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Function documentation Vendors: Price Determination and Vendor Hierarchies Locate the document in its SAP Library structure


Vendor hierarchies enable you to apply pricing and rebate agreements that are determined at a higher level than the vendor. For each node that you indicate as relevant for price determination, you can create pricing condition records.


The standard version of the SAP system includes the following new condition types for creating condition records in vendor hierarchies:

Condition types



Percentage discount at node level


Percentage discount at article/node level

In the standard version, the system determines hierarchy-related prices in the purchase order (condition types LH01 and LH02) by searching for valid condition records at each level in the hierarchy path, starting with the lowest level. As soon as the system finds a valid condition record, it stops the search. If the same kind of condition record is stored at two different levels in the hierarchy, the system takes the first valid record at the lowest level.


In Customizing for Purchasing (MM), you can specify your own conditions (access sequence).


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In this example, the vendor hierarchy represents the Smith nationwide sales group. During negotiations, you establish a pricing agreement for a particular product line. You are offered a national discount from all Smith stores. In addition, you are offered a special promotional discount for Smith North. You create the corresponding pricing condition records for the Smith Central and Smith North nodes. A subsequent purchase order from vendor 2742 gets the national discount. When orders are placed with vendors 2743 and 2744, the system determines prices by applying the pricing data stored for Smith North.


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