it. When you do, the customer

number will be entered automatically:

Next, click on the Purch.order no. field and enterHHC1##. Now we need to enter material ##NRG-B. To do this, click on the first material field, then click on the search icon:

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The customer number for## Houghton Health Club is displayed.EnterHHC1## in the Purch. Order no. field

Click on the first material field, then click on the search icon


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Click on the first material field, and then click on the search icon to call up the following searchpop-up window:

Find the tab with Material by Material Group, and then click on the arrow ( ) next to the

Material group field, which will call up a second pop-up window:

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Select the tab Material by Material GroupClick on the arrow next to the material groupfield to find the tab.Then click on the arrow next to the materialgroup field

Double-click on Sales to select it.


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Double-click on the SALES group to select it, then enter##* for Material description:

After selecting the SALES Material group and entering ##* for material description, click on theenter icon ( ) and a list like the following will be displayed:

Double-click on the ## NRG-B snack bar to select it, and the material number will be enteredautomatically:

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Enter##*for Material description

Double-click on ## NRG-B to select it


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With the material number entered automatically, enter10 for Order quantity, then click on theenter icon ( ):

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The Material number is automatically entered. Enter 10forOrder quantity, then click on the enter icon ( ).


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Notice that SAP has called up information about the Sold-toparty and Material from the database, and has calculated atotal price for this order.

Select the first line by clicking on the square next to it ( ),

then click on the item conditions icon ( )


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After clicking on the enter icon ( ), the SAP ERP system will call up information from thedatabase about the customer and the material being sold. It will also run pricing procedureZFSPRC. This procedure calculated a total price for the order of $2,950. To see how this price

was calculated, click on the square ( ) next to the material to select it, and then click on theitem conditions icon ( ) and the following screen will appear:

The current pricing for 10 cases of NRG-B is $295 per case, for a total order price of $2,950.The cost of these snack bars is $2,.448, so the company should make a profit of $50.20 per case,or $502 for the order.

The pricing procedure used a standard price of $295 per case for the NRG-B bars. To see where

this price is set, create a new session by clicking on the create session icon ( ). In the new

session, follow the menu path:

Logistics Sales and DistributionMaster DataConditionsSelect UsingCondition Type Display

which will produce the following screen:

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Review the pricing details, thencreate a new session by clicking onthe create session icon


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After clicking on the enter icon ( ), the following pop-up window will appear:

Select Material with release status, which means we are looking for a general price for thismaterial, and click on the enter icon ( ). This will produce the following screen:

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Select on Material with release status,

then click on the enter icon

Enter Pricing Condition PR00.DO NOT USE YOUR DATASET NUMBER HERE. THEPRICING CONDITION IS PR00(P R Zero Zero) FOR ALLSTUDENTS.


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Enter your sales organization (##FS), DI for distribution channel, and ##F110 for material, thenclick on the execute icon ( ) and the following screen will appear:

This screen show that the base price for## NRG-Bbars for the direct distribution channel insales organization ##FS is $295. This price was set on 08/11/2004 and is valid until 12/31/9999.PR00 is a price condition, and the entry shown above is a condition record. A condition recordis the data that is used for determining the actual value for a pricing condition. Pricing is onetype of condition. Other conditions can be used to set discounts and surcharges.The validity dates can be used to manage price changes. Suppose the price for the ## NRG-Bbars will be changed in the future. This can be accomplished automatically by changing thevalidity period for the current condition record and then creating a new condition record for thenew price. For example, suppose the price for ## NRG-B bars is to increase to $305 per case on

January 1, 2009. Two condition records would be needed. This is shown in the followingfigure:

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Enter##FS for Sales Organization,DI for Distribution Channel and##F110 for Material (this is the materialnumber for the ## NRG-B bars)Then click on the execute icon


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Click on the exit icon ( ) until you are back at the SAP Easy Access screen. Switch back to thesession with the sales order. You should still be in the pricing screen:

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Price is $295 per case until

01/01/2009, when it changes to$305 er case


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Note that the condition record information is available from the sales order screen. Select theline with the pricing condition PR00 and then click on the condition record icon (

). This will display the pricing condition record that applies to this

order:

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Select condition PR00 and thenclick on the Condition rec. icon


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Click on the back icon ( ) to return to the pricing screen:

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Click on the back icon toreturn to the pricing screen


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Click on the Analysis icon ( ) to see how the price was calculated:

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Click on the Analysis icon to seehow the price was calculated


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There is a lot of information provided on this screen. On the left-hand side are all of the pricingconditions available for procedure ZFSPRC:

On the right-hand side is an overview of whether the condition applied to this particular item onthis particular order:

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Pricing Conditions

Discounts

Minimum Price

Product Cost


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The Overview shows whether condition records were found for each condition available in thepricing procedure. The message Condition record is missing sounds like an error, but its not.For the discount conditions (KA00, K005, etc.) it just means that for this combination of salesarea, customer and material, the customer does not get a discount.

Note that after pricing condition PR00 is manual pricing condition PB00. If the system isproperly managed, then condition PR00 should always find the correct price, even when priceschange. But we dont live in a perfect world, and it may be the case that the price found forcondition PR00 is not correct. In that case, procedure ZFSPRC allows the sales order clerk tomanually override this price using condition PB00. To see how this works, click on the backicon ( ) to return to the pricing screen:

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A condition record for thematerial rice was found

A material price can be enteredmanually that would overridethe condition record forPR00

No discount condition recordswere found


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Suppose the price should be $305 per case, but the condition record has not yet been entered.This can be corrected at this point by manually entering condition PB00 and Amount 305, thenclicking on the enter icon ( ). The manual price will now override pricing condition PR00:

Note that the manually-entered price of $305is now being used to price the order.

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Enter condition PB00 and Amount305, then click on the enter icon


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5. Pricing with Discounts

We will now see how discounts are handled. Leave the session with the pricing screen open and

switch back to the other session to enter a discount condition using the menu path:

Logistics Sales and DistributionMaster DataConditionsSelect UsingCondition Type Create


Enter condition type K004 (material discount), then click on the enter icon ( ) and thefollowing screen will appear:

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Enter conditiontype K004, thenclick on enter

Enter##F110 for material,then click on the Scales icon


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Enter##F110, which is the material number for## NRG-B, then click on the Scales icon ( ).This will call up the following screen:

Enter10 for the scale quantity and 10 for the amount. This entry means that if the customerorders 10 or more cases of ## NRG-B snack bars, then the price will be discounted by $10 percase. Click on the save icon ( ) to save this pricing condition, then click on the exit icon ( ) toreturn to the SAP Easy Access screen.

Switch back to the session with the item detail for the sales order:

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Enter10 for the scale quantity and 10 for the amount


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First, we need to delete the manual pricing condition PB00. Select the condition PB00, then

click on the Delete Row icon ( ). Next, click on the Update icon ( ),

which will call up the following screen:

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First, select manual price PB00,then click on the Delete Row icon

Next, click on the Update icon


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Double-click on Pricing type B (Carry out new pricing) to recalculate the pricing of the ## NRG-B bars:

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Double-click on Pricing type B,Carry out new pricing


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Next, we will add a percentage discount for customer ## Houghton Health Club. To do this,switch back to the other session and follow the menu path:

Logistics Sales and DistributionMaster DataConditionsSelect UsingCondition Type Create


Enter condition type K007 (customer discount), then click on the enter icon ( ) and thefollowing screen will appear:

Use the search function to find the number for## Houghton Health Club (remember, SAPtracks customers by their customer number, not customer name), click on the enter icon to callup the data on the customer, select the line, then click on the Scales icon ( ). This will call upthe following screen:

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The price is now discounted by $10 per case, or $100 total

Enter conditiontype K007, thenclick on enter

Use the search function to find the customernumber for## Houghton Health Club

Click on the enter iconSelect the lineClick on the Scales icon


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Enter1000 for the scale value and 10 for the amount. This entry means that if the customerorders $1000 or more of any product, the price will be discounted by 10%. Click on the saveicon ( ) to save this pricing condition, then click on the exit icon ( ) to return to the SAP EasyAccess screen.

Switch back to the session with the item detail for the sales order. Unfortunately, because of theway the sales order transaction was programmed, this new discount will not be applied even ifthe pricing is updated. The only way to get this discount to apply to the sales order is to cancel itand create a new sales order. To cancel the sales order, click on the cancel icon ( ), which willproduce the following pop-up window:

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Enter1000 for the scale value and 10 for the amount

Click on Yes


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As we want to cancel this order, click on Yes and you will be back at the create sales orderscreen:

We need to create the order again. Refer to Step 4 (Test the Basic Pricing Procedure) fordetails on how to create the order. After creating the order, review the pricing details:

NOTE: There may be some delay between creating the discount and having it show up in

the pricing calculation. If you do not see the discount, try waiting 5 minutes and create the

sales order again.

6. Too Many Discounts and Minimum Pricing

By now, you should be familiar with creating price discounts. Because there are many ways tocreate discounts, it is possible to define so many discount methods that an item might be sold at aloss.

To see this, create a condition record for condition KA00, Sales Deal. The menu path to create acondition record is:

Logistics

Sales and Distribution

Master Data

Conditions

Select UsingCondition Type Create

Condition KA00 gives a percentage discount for a particular combination of customer andmaterial. It is basically a material-specific version of condition K007. Use the Scales functionto set a 10% discount for orders of ## NRG-B bars over $1000.

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Note the 10% discount applies, and the totaldiscount is now $39.50 per case


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To see impact of this discount, you have cancel the current order as before. Create a new orderfor 10 cases of ## NRG-B bars for ## Houghton Health Club. The pricing for this order shouldbe as follows:

Note that condition KA00, sales deal, is applied first, and results in a discount of $295 for the 10cases. Condition KA00, Customer Discount, is applied to the discounted price of $2,655, andresults in a second discount, this time for $265.50. Finally, condition K004, Material Discount,reduces the total price by another $100 dollars. The final price to the customer is $2,289.50.Unfortunately, this price is less than Fitter Snackers cost of $2,440, resulting in a loss of$158.50.

To make sure that the pricing procedure does not inadvertently create money-losing price, aminimum price can be set.

To do this, create a condition record for condition PMIN. For the ## NRG-B bars (material##F110), enter an amount of $244.80, which is Fitter Snackers cost per case.

Fortunately, updating the price for the current order will include the new minimum price. Withthe minimum price set at $244.80, the pricing calculation looks like the following:

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Click on the back icon ( ) to return to the sales order screen, then click on the save icon ( ) tosave the sales order. Click on the exit icon ( ) to return to the SAP Easy Access Menu.

Condition PMIN adds $158.50to the price so that thediscounts do not result in a loss

Pricing Exercise ECC 6

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