First of all, you create exclusion groups. An exclusion group is a list of condition types that is identified by a three-digit number. Exclusion groups are defined in Customizing for Sales. You also assign exclusion groups to a pricing procedure and to determine how the condition exclusion is to be carried out.

You then assign the exclusion groups to a pricing procedure, thus defining the condition exclusion.

Depending on how you configure exclusion groups in the pricing procedure, the system can use condition exclusion to select the best price or discount in six different ways:

• Selecting the best condition record of a particular condition type from within one exclusion group
• Selecting the most unsuitable condition from within one exclusion group
• Selecting the best condition record for a condition type
• Selecting the most unsuitable condition record for a condition type
• Selecting the best conditions from different exclusion groups
• Excluding all condition types in the second exclusion group if a particular condition type in the first exclusion group exists in the document

During automatic pricing for a sales order item, the system may find a number of valid condition records that apply to the same item. If the competing condition records belong to a variety of condition types, the system selects the record with the best price and excludes the other condition records. Condition records that the system ignores are not deleted from the sales order but are simply deactivated. You can still see the excluded condition records on the pricing screen in the sales order.

In condition exclusion in the standard system, a condition record with a zero value is not taken into consideration. It is treated as though it doesn’t exist.

If you want to take a zero value into consideration, enter the standard calculation formula 038 in the pricing procedure for one of the conditions to be compared.

The following is an example of a situation where a zero value should be taken into consideration:

A company has two condition types in the pricing procedure for surcharges. A condition exclusion group with these two condition types has been defined and shows that the lower of the two should be applied. In some cases the surcharge could be zero. The reason for this may be a condition record found or a manual entry. In order that the system takes zero into consideration as the lowest surcharge for the customer, the formula ‘38’ must be assigned to one of the condition types in the pricing procedure.

If the access sequence for a particular condition type does not specify exclusive accesses, it is possible for the competing condition records to exist within the same condition type. For example, the system may find two valid condition records for a material discount (K004) - one a material discount, the other a customer-specific material discount. The system determines the record with the most favorable discount for the customer.

This method allows the system to check between exclusion groups for the most favorable price or discount. In this case, the system totals the condition values for each group, compares them, then selects the most advantageous group for the customer.

In the fourth alternative when the system selects one particular condition type that exists in the first exclusion group, it excludes all the conditions in the second exclusion group from pricing.

After you have defined the exclusion groups you want to use, you can enter them in the pricing procedure. The following example shows how exclusion groups can be used in the pricing procedure. In this case, the exclusion procedure selected is the best condition type within one exclusion group.

You process a sales order item to which the following condition records apply:

In this example, exclusion group 001 deactivates condition type K005. (The system determines that the KA00 condition record is the best discount and ignores the other condition types defined in the group.) Exclusion group 002 deactivates condition type KF02 for the same reason. (The system determines that the KF01 condition record has the lowest freight cost and ignores the other condition types defined in the group.) The final price in this example is calculated this way:

100 USD – 20 USD + 1 USD = 81 USD/KI

For further information on defining exclusion groups in Customizing for sales and distribution see the online implementation guide.