# Free Goods Determination – Usage Of Calculation Types

This document is targeted at SAP SD functional consultants with knowledge of basic free goods determination configuration and sales orders. However the document is easily understandable to anyone with basic SAP knowledge. Please find below the definitions, configuartion details and related examples. (The XML format is attached as well)

## Usage of calculation types

Calculation types can be used to provide varied options in which free goods can be calculated and assigned for the orders. It provides flexibility in the manner free goods is calculated based on the customers need. Standard SAP provides 3 default calculation types explained in detail below.

## Calculation Type 1 (Pro rata)

### Definition

System calculates the free goods in correct proportion to the document (ordered) quantity.

### SAP setup

Path :  SAP Menu -> Logistics -> Sales and Distribution -> Master Data -> Conditions -> Free Goods -> Create/Change

1)       1) Minimum Quantity = 100 ( this means that if the ordered quantity is less than 100 KGs , then these free goods conditions would not be applicable for that sales order).

2)       2) From = 5 and are free goods = 1 (indicates that for every 5 items of the material ordered there would be 1 item given as free inclusive, meaning 4 normal goods and 1 free goods. In case of “Free goods exclusive” settings it would have been 5 normal goods and 1 free goods).

3)       3) Calculation Type = 1 ### Examples

If customer orders 128 KGs, then the system calculates 26 KGs as free items. 128 *(20/100) = 25.6 = 26(rounded) ## Calculation Type 2 (Unit reference)

### Definition

System calculates the free goods with reference to the ‘From’ field in the free goods record (i.e for quantities which are multiples of the quantity in field ‘From’. In case the ordered quantity is a non-mutiple of the quantity in field ‘From’, the free goods quantity is truncated)

### SAP setup

Path :  SAP Menu -> Logistics -> Sales and Distribution -> Master Data -> Conditions -> Free Goods -> Create/Change

1)       1) Minimum Quantity = 100 ( this means that if the ordered quantity is less than 100 KGs , then these free goods conditions would not be applicable for that sales order)

2)       2) From = 5 and are free goods = 1 (indicates that for every 5 items of the material ordered there would be 1 item given as free inclusive, meaning 4 normal goods and 1 free goods. In case of “Free goods exclusive” settings it would have been 5 normal goods and 1 free goods)

3)       3) Calculation Type = 2 ### Examples

With unit reference of 5 units (The ‘From’ field in the free goods master record), when the ordered quantity is not in multiples of the reference units, the free goods will be the truncated value.

Therefore, if customer orders for 129 KGs (a non-multiple of the reference 5 units), then the system calculates 25 KGs as free items. 129 *(20/100) = 25.8 = 25(truncated) ## Calculation type 3 (Whole units)

Definition

System calculates and assigns the free goods with reference to the ‘From’ field in the free goods record only for whole units(i.e only for quantities which are multiples of the quantity in field ‘From’). In case ordered units is a non-multiple of the refernce units i.e. the quantity in field ‘From’ , system assigns zero free goods for that ordered item.

SAP setup

Path :  SAP Menu -> Logistics -> Sales and Distribution -> Master Data -> Conditions -> Free Goods -> Create/Change

1)       1) Minimum Quantity = 100 ( this means that if the ordered quantity is less than 100 KGs , then these free goods conditions would not be applicable for that sales order)

2)       2) From = 5 and are free goods = 1 (indicates that for every 5 items of the material ordered there would be 1 item given as free inclusive, meaning 4 normal goods and 1 free goods. In case of “Free goods exclusive” settings it would have been 5 normal goods and 1 free goods)

3)       3) Calculation Type = 3 ### Examples

If customer orders 125 KGs which is a multiple of 5 (the reference unit), then the system calculates 25 KGs as free items. 125 *(20/100) = 25 If customer orders 126 KGs which is a non-multiple of 5 (the reference unit), then the system assigns zero free items. Note: All SAP screenshots are from SAP ECC 6.0 version.

Reference(s)

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