Contribution Margin Ratio Check

A contribution margin ratio check is a function in M3 Customer Order Processing that ensures that an item is not sold for a contribution margin ratio that is too low. The check is made during customer order line entry.

Description

Contribution margin ratio checks are used as checks during customer order entry. During entry, the contribution margin ratio is calculated and then compared to the lowest acceptable contribution margin ratio.

This check ensures that the contribution margin ratio of a customer order line is not less than a specified value. This value is defined for each item and facility in 'Item. Connect Facility' (MMS003/E).

Contribution Margin Ratio Check can be done in one of the following ways:

0 No check is made.
1 A check is made. The user is not informed, but the information is saved in the statistics.
2 A check is made. The user is warned, but can choose to ignore the warning.
3 A check is made. The user cannot ignore the warning. An order line cannot be entered with a ratio that is too low.

This check is specified for each customer order type and is activated in 'CO Type. Open' (OIS010/I).

Before you start

To use this supporting function, you have to meet these prerequisites:

Follow these steps

  1. Contribution Margin Ratio Definition

    The minimum contribution margin ratio allowed (in percent) is entered in 'Item. Connect Facility' (MMS003/E). If it is not entered, no check is made for the item.

  2. Contribution Margin Ratio Check Activation

    The check is activated for each customer order type in 'CO Type. Open' (OIS010/J). The check is made when customer order lines are entered.

    When the check is activated, the contribution margin ratio for the item is calculated and checked against the item's minimum ratio allowed. This value may not fall below the defined percentage.

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