What is trade-off zone in SAP MM-PUR - Purchasing?

SAP Term: trade-off zone

• Component: MM-PUR

• Component Name: Purchasing

• Description: The second of three delivery schedule time zones defined in a scheduling agreement. With the firm zone, the trade-off zone determines the degree to which schedule lines represent a binding order, or purchase commitment. Like the firm zone, the trade-off zone is specified in days. If the orderer cancels a schedule line that is in this zone, the vendor can invoice for the cost of input materials purchased to manufacture the scheduled quantity, but not for production costs. Schedule lines in this zone are less binding than in the firm zone.

Smart SAP Assistant

• Key Concepts: 
  Trade-off zone is a feature in SAP MM-PUR Purchasing that allows users to define a range of acceptable prices for a particular material or service. This range is referred to as the trade-off zone and it helps to ensure that the best possible price is obtained for the material or service. 
  
  How to use it: 
  To use the trade-off zone feature, users must first define the range of acceptable prices for a particular material or service. This can be done by entering the minimum and maximum prices in the trade-off zone field. Once this is done, the system will automatically compare the current price of the material or service with the range of acceptable prices and determine if it falls within the trade-off zone. If it does, then the purchase order will be created with the current price. 
  
  Tips & Tricks: 
  When defining a trade-off zone, it is important to consider both the minimum and maximum prices. The minimum price should be set at a level that ensures that you are not paying too much for the material or service, while the maximum price should be set at a level that ensures that you are not paying too little. It is also important to keep in mind that the trade-off zone should be adjusted periodically as market conditions change. 
  
  Related Information: 
  For more information on using SAP MM-PUR Purchasing, please refer to SAP's official documentation on Purchasing and Inventory Management. Additionally, there are many online resources available that provide helpful tips and tricks for using SAP MM-PUR Purchasing.