What is moving average price in SAP MM-IV - Invoice Verification?

SAP Term: moving average price

• Component: MM-IV

• Component Name: Invoice Verification

• Description: A price that changes in consequence of goods movements and the entry of invoices and is used to valuate a material. The moving average price is calculated by dividing the value of the material by the quantity of material in stock. It is automatically recalculated by the system after each goods movement or invoice entry.

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• Key Concepts: 
  Moving average price is a pricing method used in SAP Materials Management (MM) Invoice Verification (IV) to determine the price of goods and services. It is calculated by taking the average of all the prices of the same material over a certain period of time. This method is used to ensure that the price of goods and services is fair and consistent.
  
  How to use it: 
  In SAP MM-IV, moving average price can be used to determine the price of goods and services. To do this, the system will take the average of all the prices of the same material over a certain period of time. This average will then be used as the price for the goods or services.
  
  Tips & Tricks: 
  When using moving average price in SAP MM-IV, it is important to ensure that all prices are up-to-date and accurate. This will ensure that the price determined by the system is fair and consistent. Additionally, it is important to keep track of any changes in prices over time, as this could affect the accuracy of the moving average price calculation.
  
  Related Information: 
  Moving average price is just one of many pricing methods available in SAP MM-IV. Other pricing methods include fixed price, cost plus pricing, and market-based pricing. Additionally, there are various tools available in SAP MM-IV that can help with setting and managing prices for goods and services.