SD: Free Goods

Purpose:

1. This is common practice to provide free goods to the customers. Free goods can be inclusive or exclusive.

Process:

1. Sales order is created as usual.
2. Inclusive free goods: e.g. 1 unit out of 10 units is free.  So, if a customer is ordering for 10 units, 1 unit will be given free and customer will pay only for 9 units.
3. Exclusive free goods: e.g. if a customer is buying 10 units, he will get additional 1 unit free. So, if a customer is ordering for 10 units, 1 unit (additional) will be given free and customer will pay only for 10 units. Exclusive free product can be either same as ordered product or can be a different product.
4. In the sales order, free goods (item category TANN) are displayed as a sub item of the original item.

Configuration/Master data:

1. Free good procedure is assigned to combination of sales area, document pricing procedure and customer pricing procedure.
2. Free goods procedure is created in the same way as we create pricing procedure, listing/exclusion procedure etc using condition technique.
3. Free goods – condition records are created using tcode VBN1.
4. In condition records we can control, if free goods are delivered alone or with main item.
5. Calculation type for determining free goods quantity. E.g. company is offering 3 units of free goods for 100 units ordered. Customer orders 212 units.
1. Pro rata: free goods quantity is rounded. Free goods quantity = 212*3/100 = 6.36 = 6 (after rounding)
2. Unit reference: Ordered quantity is rounded down as per condition record quantity. Free goods quantity = 200 (rounded down)*3/100 = 6
3. Whole units: checks if ordered quantity is multiple of condition record quantity. Free goods quantity = 0 as 212 is not multiple of 100.
4. We can create our own calculation rules using VOFM tcode.
6. For item category TANN, if
1. Pricing field (in item category configuration VOV7) is maintained as blank (no pricing): there will be no pricing (zero) for free goods.
2. Pricing field (in item category configuration VOV7) is maintained as ‘B’ (Pricing for free goods (100% discount)): and maintain condition type R100 with requirement 55 (free goods) in the pricing procedure, then sales order will have 100% discount for free item.