Customer Hierarchy

[Former Member]

Hi,

Please explain about the use of customer hierarchy and please give me a example too along with the answer

Ananya

[Former Member]

Hi,

With customer hierarchies you can now create flexible hierarchies to reflect the structure of customer organizations.

For example, if your customer base includes multi-level buying groups, cooperatives, or chains of retail outlets, you can create hierarchies to reflect the structure of these groups.

Customer hierarchies are used during sales order processing and billing for determining pricing, including rebates. Customer hierarchies may be useful for your organization if you trade with customers who have complex, external structures that you need to take into account for pricing.

For example, you trade with major retail chains or large concerns that are organized in hierarchies with numerous levels.

A customer hierarchy is a flexible structure consisting of nodes. Each node - with the exception of the uppermost node - refers to another node at a higher level in the hierarchy (known as a higher-level node). Nodes that are assigned to higher-level nodes are known as dependent nodes. Creating a customer hierarchy consists of three steps:

You create master records for each node that you plan to include in the hierarchy (some of your master data - customers, for example - already exists).

You assign the nodes to each other, gradually building up your hierarchy.

You assign your customers to the appropriate nodes.

Thanks

[Former Member]

Hi Ananya,

Customer hierarchies are normally created for pricing and reporting purposes. Mainly used to reflect the same pricing elements with same values all along the customer purchasing chain. For ex, the customer has multiple offices with all the offices purchasing from our company, we will create a customer hierarchy keeping the head office of the customer as the top node and following branches as subsequent nodes.

In this case, when you create condition records for the main node( head office), all the subsequent nodes ( offices) would be having the same pricing elements applicable to them too...

Let me know if you need any further info..

Thanks,

Sarath