Moving Average Price changing after procurement of free goods

[Aicha_000]

Dear SAP Experts 

I have a client requierement to not update the moving avec rage price of a material in case of free goods, 

I did the bellow test in SAP, and in the PO 3, the moving average was significately changed, what are the SAP good practices related to managing moving average and free goods

1- Is there any way (in standard config) where the moving average is not updated after free goods acquisition

2- what is the operationnal sap best practice related to dealing with free goods in logistic process, do I create a seperate materia code to deal with thos material in order to keep the moving average correct, do we cretae a seperate material type for them. What are the best SAP practices please to propose to a client regarding that ?

	Material	Price	Qty	Moving Average
PO 1	M0007	100	10	100
PO 2	M0007	90	20	93,33
PO  3 : Free Goods	M0007	0 gratuit	40	40	Moving Average Updated when procuring free goods

Thank you so much 

Regards, 

Aicha

[jagdeepsingh83 · Accepted solution]

The moving price will change if you receive the material in the same valuation area and valuation type (if exists)-Best practice recommended by SAP- if the Vendor providing this material and your company now owns it then you would let the moving average price get changed as moving average price works on the concept of qty available and the amount available at time GR or IR. 

if you are looking for work around as suggested by others too 

1- You can use split valuation -where you can keep the price as 0.01 and receive the material in that valuation 

2. You can create another plant for receiving the goods but I would not recommend it as it will lead to redundant stock movements, data maintenance, and impact MRP or maybe your security roles 

3. you can create different materials--not different material types -- but again what are the advantages? as you have to do data maintenance, losing track of materials and also usability will be impacted 

Make sure you have pros and cons presented to your customer for each option and if you check with your customer finance team and convince your clients then you can save yourself all the work around. As this volume may be very less and impact on MAP may be minimal.

The recommendation is to receive this material as the main material so that you can save yourself and your client headaches later when it come to practically using this material. From FI and SCM point of view, there is nothing wrong with MAP price changes when you do free goods receipt. 

[Dominik_Tylczynski]

Hello @Aicha_000 

As per SAP Glossary moving average price

A price that changes in consequence of goods movements and the entry of invoices and is used to valuate a material. The moving average price is calculated by dividing the value of the material by the quantity of material in stock. It is automatically recalculated by the system after each goods movement or invoice entry.

Therefore, when a free goods are received the total value of the stock goes down and thus the moving average goes down. That is not just an SAP best practice, that is common sense.

You could use split valuation to separate free goods separately, however the total moving average price of the material will still be reduced.

What is the rationale for the requirement?

Best regards

Dominik Tylczynski

[RaymondGiuseppi]

Before the next fiscal/tax audit, check with the accounting and legal departments to make sure this request is legitimate. Is it a request from control, logistics or sales 😎

In this case, as suggested by @Dominik_Tylczynski, use split valuation (Valuation Type) or even  a different plant (Valuation Area), you could (sould) even declare the new valuation record to use 'standard price' and not 'MAP'.

7m ago

[Dominik_Tylczynski]

A separate valuation area (plant) for free goods might be an option, however side effects have to be considered, e.g. increased master data volume, MRP planning plans on plant (MRP area) level so it won't consolidate regular stock and free goods.

[RaymondGiuseppi]

Not consolidating regular stock and free goods may be some kind of requirement?

(I have already put such free goods in a project/customer stock, they were free because of a supplier warranty owned by the end customer)

But wait for the original poster's explanation of his request.

[Aicha_000]

Dear @RaymondGiuseppi, The stock is owned by the company it is not supplier or customer stock, those materials are given free to the company for tests, after the tests, if the results are good the company places an order for the material with big quantities, and those free goods considered samples are comming from different suppliers, The company wants to follow those samples stocks without creating a seperate material code in the same time not impacting the moving average (But we must see them is stock in order to follow also the quality tests) . My question is also to check if their request is reasonnable

[Dominik_Tylczynski]

I think batch management is the right tool to manage samples from different suppliers.

[Aicha_000]

Dear @Dominik_Tylczynski, The batch is already activated and yes we can easily find those free samples via batch but my issue is that the moving average is updated each time i do a good receipt for those samples, do you mean that I have to activate split valuation per batch ?

[RaymondGiuseppi]

Look at the online documentation for Batch Management (LO-BM) and especially for Split Valuation with Batches.

[Dominik_Tylczynski]

Hello @Aicha_000 

I've not said that you need to activate split valuation on batch level. I'd say you don't need that.

First of all, you should challenge the requirement not to modify moving average prices when receiving free samples. That's simply not logical.

Then you can use split valuation with a valuation types "regular goods" and "free samples".

Best regards

Dominik Tylczynski

[Aicha_000]

Dear @jagdeepsingh83, Thank you much for the details, I appreciate it