Types of margin control

Before you can specify the parameters for (price) margin control or gross margin control, you must select the Margin Control check box in the Sales Order Parameters (tdsls0100s400) session. Next, you can decide which type of margin control you want to use.

(Price) margin control

For (price) margin control The target price and sales price are compared and evaluated against the margin limits, as specified in the Items - Sales (tdisa0501m000) session.

Depending on the Target Price for Margin Control field in the Sales Order Parameters (tdsls0100s400) session, the target price is:

The sales price from the Items - Sales (tdisa0501m000) session.
The suggested retail price from the Items - Sales (tdisa0501m000) session.
The standard cost of the item from the Item - Costing (ticpr0107m000) session.
The selling price found after searching in Pricing.

Note: If the item is an effectivity unit, upgrade prices are included in the sales price, the suggested retail price, and the selling price. You can view the upgrade prices for a specific effectivity unit in the Effectivity Unit (tcuef0102m000) session.

Gross margin control at detail level

To control gross margins at detail level, in the Sales Order Parameters (tdsls0100s400) session:

Select the Gross Margin Check Lines check box
Specify the Base Price for Gross Profit Calculation field to calculate the gross profit percentage

For gross margin control, the target price always is the item's standard cost, as specified in the Item - Costing (ticpr0107m000) session, or if an effectivity unit is involved, as specified in the Effectivity Unit (tcuef0102m000) session. The target price and the sales price are used to calculate the gross profit percentage. This percentage is evaluated against the margin limits, as defined in the Items - Sales (tdisa0501m000) session.

Gross margin control at header level

To control gross margins at header level, in the Sales Order Parameters (tdsls0100s400) session:

Select the Gross Margin Check Headers check box
Specify the Base Price for Gross Profit Calculation field to calculate the gross profit percentage

For gross margin control, the target price always is the item's standard cost, as specified in the Item - Costing (ticpr0107m000) session, or if an effectivity unit is involved, as specified in the Effectivity Unit (tcuef0102m000) session. The target price and the sales price are used to calculate the gross profit percentage. This percentage is evaluated against the margin limits for a certain order or quotation, as defined in the Sold-to Business Partner (tccom4110s000) session.