Contribution Margin Planning 

Use

Contribution margin planning enables you to plan the following key figures:

·        Regular Discounts ( 0REG_DISC)

·        Variable Promotion Discounts (invoice markdown) ( 0OFFR_DSCNT)

·        Free Goods Discount ( 0FRGO_DSCNT)

·        Rebate ( 0VOL_REBATE)

·        Other Sales Reductions ( 0COPAODSCNT)

·        Listing/Shelf Placement Fee ( 0CP_LSTFEE)

·        Funds ( 0CP_INSTFEE)

·        Direct Promotion Costs (External Service) ( 0PROMOTIONS)

·        Other Customer Costs ( 0OTHCUSTCST)

You carry out contribution margin planning for the relevant plan year, and for the current fiscal year in rolling planning. The Planning Folder determines the customer level at which you plan contribution margins.

Planning Levels

The planning levels in contribution margin planning are all similar in structure.  The only differences are the customer hierarchy characteristics, and the selection of the fiscal year (plan/actual year) and version.

The following documentation uses examples to describe the Planning Level: Account Group Condition Details. For an overview of all existing planning levels, see Overview: Condition Planning.

Planning Layouts

You can use the following planning layout types for contribution margin planning:

·        Condition Details

These planning layouts allow you to plan the above conditions in detail.  The product levels are arranged hierarchically and can be expanded. This hierarchical structure automatically assigns the values that are entered top-down to product levels, or groups them bottom-up. The key figures Direct Discounts (regular discounts + promotion discounts + free goods discount) and Budget (promotion discounts + free goods discount + rebate + funds + direct promotion costs) are determined in the planning layouts in background processing.

·        Contribution Margin Scheme Conditions (CM Scheme)

These planning layouts show the effect of the planned conditions on net revenue, net-net revenue, and contribution margins. The gross revenue and internal allocation value are determined from the planned billing quantity and the relevant actual values. If you change the planned billing quantity in the planning layouts for annual and rolling planning, a planning function adjusts the conditions that have already been planned linearly. The planning layouts enable you to analyze the entire product hierarchy.

Planning Functions

If you call a planning layout from condition planning, the system determines the gross revenue and the internal allocation value. If necessary, the planned conditions are adjusted linearly to match the planned billing quantity.This adjustment is also made when you save the planning layout. This ensures that your planning is always based on the current planned billing quantity.

When you exit the planning layouts, the annual planned net revenue and the previous year's reference planned net revenue are assigned to the periods. The planned conditions are always distributed to the next customer level. The planned net revenues are used as a reference for the distribution. The net price is also calculated (net revenue/planned billing quantity).

Note that the conditions are only assigned to the next customer level in each case. If you are planning at the Account Groups level, for example, the values are only distributed to the Accounts level. To display the values at the sub-accounts level, you have to run the planning folder Accounts.

If you use planning functions to copy or release your planning of net revenue and billing quantity in planning layouts, the corresponding conditions are also copied or released.