The following example shows how the system uses conditions to find the right transfer price and how the different elements of a pricing procedure interact.

Material 1 belongs to profit center 1, is a semifinished product, and is manufactured in plant 0001. The final product is put together in plant 0001 as well. A production order is created for material 1, which is used for the production of the final product. The production order is assigned to profit center 2.

1. Based on the movement type in the production order, the system determines that an actual goods movement should take place. For actual data, variant 000 is always used for transfer prices.
2. The system reads transfer price variant 000 and finds that it should use pricing procedure TP0001.
3. The pricing procedure contains the valid condition types for pricing and the order in which they are calculated. The system takes the first condition type in the pricing procedure, KA01, and searches for a valid condition record.
4. Each condition type in the pricing procedure can be assigned an access sequence. In this case, the condition type uses the access sequence ZG01.
5. The system reads the condition tables specified in the access sequence until it finds a valid condition record.

The first table, which requires a combination of plant, profit center, and material, does not yield a valid condition record. So the system reads the next table, which requires a combination of profit center and material, and finds a valid record.

6. The system determines the transfer price based on the information in the condition record. In this case, it finds a fixed price of USD 100.00 for material 1 when it is delivered from profit center 1 to profit center 2. This price is the price used when material 1 is delivered to profit center 2.