What is index-based price in SAP LO-CMM - Commodity Management in Logistics?

SAP Term: index-based price

• Component: LO-CMM

• Component Name: Commodity Management in Logistics

• Description: Commodity Management in Logistik Price that is determined based on an index.

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• Key Concepts: 
  Index-based pricing is a pricing method used in SAP LO-CMM Commodity Management in Logistics. It is based on the price of a commodity index, such as the London Metal Exchange (LME) or the Chicago Mercantile Exchange (CME). The index-based price is calculated by taking the current index price and adding a margin to it. This margin can be either fixed or variable, depending on the agreement between the buyer and seller.
  
  How to use it: 
  In SAP LO-CMM Commodity Management in Logistics, index-based pricing is used to determine the price of a commodity. The index-based price is calculated by taking the current index price and adding a margin to it. This margin can be either fixed or variable, depending on the agreement between the buyer and seller. The index-based price can then be used to determine the purchase or sale price of a commodity.
  
  Tips & Tricks: 
  When using index-based pricing in SAP LO-CMM Commodity Management in Logistics, it is important to keep track of the current index prices and margins. This will ensure that you are always getting the best possible price for your commodities. Additionally, it is important to keep track of any changes in the market that could affect the index prices and margins.
  
  Related Information: 
  Index-based pricing is just one of many pricing methods available in SAP LO-CMM Commodity Management in Logistics. Other pricing methods include cost plus pricing, market based pricing, and negotiated pricing. Additionally, there are various tools available in SAP LO-CMM Commodity Management in Logistics that can help you manage your pricing strategies more effectively.