Price update from Original Material to copied Material Master

[former_member650819]

I have a scenario,

We are selling Raw materials to outside companies who have shortage of materials on Loan Basis. Once they have materials, they will return the materials within a time period. If they don't have the materials and unable to return within the said time, they will make the payment.

We will follow the normal sales process to sell the item to the customer.

1. creating sales order,

2. Outbound Delivery, and

3. Billing

Return process when receiving the materials from the company.

1. Billing Cancellation

2. PGI Cancellation

Since this is not an actual sale, hence we need to maintain selling price same as the purchase price.

We are planning to extend the Raw Materials to Sales View in the material master. However, we came to know that this will be Violation of Act. Hence we are planning to create a new material by copying the existing Raw Material master but the Material type will be Issue on Loan. This material will have sales view and purchase view.

This material will have a separate Valuation Class. Price control indicator will be V, since the item should be valuated at Purchase Price and the purchase price will keep changing as and when the price changes. This moving average price will be used as selling price.

The same price needs to be updated in the Sales Order automatically from the Loan Material Master when selling the Loan Material.

Now, the problem we are facing is, if we create a new Loan Material by copying Raw Material master with ROH material type, how will the price update in New Loan Material since, we will not purchase the Loan Material. We are purchasing the original item as raw material. Hence, this will not update the Loan Material Price automatically and the price will remain unchanged.

Please suggest a work around?

[ng_ronen]

Hi Nabin Ji,

What is your plan to update the stock quantity of the new material? You sure will need it to PGI and since the new material is a virtual material, so to say, you will have to "convert" the raw material into the new material through some processing (transfer posting for example). This should automatically update the MAP on the new material which can then be used in your sales pricing. However, now  the MAP of the new material need not necessarily arrive at the same figure as that of the raw material after the transfer and therein lies another problem. If it can be guaranteed that it will always be the same then well and good.

I assume yours is not an everyday scenario in the business. Why not simply make the price manual to be entered by somebody authorized after confirming the raw material price for the day. Will save a lot of time and effort.

Also give a thought to the process you are suggesting. A billing document, PGI etc. cannot just be cancelled for no good reason. These have implications on the financial reporting.

Regards,

Ron

[former_member650819]

Hi,

Let me explain to you how I am proceeding.

Step 1:

Create new material master by copying existing Raw Material with Issue on Loan material type. I am assigning a new Valuation Class in this material master. Also, we keep the pricing

Step 2:

Transfer stock from old material to new material in MB1B with movement type 309.

Step 3: Issue of Loan Material to Customer on loan basis.

Creating Sales Order, PGI and Billing

Step 4: Receipt of Item back from Customer

Sales Return process.

Step 5: In case Customer does not return goods, then we will collect payment from them

In the entire process we need to maintain the selling price at purchase price of the original material. Can you suggest any work around, in case this process is not advisable.

[Former Member]

Hi,

have you explored consignment process?

Regards,

JM

[former_member650819]

No, I have not checked consignment process. How will the consignment process help us in this case where I need to maintain the purchase price as sales price and what about material master? We are not ready to check the enter the selling price manually nor we should verify the purchase price of that material whenever we post sales order.

Do we create a new Material Master or extend the existing Raw Material to sales view in Consignment sales.