Pricing

The price is a very important function in SAP. It can also be very difficult to grasp, but the underlying concepts are fairly simple. Prices of items are determined mainly by a process called the Condition Technique. The technical situation is so called because it operates using a set of conditions or elements that work together to determine the price of an item.

In SAP, the technique is used to organize and manipulate the key elements that determine the price of the material to arrive at an overall price that includes the basic price, discounts, surcharges and taxes.

The price of a line (that is, a variable amount of material) is determined by a combination of 5 elements. They are:

1. The sale
2. The type of document
3. The sales organization
4. Division, and
5. The distribution channel

Combining these elements with the base material determines the total price.

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