Free Goods
Sales & Distribution
Company
LOGO
Topics
1. Introduction
2. Free Goods Types
3. Inclusive Bonus Quantity
4. Exclusive Bonus Quantity
5. Free Goods Processing
6. Free Goods Constraints
Introduction
In Sales processing in various Industry sectors it is
required to supply certain goods for free additionally or
supply customer with a portion of goods for free.
Free Goods functionality in system caters to these
requirements and enables business to enhance sales
operations.
Types of Free goods provided in system are explained in
following slides
Inclusive Bonus Quantity
Inclusive Bonus Quantity:
In this type of Free Goods, the customer only pays for
some of the Goods ordered, rest of goods being free of
charge. This is also called as Inclusive free goods.
Example: In an order of 20 cases of toothpaste,
customer would be charged only for 18 cases, 2 being
inclusive free goods and not charged.
Two options are available in system for Inclusive bonus
quantity. The quantity of free goods can be shown as a
separate item or be included in the same line item in
sales document.
Exclusive Bonus Quantity
Exclusive Bonus Quantity:
In this type the customer pays for the goods ordered and
is additionally given extra goods free of charge. So in this
case, a larger quantity is delivered than ordered and
additional quantity delivered is not charged.
Example: Customer orders for 2 welding machines and is
supplied with a case of welding rod consumables, but is
not charged for it.
The material supplied additionally need not be the same
as materials ordered in this case.
Free Goods Processing
Free Goods Processing
For Free goods processing condition needs to be set up in
system. ‘NA00’ is Free goods condition type available in
standard system.
Conditions are maintained by standard Condition technique and
can be maintained at various levels i.e. Customer/Material,
Customer Hierarchy/Material etc.
Free goods agreement is setup with validity period and various
controls are available for system behavior of free goods while
maintaining condition records. These are explained in user
guide.
Based on condition records set, these are automatically
determined in Sales order and can be copied on to Delivery and
Billing document as separate line items.
Free Goods Processing
Free Goods Processing
An item in sales document becomes free of charge when 100%
markdown is applied on the item. With this the prices are visible
however there is no net price applicable. Standard system
contains condition type ‘R100’ for this purpose.
In Inclusive Free Goods case without item generation the total
price is adjusted in a way to effectively have no charge for
quantity of free goods in the item. This is controlled by a
condition ‘NRAB’ available in system and assigned in pricing
procedure.
Free Goods Constraints
Free Goods Constraints
There are couple of constraints in system for free goods
processing. Free Goods can be supported on a 1:1 ratio,
i.e an order item can lead to only one more item.
With material 1, material 2 & 3 to be given free of charge
are not supported.
Free Goods are also not supported in combinations with
structures like BOM explosion etc. also they cannot be
used in Make-to-order production, Third party processing
and scheduling agreements.
