Material Inflation Class 

Definition

See material inflation class.

Use

You define material inflation classes in Customizing for Materials Management, and then assign a material inflation class to each material relevant for inflation in material master records. You must define a material inflation class for each of your valuation areas.

Structure

The material inflation class consists of the following components:

You define a price tolerance to prevent the Market Price Determination report from determining an unrealistic replacement cost. The system calculates the acceptable price range from the material's standard or moving average price. Any replacement cost that falls outside of this range will be rejected as the new replacement cost.

You can also define any of these values directly in the material master record. When you run the replacement-cost valuation reports for a material, this value then overrides the value defined in the material inflation class.