What is rack pricing in SAP IS-OIL-DS-MAP - Marketing, Accounting and Pricing?

SAP Term: rack pricing

• Component: IS-OIL-DS-MAP

• Component Name: Marketing, Accounting and Pricing

• Description: Price which is the FOB free on board price for oil products leaving a refinery. The rack price does not include transportation costs and is used in conjunction with the DRC, differential reference code to group customers ship-to parties together for pricing purposes. A customer, for example, could pay the rack price, which is like a discount. Rack prices can be subject to fluctuations and may then have to be corrected in the system.

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• Key Concepts: 
  Rack pricing is a pricing strategy used in the oil industry. It is a pricing system that sets a fixed price for a certain quantity of oil, regardless of the market price. This system is used to ensure that the oil company can make a profit, even when the market price of oil fluctuates. 
  
  How to use it: 
  Rack pricing is used by oil companies to set a fixed price for their products. The company will set a price for a certain quantity of oil, and this price will remain the same regardless of the market price. This allows the company to make a profit, even when the market price of oil fluctuates. 
  
  Tips & Tricks: 
  When setting rack prices, it is important to consider the current market conditions and the cost of production. This will help ensure that the company can make a profit, even when the market price of oil fluctuates. It is also important to consider customer demand and competition in order to set prices that are competitive and attractive to customers. 
  
  Related Information: 
  Rack pricing is part of SAP IS-OIL-DS-MAP Marketing, Accounting and Pricing component. This component provides tools for managing marketing, accounting and pricing activities in the oil industry. It also provides tools for setting up rack pricing strategies and managing customer relationships.