What is reference group in SAP IS-AFS-SD - Sales and Distribution?

SAP Term: reference group

• Component: IS-AFS-SD

• Component Name: Sales and Distribution

• Description: Controls which finished product should serve as reference for the FERT generator during the production of a new finished product. A reference group includes a finished product whose master data is transferred by the FERT generator to the new finished product. In addition, a configurable material is assigned to the reference group. The assignment finished product - reference group is binding, whereas a configurable material can be repeatedly assigned to new reference groups.

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• Key Concepts: 
  Reference groups are used in the Sales and Distribution (SD) component of SAP to group together materials that have similar characteristics. This allows for easier management of materials and simplifies the process of creating sales orders. Reference groups can be used to group materials by product type, price, or any other criteria that is relevant to the business. 
  
  How to use it: 
  Reference groups can be created in the SAP system by going to the Sales and Distribution (SD) component and selecting the “Reference Groups” option. From there, users can create a new reference group and assign materials to it. Once a reference group is created, it can be used when creating sales orders or other documents related to sales and distribution. 
  
  Tips & Tricks: 
  When creating reference groups, it is important to consider how they will be used in the future. For example, if a reference group is created for a specific product type, it may be beneficial to include additional criteria such as price or availability in order to make it easier to manage in the future. 
  
  Related Information: 
  Reference groups are closely related to material master records in SAP. Material master records contain detailed information about each material, such as its description, price, availability, etc., while reference groups are used to group materials together based on certain criteria.