What is derivation strategy in SAP CO-PA - Profitability Analysis?

SAP Term: derivation strategy

• Component: CO-PA

• Component Name: Profitability Analysis

• Description: The derivation strategy is a list of steps used for deriving unknown characteristic values.

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• Key Concepts: 
  Derivation strategy in SAP CO-PA Profitability Analysis is a set of rules that define how the system calculates the profitability of a product or service. It is used to determine the cost of goods sold, revenue, and other related values. The derivation strategy is based on the cost elements and cost objects that are assigned to the product or service. 
  
  How to use it: 
  The derivation strategy is used to calculate the profitability of a product or service. To use it, you must first assign cost elements and cost objects to the product or service. Then, you can define the derivation strategy by setting up rules for how the system should calculate the profitability. 
  
  Tips & Tricks: 
  When setting up a derivation strategy, it is important to consider how different cost elements and cost objects will affect the profitability calculation. For example, if you assign a high cost element to a product or service, it will have a greater impact on the profitability calculation than if you assign a low cost element. 
  
  Related Information: 
  For more information about setting up derivation strategies in SAP CO-PA Profitability Analysis, please refer to SAP Help documentation. Additionally, there are many online resources available that provide detailed instructions on how to set up and use derivation strategies in SAP CO-PA Profitability Analysis.