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Process documentation Gross and Net Unit of Measure Pricing   

Purpose

You can use gross and net unit of measure pricing for HIM materials in sales orders in the Sales and Distribution (SD) component or in billing.  You can use gross and net unit of measure pricing to control if the system should determine the price of a material based on the gross or net unit of measure. The use of gross and net unit of measure pricing is only useful when the unit of measure is temperature dependent, such as in the case of volume units of measure. Gross and net unit of measure pricing is not useful in the case of a unit of measure such as mass, because mass is not influenced by temperature.

The system uses the specified rule to replace one unit of measure with another unit of measure. During pricing of the item quantity, such as the invoice (delivered) quantity in the billing document, the unit of measure is converted.

Some oil companies are required by law or due to customer requests to provide information about the prices, that is the surcharges and discounts, relating to invoice items in gross or net units of measure. The factors that determine if a gross or net unit of measure is to be used, can be complicated and result in a similarly complicated conversion rule in the system.

Definition of Gross and Net Unit of Measure

Unit of Measure

Definition

Gross unit of measure

A unit of measure to which a valid temperature has not been assigned. Such a unit of meausure is not dependent on temperature. For example, if you compare the volume of the same material V1=10L and V2=10L, it is not clear without a reference temperature that the same quantity of material is meant. Liters, barrels, and gallons without a reference temperature are examples of gross units of measure.  

Net unit of measure

Unit of measure that specifies a reference temperature, such as liters at 15° Celsius (L15) or gallons at 60° Fahrenheit (UG6).

 

Process Flow

Note

Condition types used for Formula & Average Pricing that have been set up in Customizing with the calculation type Q (Reserved IS-Oil), cannot be used for gross and net unit of measure pricing as it is described here. A similar function is available for converting gross and net units of measure in Formula & Average pricing.

  1.  You set the gross/net pricing indicator in Customizing for each condition type.

  2.  If you choose R as the gross/net price indicator (company-defined pricing rules are used), you can assign gross/net pricing rules on the item level based on customers, countries, or regions.

  3.  You enter the location of the transfer of ownership (title pass location) for each Incoterm.

  4.  You determine the relationship between the gross and the net unit of measure per country.

Procedure:

Maintaining Gross and Net Unit of Measure Pricing

Displaying Valid Gross and Net Unit of Measure Pricing

 

 

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