Setup example of external material delivery sales and freight
Modeling the internal trade flow may require setting up more than one intercompany trade scenario. This topic outlines the setup of intercompany trade scenarios External Material Delivery Sales and Freight for a multinational organization.
Situation
- Organization X is represented by logistical company X.
- Sales office S1 and warehouse W1 are part of organization X.
- Sales office S1 is located in Germany and is part of the German division of organization X.
- Warehouse W1 is located in The Netherlands and is part of the Dutch distribution center of organization X.
- Shipping office SHP1 is also part of the Dutch distribution center of organization X.
- Warehouse W1 is responsible for freight planning, but transport planning and all transport related matters are delegated to shipping office SHP1.
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The Dutch and the German branches of organization X have their own profit and loss registration.
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The German branch, with sales office S1, is represented by financial company XF1
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The Dutch distribution center, with warehouse W1 and shipping office SHP1, is represented by financial company XF2.
To fulfill a sales order to an external customer, S1 instructs W1 to deliver the goods to the customer. W1 sends an internal invoice to S1 to cover the costs for the goods and the delivery. The amount of the internal invoice is based on the gross sales order price. SHP1 invoices S1 for freight costs. The freight costs are based on the actual costs.