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 Procure-to-Pay for Commodities 3

 

Technical Data

Technical Name of Business Function

LOG_MM_COMMODITY_03

Type of Business Function

Enterprise Business Function

Available From

SAP enhancement package 7 SP 04 for SAP ERP 6.0

Technical Usage

Central Applications

Application Component

Materials Management (MM), Commodity Management in Logistics (LO-CMM)

Required Business Function

Procure-to-Pay for Commodities 2(LOG_MM_COMMODITY_02)

This business function provides you with new functions for existing business function Procure-to-Pay for Commodities 02 (LOG_MM_COMMODITY_02). These new features supplement the process flow and make the processes needed for dealing with commodities far more efficient.

The enhancements include the following functions:

  • Rule for Definition of Price Fixation Option

  • Exchange Rate Forecast

  • Quotation Rule

  • Commodity Forward Index

  • Maturity Selection

  • Quantity Adjustment

  • Agreed Conversion Factors

Integration

The same functions that you can activate using business function Procure-to-Pay for Commodities 3 are also available in Sales and Distribution, providing you have activated business function Contract-to-Cash for Commodities 3 (LOG_SD_COMMODITY_03).

Prerequisites

  • You have installed the following components as of the version mentioned:

    Type of Component

    Component

    Required for the Following Features Only

    Software Component

    SAP_APPL 617 SP04

Features

Rule for Definition of Price Fixation Option

You can define a price fixation rule to predefine a price fixation option for the commodity pricing engine (CPE). If you use such a rule in a CPE term in Customizing and this term is referenced, the system automatically defines a price fixation option in this business document. In a business document, you can define a price fixation option together with its attributes by entering a price fixation rule. These attributes control how the system calculates the term rate of the corresponding term.

Exchange Rate Forecast

The exchange rate forecast function extends the available function that used provisional values for exchange rates that are not yet available. Instead of using historic exchange rates or other provisional rules, the system can use FX forward rates for the provisional evaluation that are calculated based on FX swap rates.

You can use the exchange rate forecast function within the CPE formula evaluation if you have activated the business function Financial Risk Management for Commodities 4 (FIN_TRM_COMM_RM_4 TRM).

Quotation Rule

You can define a quotation rule in Customizing to control what is quoted for the commodity pricing engine (CPE).

Note Note

The quotation rule defines what kind of quotations are used in a quotation period. The period determination rule defines the quotation dates and times of a quotation period.

End of the note.

In a quotation rule that uses a derivative contract specification, you can also control the following:

  • Maturity selection

  • Quotation forecast

If you use a quotation rule in one of the following ways, the system automatically defines which price quotations are used in the term of a business document:

  • In a CPE term in Customizing and this term is referenced in the business document

  • In a CPE term in the business document

Commodity Forward Index

You can use market data for commodity forward indexes in the commodity pricing engine (CPE). This market data is based on the derivative contract specification (DCS) and supports, similar to commodity futures, the following functions:

  • Use DCS-based quotations in CPE formulas

  • Use DCS-based commodity curves for quotation forecast

You can import commodity forward index data with the market data interface datafeed in SAP ERP.

Commodity pricing methods are provided for determining commodity forward index data.

You can use this data for provisional or final prices.

You can maintain this function in documents that use the configurable pricing user interface.

You can select the maturity of a commodity forward index with the following parameters:

  • Derivative contract specification ID (DCS ID)

  • Market identifier code (MIC)

  • Timing

  • Price type

You can simplify the specification of these parameters when you use quotation rules together with the maturity selection function.

Maturity Selection

You can use the maturity selection function to determine what kinds of quotations are used in the CPE formula evaluation.

In a quotation rule, you can define the parameters that control the maturity selection function in the CPE term of a business document.

You can select the maturity of a DCS-based quotation by choosing one of the following values of the Maturity Selection Type field:

  • Quotation-Date-Based: The system automatically performs the maturity selection after the determination of the quotation period. The system selects price quotations of commodity futures by using the Time to Maturity field and the current quotation date. The system selects price quotations of commodity forward indexes by using the Timing field and the current quotation date.

    Note Note

    • For specific data constellations, it is possible that the system uses price quotations from multiple maturities.

    • For the commodity forward index, the Timing field is mandatory.

    End of the note.

  • Key-Date-Based: The system automatically performs the maturity selection before the determination of the quotation period. The system determines the maturity key date automatically by a maturity selection routine. This routine selects a maturity key date for a DCS period type starting from the base date. The base date is calculated from a reference date and an optional date offset.

    Note Note

    The system uses price quotations from only one maturity.

    End of the note.

  • Manual: You select the maturity manually in the document either using the maturity key date or the maturity description.

    Note Note

    The system uses price quotations from only one maturity.

    End of the note.

Note Note

  • For commodity forward indexes, the system automatically uses quotations of period type Quotation Period Settlement and sets the maturity selection type to Quotation-Date-Based.

  • The existing CPE formula evaluation logic corresponds to the quotation-date-based approach.

End of the note.

You can control how the key-date-based approach works in detail by specifying the following parameter values in the quotation rule:

  • Reference date routine for maturity selection: Specifies the routine that determines the reference date for the automatic selection of a maturity key date. Available preconfigured values are the same as for the reference date routine in the period determination rule.

  • Date offset routine for maturity selection: Specifies the routine that determines the date offset applied on the reference date value. Available preconfigured values are the same as for the date offset routine in the period determination rule.

  • Maturity selection routine: With this routine you can control how the system automatically selects a maturity key date that uniquely identifies a maturity.

  • Period type: Specifies the periods that describe the maturity of a derivative contract specification (DCS) ID. The possible values for the period type depends on the derivative category of the DCS ID.

You can select the maturity key date for commodity futures manually in a business document in the following ways:

  • In the Maturity Description field and in the Maturity Key Date field you can use the search help. The value list of the search help proposes all maturity key dates that lie after the pricing date. You can override the proposal by entering a value in the Price Date field.

  • In the Maturity Description field you can enter a text using wildcards.

Quantity Adjustment

You can adjust the quantity that a price condition uses in a business document. You use this function if the quantity that is relevant for the corresponding condition deviates from the quantity of the business document item.

In a business document, the system uses a specific condition type to calculate an adjusted quantity by applying an adjustment factor. Such a condition is called a source condition. Subsequent conditions can use the calculated adjusted quantity or the adjustment factor of source conditions.

You can control how the system behaves during pricing by specifying one of the following quantity adjustment types in Customizing:

  • Adjusted quantity: One condition refers to a single source condition and uses it as the input value for the calculation of its condition base value. If the input unit of measure and the condition unit of measure are different, the system performs a quantity conversion.

  • Adjustment factor: One condition refers to one or more source conditions and multiplies their adjustment factors with the condition base value.

To support the calculation of an adjusted quantity in a condition type, in Customizing of the condition type, the calculation type V (Quantity Adjustment) has been introduced.

You can define condition master records for condition types with calculation type V and determine them in a business document by use of the condition technique.

In addition, to calculate an adjusted quantity, the system supports the following functions:

  • Configurable parameters and formulas

  • Agreed conversion factors

Agreed Conversion Factor

You can specify agreed conversion factors in a business document. You use this function if you want to use in a condition a conversion factor for a unit-of-measure pair and the conversion factor deviates from the one in the material master.

You can specify one agreed conversion factor per unit-of-measure pair and assign one of the following applicable areas:

  • Condition

  • Current Item

  • All Items

During pricing, the system searches in the above order for agreed conversion factors.

You can enter the agreed conversion factor in a business document in the Agreed Conversion Factors area in the Pricing Elements: Table 2 pricing view. In addition, in the Agreed Conversion Factors area, you can control for which area the entered agreed conversion factors are applied by selecting a value in the Applicable For column.

In the Pricing Elements area, you can see in the ConvFactors (Agreed Conversion Factors Are Allowed) column for a condition if the system can apply an agreed conversion factor. In the FactorAppl (Agreed Conversion Factor Applied) column, you can see if it has been applied.

The system applies the agreed conversion factor to a condition in the business document if the following prerequisites are fulfilled. Otherwise it uses the conversion factor from the material master:

  • You have selected the Conv. Factors (Agreed Conv. Factors Allowed) checkbox in Customizing for condition types.

  • The units of measure of the agreed conversion factor are the same as the unit of measure of the condition and one of the following values:

    • The base unit of measure

    • The unit of measure of the referenced adjusted quantity

    Note Note

    To fulfill the prerequisites above, the order of the values for the agreed conversion factor is not relevant.

    End of the note.

The system automatically copies the entered values of the agreed conversion factors into the subsequent documents, similar to the copying of manually changed pricing elements.