SAP Note 24738 - Precious metal surcharges in Purchasing

Symptom:

How precious metal surcharges are handled in Purchasing, taking a copper surcharge as an example.

Cause and prerequisites
Solution

Using copper surcharges as an example, this Note shows how precious
metal surcharges can be handled in Purchasing in R/3.

Copper surcharges in Purchasing

Terms

Copper number
= number quantifying the copper content of a material.
E.g. copper number for high-voltage cable 43 per 1000 m

Copper base price
= copper price already included in the calculation of the material price.
Example: Copper base price $300.00/ 100 kg

Ruling copper price
= current day's quoted ruling market price for copper
E.g. today's copper price $320.00/ 100 kg

Copper surcharge
= surcharge levied on a material by a vendor when invoicing, to take
account of a variance between the ruling copper price and copper base
price.

Calculation of copper surcharge:
copper surcharge = copper number X (ruling copper price - copper base price / 100

Using the data of the above example, for 1000 m
high-voltage cable the copper surcharge amounts to
43 X (320-300)/100 = $8.60 per 1000 m


Problem description

Copper surcharges differ from other surcharge conditions by the fact that they depend on a material-specific characteristic number and vary according to the daily ruling price for copper. Manual computation of the amount of the surcharge for each material item is extremely laborious and time-consuming for users.


SAP solution

Proposed solution.
The material-dependent copper number is stored in the system as a master condition with the key field "Material". The conversion of the copper number to copper surcharge amount in dollars is effected using an exchange rate copper currency/$ resulting from the current ruling price for copper.


Steps

1. Create a new currency for each copper base price
Transaction OY03
CU00 for copper base price = 0
CU02 for copper base price = $200.00 / 100 kg
CU03 for copper base price = $300 / 100 kg

2. Create new condition type for copper surcharge
Transaction MEK0, Cond. type -> Condition types
ZUKU (calculation rule C, cond. class A)

3. Include condition type ZUKU in the main calculation schema (note that in SD, and in MM prior to 3.0, the latter may also be termed "pricing procedure") ZM0000
Transaction MEK0, Calculation schema -> Calculation schemas

4. Condition table 901, generate material
Transaction MEK0, Condition table-> Create
901, Description: Material; chosen fields: Material; -> Generate

5. Create access sequence ZKZU for condition type ZUKU and activate

6. Assign access sequence ZKZU to condition type ZUKU
Transaction MEK0, Condition type -> Condition types

7. Per copper currency, maintain exch. rates, copper currency -> $ Transaction OB08
3 entries : M, CU00, $
M, CU02, $
M, CU03, $
where rate = ruling copper price/kg - copper base price/kg
THESE EXCHANGE RATES MUST BE UPDATED DAILY!

All Customizing settings have now been made. The system now needs to know the materials that are subject to a copper surcharge and the material-specific copper numbers. This is done through maintenance of master conditions of condition type ZUKU.

8. Maintain master condition ZUKU for the relevant materials
Transaction MEK1
Condition type ZUKU; key combination material
In the amount column, enter the copper number and a suitable
copper currency (depending on the copper base price).
In columns "per" and "Un" enter the correct reference units (e.g.
1000 M)

9. Test:
When a PO is created, the copper surcharge for material items will now be computed automatically.


Notes

1. The copper number must be maintained in the system as a material-specific master condition

2. The copper currency exchange rates must be updated in the system on a daily basis.

3. Caution: exchange rate fluctuations: the copper currency is not a
true currency and must be treated specially in Financial Accounting.

4. If the ruling copper price falls below the copper base price, a
negative exchange rate would have to be introduced. This is not
possible.
In such a case, it would have to be considered, if the material
should be managed under a lower copper base price.

5. Some condition types are available in 3.0. for a precious metal
surcharge processing that allow reproduction without this note.

Additional key words

Precious metal Copper Copper surcharge