Enter Material Price Reference Agreement

Explanation

When prices of materials frequently fluctuate, Material Price Reference Agreements can be used to stabilize raw material prices over a specified period. This activity offers two options: basing material price element prices on the current agreement or basing them on a reference agreement.

If the Material Price Reference Agreement field is left Blank, Material Price Element Prices are determined by the current agreement, allowing editing and use in calculations.

If a specific Agreement No. is displayed in the Material Price Reference Agreement field, Material Price Element Prices are inherited from the reference agreement. In this case, they are non-editable and used for calculations.

 Prerequisites

• The reference agreement must have the same Supplier.
• The reference agreement must have the same Valid Site.
• The reference agreement must be in status Negotiate (Effective while Negotiating) or Active if visible as a Material Price Reference Agreement.
• The reference agreement cannot itself have a reference agreement.
• If using a reference agreement, the Price Decimal Rounding value in both agreements must correspond.

System Effects

As a result of this activity

• Material prices are based on current supplier agreement and material prices are used when calculating the material price elements contribution to the total prices.
• Or material prices are inherited from a reference agreement and material prices are used when calculating the material price elements contribution to the total prices.

Note: Changing the status of an active agreements to Planned, Cancelled, or Closed is restricted if the agreement serves a Material Price Reference Agreement.
If detailed pricing and/or part step pricing is used, the contribution of the material price elements will be calculated based on the material price element share defined per inventory part and the material pricing.

Pages

Supplier Agreement

Activity Diagrams

Enter Purchase Agreement
Re-Negotiate Supplier Agreement