Free Goods Determination

Free Goods:
This function allows you to offer your customers a product free of charge in the form of free goods when a certain quantity of products is ordered. Free goods are a kind of quantity discount, and are granted in the form of a good delivery that is free of charge when a certain quantity is purchased. You can use it to encourage your customers to order greater quantities.
The following types of free goods exist:

1. Inclusive free of goods:
Here System configures free goods in inclusive option like, free good quantity is going to be include in order quantity.
Ex: - For 20 item 2 items are free. Then the system configures free goods as 18+2. 2 items are inclusive with the main item. The System will charge for 18 items only.

2. Exclusive free of goods:
Here the system configures free goods in exclusive option like, free good quantity is going to be excluded in the order quantity.
Ex: - Fro 20 items 2 items is free. Then the system configures free goods as 20+2. 2 items are exclusively from the main item.

Configuration steps: -

Maintain Condition Tables:
Steps: - IMG -> Sales and distribution -> Basic Functions -> Free Goods -> Condition technique for free goods -> Maintain Condition Tables.

Create condition table by choosing required field. Or else we can copy stand table and can apply in the access sequence. Form maintaining table, we can use numbers from 501 – 999. 1-500 tables are SAP standard table.

Maintain Access Sequences:
Steps: - IMG -> Sales and distribution -> Basic Functions -> Free Goods -> Condition technique for free goods -> Maintain Access Sequences.
Need to create a new Access sequence here or copy from standard and rename it. But if you have own tables, then need to apply that to access sequence only.

Click on access and assign table, which create before.

Click on SAVE and back.

Maintain Condition Types:
Steps: - IMG -> Sales and distribution -> Basic Functions -> Free Goods -> Condition technique for free goods -> Maintain Condition type.
Need to create new condition type here or copy from standard and rename it.
Access sequence need to assign to condition type. And available to give validate date also.

Maintain Procedure:
Path: - IMG -> Sales and Distribution -> Basic functions -> Free Goods -> Condition Technique for Free Goods -> Maintain Pricing Procedures.

Click on control data and assign condition type of procedure.

Click on SAVE and back.

Activate Free Goods Determination:
Path: - IMG -> Sales and Distribution -> Basic functions -> Free Goods -> Condition Technique for Free Goods -> Maintain Pricing Procedures ->Activate Free Goods Determination.
Here we need to assign this free good determination procedure to pricing procedure determination.

Click on SAVE and back.

Control Free Goods Pricing:
Path: - IMG -> Sales and Distribution -> Basic functions -> Free Goods -> Control Free Goods Pricing ->Control pricing for free goods item category

Click on position and find Free Goods Item Category (TANN).

Pricing: 
Here we can select pricing for item category TANN. No pricing, Standard Pricing or pricing for free goods (100% Discount).
For TANN – B (pricing for free goods, 100% Discount)
Statistical values:
This field indicates whether the system takes the value of an item into account, when it determines the total value of a document.
Here we need to put blank. Means the value of an item is not taking into account to calculate pricing. Click on SAVE and back.

Maintain Condition type for 100% Discount:
Path: - IMG -> Sales and Distribution -> Basic functions -> Free Goods -> Control Free Goods Pricing -> Maintain Condition type for 100% Discount.

Condition type R100:
This condition type is useful, if the business wants to look revenue and sales Deduction from same item.
Means first system calculates price for the material and then for the same material system give 100% discount to the customer.

Note: R100 haven’t Access Sequence. So when condition type hasn’t an access sequence user needs to maintain that price manually into the sales order.

But Especially in R100, one control is there. DO NOT POSSIBLE TO PROCESS MANUALLY. Means it must come automatically in pricing procedure.

This above condition use to control through Requirement and Alternative condition base value, which we discuss in the next step. Click on SAVE and back.

Maintain Pricing Procedure For Pricing:
Path: - IMG -> Sales and Distribution -> Basic functions -> Free Goods -> Control Free Goods Pricing -> Maintain Pricing Procedure for Pricing.

Here consultant needs to assign two condition types to business pricing procedure. (R100 & NRAB)

R100 condition type we have already discussed above. Now we need to see a brief description of two controls of this condition type. (Requirement and Alternative Condition Base Value)

Requirement = 55: The routine number 55 is assigned to condition type R100. If a business wants to see both Revenue and Sales Deduction for the free item.

Alt CBV = 28: The formula 28 calculates condition type R100 value as a ZERO. Condition type R100 should be taken as a ZERO. Click on SAVE and back.

Set Transfer of Cost to Main Item: (Copy Control) (VTFL)
Path: - IMG -> Sales and Distribution -> Basic functions -> Free Goods -> Control Free Goods Pricing -> Set Transfer of Cost to Main Item.
Click on Position and select source document (LF) and Targeted Document (F2).

Select item category TAN.

Click on Detail Icon.

Here the most important control is cumulate cost.
Cumulate Cost:
This field used to control whether the cost value is to be copeing from relevant Sub-item.
This control is useful in BOM also.
OBJECTIVE: To make Sub item is not relevant for billing.
In This case sub item does not appear in CO-PA or the statistics. Click on SAVE and back.

Maintain Copying Control:

Path: - IMG -> Sales and Distribution -> Basic functions -> Free Goods -> Maintain Copy Control. Click on Position and select source (QT) and targeted document (OR).

Click on item and select AGN and Click on display button.

Here the most important control is REEXPLODE STRUCTURE/FREE GOODS.
Re-explode Structure/ Free Goods:
This indicator control, whether the free goods are coping as it is from source document to targeted document or re-determine again.
If we check this box, the system allow us to make re-determine. Click on SAVE and back.

Create Condition record for Free Goods: (VBN1)

Min Qty: if customer ordering minimum x number of quantity then only free goods will be active for him.

Calculation Rules:
There are three types of calculation rules.
1. Pro-Rat (proportional): Here if customers buy 20 qty then 1 qty of material will b free means 20+1. Now suppose he buy 85 qty of material then he will get 4 qty free means 85+4 free.(85*1/20)

2. Unit of Reference: Here if customers buy 20 qty then 1 qty of material will b free means 20+1. System considers unit reference only. Means free goods available on 20/40/60/80 only. Now if customer orders 110 qty here then he will get 5 qty only. If 120 den he will get 6 qty of free goods.

3. Whole Unit: Here if customers buy 20 qty then 1 qty of material will b free means 20+1. System activates free goods on the calculation figure of 20 only. Means if customer order 39 qty of goods then he will be not eligible to get any free item (Zero “0” qty free) .If he buy 40 then he will get 2 Qty free (40+2).
This all scenario is possible in inclusive and exclusive free goods.

Note: If Business is maintaining same material as a free food with inclusive and exclusive strategy, then the system will give priority to exclusive free good strategy. Click on SAVE and back.

Sales Order (VA01):
Raise sales order and see the effect, with inclusive and an exclusive strategy of free goods.