USES OF SPLIT VALUATION IN SAP MM

Uses of split valuation vary widely and encompass a series of events that can culminate to the necessity of this feature in the SAP MM as far as material management is of use in any company. These reasons are either those determined by the setting of the company or those arise from the use of the product by the company. There are several reasons that can result in the Split valuation adoption by a corporation varying widely from the common simple reasons to technical reasons that are only handled at the management level. These reasons are common among organizations and departments and the criteria almost similar. Some of the uses of Split valuation by companies are;

Variation in the times of deliveries of the products hence resulting in different stocking and different times of dispatch. The delivery of a product may as well limit the time during which such a product may be sold. Overstay of the product in the stores may result in change of the composition of the product mostly chemically hence changing the use of the product in the prevailing market. Such variation can see the new product either appreciate in price or depreciate in price hence the use of split valuation.

Obtaining a single product from different suppliers as well can have similar effect. Say a product A can be supplied by a supplier at a price that is very different from the second supplier. This can be due to the time of supply or variation of the packaging materials. Other reasons could be the location of the suppliers to the central stores and the work burden of each supplier. This results in varied valuation of the products which can as a results cause different prices. The organization may need a convenient way to document this and the split valuation in SAP material management turns out to be the best option.

Difference in grades of the product can as well affect the need for split valuation. Though the suppliers of a company may supply same type of a product, the quality or even quantity may vary depending with the type of scaling. This results in as well a variation in the prices of the product due to probably the costs of production that accounts for the difference in the grade or rather the quality of the product.

In house productions and externally sourced products as well will greatly vary in prices. Considering the transportation costs and other storage fees in the supplier’s warehouse, these costs are all accrued together and summed up in the final cost of sales of the product. This is in contrast to in-house productions which may not need to be transported before the sales.

From company to company there shall be a variety of reasons that may result in the assignment of the product with more than a single a price. Listed here are just but few of the many other uses that may arise per a company.