What is Condition Technique in SAP?

To discuss the Condition technique in sap,

The condition technique is used to define pricing across applications. For example, it is used in the SAP SD (Sales & Distribution) module as well as in the SAP MM module. The goal of the condition technique is to calculate the effective price in a purchase order. Master conditions are simply conditions defined with the condition technique. While this section is not essential to your understanding of master conditions in purchase orders, it does provide useful background information on the mechanism for determining pricing in Purchasing.

The Basic elements of the condition technique,
The condition technique consists of four main elements:

• Condition types
• Condition tables
• Access sequences
• Calculation schema (pricing procedure)

These concepts are important for understanding how the system determines pricing in master conditions.

Condition type is a representation of a pricing element. Condition types exist for discounts, surcharges, and freight costs, for example. You use condition types to enter pricing in purchasing documents. You learned how to specify condition types when entering pricing in quotations and purchase orders, for example.

Condition table defines the combination of fields (the key) that identifies an individual condition record. The system stores the condition data you enter in the form of a condition record. For example, when you enter a vendor’s pricing in a purchasing info record with reference to a material master record, the key of the condition table includes the vendor number and the material number.

The actual pricing information – such as the gross price and any discounts – is stored in a condition record under this key.

Access sequence is a search strategy that the system uses to find condition records for a particular condition type. The access sequence determines the sequence in which the system searches condition records for a valid price.

Price calculation schema (pricing procedure), The calculation schema (also known as a pricing procedure, but the same mechanism can also be used to calculate tax amounts, period-end rebates, or costs, for example) is a group of condition types, defined in a particular sequence. It enables the system to determine that a particular set of condition types, in a specified sequence, apply in given circumstances. For example, the calculation schema determines which condition types apply to the gross price. The calculation schema also determines that the condition types for discounts are calculated in the effective price automatically.

With SAP MM Customizing, you can define price calculation schemas for specific vendors and/or purchasing organizations. The system searches for pricing data in condition records. The criteria it uses in the search depend on the keys in the condition table. The sequence of the search depends on the access sequence specified for the condition type. Which condition types are used in the search are defined in the calculation schema.

For example, suppose that you have just created an info record that specifies a 10% discount from the gross price. This condition is then stored in a condition record under the vendor and material number. When the material is ordered from the vendor in a PO, the system searches for the discount using the access sequence. The calculation schema ensures that the 10% discount is deducted from the gross price instead of the net price during the price calculation process.

The different ways of maintaining master conditions, you can maintain conditions in the following ways:

Prices, As this method you can list or maintain the conditions that determine the net price in a single info record or contract. You can enter the going market price for a material.

Discounts and surcharges, As this method, you can enter discounts or surcharges that apply to all info records or contracts meeting your pricing criteria.

Other condition types,If your company has defined its own condition types, access sequences, and condition tables, you can define master conditions that use these pricing elements.

Price changes, You can change pricing by a fixed amount globally.

Also See: How to Explain Output determination Procedure in SAP SD?