Unit 18: Free Goods TSCM60

Lesson: Free Goods

614 Lesson Duration: 75 Minutes

Lesson Overview
This lesson deals with automatic free goods determination.

Lesson Objectives
After completing this lesson, you will be able to:
• Set up automatic free goods determination.

Demo:
Set up automatic free goods for material M-18.
You can find quantity details for the master record and document in the notes
under the “Free goods - Calculation Rule” diagram.

Business Example
• Free goods play a large role in price negotiations with your customers.
• As a result, you want to be able to determine free goods and place them
in sales documents automatically.
• You are responsible for automating determination of free goods, bearing in
mind that certain information related to the free goods has to be supplied
to Controlling.

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TSCM60 Lesson: Free Goods

Figure 223: Exclusive and Inclusive Bonus Quantities (1)

Figure 224: Exclusive and Inclusive Bonus Quantities (2)

In industry sectors such as retail, the chemicals industry or consumer goods

industry, it is common to provide discounts in the form of free goods.

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Unit 18: Free Goods TSCM60

Free goods can be part of the order quantity not included in the invoice. This is
called an inclusive bonus quantity. The ordered goods and the free goods both
involve the same material. The quantity units of the free goods and ordered goods
must be the same.
Free goods can also take the form of extra goods that are free of charge. These
are called exclusive bonus quantities.
In exclusive bonus quantities, the extra goods are delivered free of charge and
are not included in the invoice. This can either be an additional quantity of the
goods ordered or it can be another article.
The exclusive free goods appear in the sales document as a separate, free-of-charge
item.

Figure 225: Free Goods in the Sales Order

Both forms of free goods are handled in the same way in the sales order. The
material that has been ordered is entered as a main item and the free goods material
is automatically displayed as a sub-item.
The item category determines how the item is controlled later in the business
process (for example, for delivery or pricing). Item categories TAN and TANN
are used in the standard SAP system. The system determines the free goods
automatically by accessing the relevant condition records. The system then
accesses the free goods master record with the pricing date.
As in earlier releases, you can also enter free goods manually by entering data in
the higher-level item and item category fields (TANN). In this case however,
the system does not refer to the free goods master record, and settings such as
automatic reduction of the main item quantity for inclusive quantities or certain
controls for the delivery are not available.

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TSCM60 Lesson: Free Goods

The system re-reads the free goods master record in the sales order if the quantities
in the main item change or if the pricing date changes. The system then deletes the
sub-items and re-creates them. Any manual changes to the free goods quantity
are lost.
If pricing is re-run in the sales order, it does not affect the free goods determination.

Figure 226: Free Goods - Master Data

The condition technique is used for free goods. Free goods are generally regarded
as a supplement to the pricing agreement for a material.
You maintain the free goods in the master records for sales by:
• Using a different menu entry
• Going to Prices and Discounts/surcharges when maintaining the master
records
You can define master records for free goods at any level - for example, material,
customer / material, price list category / currency / material or customer hierarchy
/ material.
You can restrict master records for one level in many different ways:
• Validity period: The condition is only valid within this period.
• Minimum quantity: The condition comes into affect when this quantity has
been exceeded
• Calculation rule: see next slide
• Scales
You can process different master data with the same key for inclusive and
exclusive bonus quantities at the same time. You only need to press a button to
switch between the two types of discount.

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Unit 18: Free Goods TSCM60

When you enter an exclusive bonus quantity, an extra entry line appears where
you can enter the goods item if it is not the same as the ordered material.

Figure 227: Free Goods - Calculation Rule

When you specify a calculation rule, you decide how the system determines the
free goods quantity from the additional and document quantities.
• The free goods quantity is the quantity from which the discount is calculated
(not the minimum quantity).
• The additional quantity is the quantity delivered free-of-charge.
• The document quantity is the quantity entered by the person creating the
sales order.
Three calculation rules are provided in the standard system. The following
example describes how they work:
You offer supply 20 units of free goods for a free goods quantity of 100 units.
The customer orders 162 units (document quantity).
• Rule 1 Prorated: 32 units of free goods [ 162*(20/100) = rounded down ]
• Rule 2 Related to units: 20 units of free goods [ 100*(20/100) = rounded
down ]
• Rule 3 Whole units: 0 units free goods [ 162 is not a complete unit of 100]
Calculation rules are stored in the system in the form of ABAP/4 code.
You can also define your own rules (transaction VOFM, under menu entry,
formulas).

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TSCM60 Lesson: Free Goods

Figure 228: Free Goods - Analyses and Accounting

You can see detailed information about free goods in Accounting or analyses.
Revenues, sales deductions and costs of free goods can be transferred to
Accounting in different ways, shown in the examples below. (MIt = main item,
SIt = sub-item)
• Scenario 1 (SAP standard system)
MIt: Not influenced by free goods
Slt: Pricing de-activated, calculation price (VPRS) configured as costs
• Scenario 2
MIt: Not influenced by free goods
SIt: Pricing activated for item category TANN with characteristic B (in
pricing procedure,
condition type R100 - 100% discount - is activated by condition 55 at level
819), discount is transferred as sales deduction and the calculation price
(VPRS) as costs.
• Scenario 3
MIt: Cumulation of calculation price for lower-level item configured at main
item level (in copying control Delivery → Billing document), cumulated
calculation price transferred as costs
SIt: Pricing deactivated

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Unit 18: Free Goods TSCM60

Figure 229: Free Goods - Condition Technique

The condition technique provides greater flexibility for using the free goods
functions.
The system uses the information about the sales areas, document determination
procedure (from the sales document type) and customer determination procedure
(from the customer master) to determine the free goods procedure.
The procedure contains a list of the condition types for free goods.
One access sequence (search strategy) is assigned to each condition type. Each
access sequence consists of one or more accesses.
Each access contains exactly one condition table. This represents the search key
that the system uses to search for a valid master record.
If the search is successful, the system generates a sub-item for the free goods in
the document. The item category is assigned with the item category usage FREE.
Pricing for both items is controlled with the item category as normal.
You can activate an analysis of the free goods determination in the sales document.
The system then displays detailed information on how the free goods were
determined.

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TSCM60 Lesson: Free Goods

621 Exercise 29: Free Goods

Exercise Duration: 30 Minutes

Exercise Objectives
After completing this exercise, you will be able to:
• Create different master records for free goods
• Explain how free goods affect the sales process
• Describe how to control free goods

Business Example
You can extend pricing by using free goods in the form of exclusive and inclusive
bonus quantities. You make the relevant agreements with your customer. These
will be automatically controlled by the SAP System in the document when you
enter a sales order.

Task 1:
You have agreed on a price reduction for customer T-S62A## in the form of free
goods.
1. Create a free goods master record (free goods type NA00) for sales
organization 1000 and distribution channel 10. If the customer orders at least
20 units of material T-ATC##, 10% of the purchased quantity is to be free of
charge. The free-of charge material should be a proportion of the quantity in
the higher-level item.
2. Create a trade fair order ZA## with purchase order number ##LO605-ZA##13
for customer T-S62A## and material T-ATC##. Order quantity is 10 units.
What message appears?
____________________________________________________
3. Increase the quantity to 40 units. What are the quantities in the higher-level
and sub-items?
Main item: _________________________
Sub-item: _________________________

Continued on next page

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Unit 18: Free Goods TSCM60

Task 2:
You make another free goods agreement with customer T-S62E## for material
T-ATD##. The minimum order quantity is 20 units. You want to deliver one
free-of-charge unit of material T-ATA## for each 20 units ordered.
1. Create the relevant master record for sales organization 1000 and distribution
channel 10.
2. In the record, indicate that the system only determines the quantity of the
free-of-charge material in multiples of the free goods quantity.
3. Create a trade fair order ZA## with purchase order number ##LO605-ZA##14
for customer T-S62E## and material T-ATD##. Order quantity is 40 units.

Task 3:
Optional
The system automatically created a free goods sub-item for the order with
purchase order number ##LO605-ZA##14. The system runs pricing for this
sub-item even though it is free of charge.
1. Which item category did the system find for the sub-item and which key did
it use?

Item category:
_______________________
Key:
______________________

2. Which settings in Customizing affect pricing for the free-of-charge item?

____________________________________________________

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TSCM60 Lesson: Free Goods

Solution 29: Free Goods

Task 1:
You have agreed on a price reduction for customer T-S62A## in the form of free
goods.
1. Create a free goods master record (free goods type NA00) for sales
organization 1000 and distribution channel 10. If the customer orders at least
20 units of material T-ATC##, 10% of the purchased quantity is to be free of
charge. The free-of charge material should be a proportion of the quantity in
the higher-level item.
a) Logistics → Sales and Distribution → Master Data → Conditions
→ Free Goods→ Create

Discount type: NA00

Customer: T-S62A##
Material: T-ATC##
Lowest quantity: 20
For: 10
Unit of measure: PC
are free goods: 1
Unit of measure: PC
Calculation type: 1
Free goods delivery control (L): blank

Save → Exit
2. Create a trade fair order ZA## with purchase order number ##LO605-ZA##13
for customer T-S62A## and material T-ATC##. Order quantity is 10 units.
What message appears?
____________________________________________________
a) Order
Logistics → Sales and Distribution → Sales → Order (order type
ZA##) → Create
b) What message appears?
Minimum quantity of 20 PC of free goods has not been reached.

Continued on next page

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Unit 18: Free Goods TSCM60

3. Increase the quantity to 40 units. What are the quantities in the higher-level
and sub-items?
Main item: _________________________
Sub-item: _________________________
a) Main item: 36 pieces
Sub-item: 4 pieces

Task 2:
You make another free goods agreement with customer T-S62E## for material
T-ATD##. The minimum order quantity is 20 units. You want to deliver one
free-of-charge unit of material T-ATA## for each 20 units ordered.
1. Create the relevant master record for sales organization 1000 and distribution
channel 10.
a) Logistics → Sales and Distribution → Master Data → Conditions
→ Free Goods → Create

Discount type: NA00

Button: Exclusive BQ
Customer: T-S62E##
Material: T-ATD##
Lowest quantity: 20
For: 20
Unit of measure: PC
Additional quantity: 1
Unit of measure: PC
Additional matl: T-ATA##

2. In the record, indicate that the system only determines the quantity of the
free-of-charge material in multiples of the free goods quantity.
a) Calculation type (ReR): 2
3. Create a trade fair order ZA## with purchase order number ##LO605-ZA##14
for customer T-S62E## and material T-ATD##. Order quantity is 40 units.
a) Logistics → Sales and Distribution → Sales → Order (order type
ZA##) → Create

Continued on next page

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TSCM60 Lesson: Free Goods

Task 3:
Optional
The system automatically created a free goods sub-item for the order with
purchase order number ##LO605-ZA##14. The system runs pricing for this
sub-item even though it is free of charge.
1. Which item category did the system find for the sub-item and which key did
it use?

Item category:
_______________________
Key:
______________________

a) Logistics → Sales and Distribution → Sales → Order (order type

ZA##) → Create

Item category: TANN

IMG → Sales and Distribution → Basic Functions → Free Goods →

Item Type Determination for Free Goods Item

Key: ZA## / NORM / FREE / TAN

2. Which settings in Customizing affect pricing for the free-of-charge item?

____________________________________________________
a) IMG → Sales and Distribution → Basic Functions → Free Goods
→ Control Free Goods Pricing → Control pricing for free goods
item category
→ Item category:

Pricing: B Pricing Free goods (100% discount)

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Unit 18: Free Goods TSCM60

Lesson Summary
You should now be able to:
• Set up automatic free goods determination.

670 © 2009 SAP AG. All rights reserved. 2009

TSCM60 Unit Summary

Unit Summary
You should now be able to:
• Set up automatic free goods determination.

2009 © 2009 SAP AG. All rights reserved. 671

Unit Summary TSCM60

672 © 2009 SAP AG. All rights reserved. 2009