Managerial Decision Making With The SAP R/3 Information System

BA 652 SAP Assignment 2 :

Managerial Decision Making with the SAP R/3 Information System

Name: _______________________

Date: ____________

Dr. Morgan

In the previous assignment, you learned about the sales and distribution process for SOS Inc.’s beach cruiser division. In this assignment you will further develop your skills with SAP by accessing historical sales data for SOS Inc. through a number of preconfigured reports. In each exercise you will be presented with a task to complete and in some cases a problem to be discovered and solved.

Exercise 1: Material Sales Analysis

In Exercise 1 you will create a report showing sales information for the beach cruiser model S using a standard analysis in the Sales Information System. Follow the drilldown below to access the standard analysis report.

From the SAP Easy Access User menu: Logistics è Sales and Distribution è Sales Information System è Standard Analysis è Material

Enter the following information:

· Material: BC-S

· Sales Organization: SC70

· Date: 04/01/2003 to 09/28/2003

· Leave all other boxes as is

Now click the execute button (looks like a small clock with a green checkmark) to generate the report. You should now see a report telling you that during the six month period you entered, 1,205 Beach Cruisers model s were sold (Invoiced qty), generating revenue of $1,297,875 (Invoiced Sales). While this report gives us the big picture, what if we want to see all the individual orders for the Beach Cruisers? Click the Switch drilldown button and select Date. Click the enter button and you will be presented with a breakdown of all the sales orders over the six months which included Beach Cruisers.

Question 1 .1 : What was the invoiced sales amount for Beach Cruisers model S for June 6th 2003? __________________

When you have finished answering the question above, return to the SAP Easy Access User menu using the green back button. Do not save your analysis.

Exercise 2: Sales Districts

Last year, SOS management determined that Beach Cruiser sales differed according to the region in which customers were located. For this reason, SOS Inc. has broken their Beach Cruiser sales efforts into three distinct sales districts. These districts are: Arizona, Utah, and New Mexico. By using sales districts, SOS management is better able to track marketing and sales efforts. Breaking sales down by material and customer does not aggregate data into regions, making the success or failure of geographically applied marketing techniques hard to measure. Now let’s look at the same data from Exercise 1 broken down by sales district.

From the SAP Easy Access User menu: From the SAP Easy Access User menu: Logistics è Sales and Distribution è Sales Information System è Standard Analysis è Sales organization

Enter the following information:

· Sales organization: SC70

· Material: BC-S

· Date: 04/01/2003 to 09/28/2003

· Leave all other boxes as is

Click the execute button to generate your report. The report you are presented with does not really give you a lot of useful information, unless you wish to know the Invoiced Sales for the SC70 Sales organization. To display the sales district information; click the Switch drilldown button and select Sales district. Now click the enter button to see the Sales district breakdown.

Question 2.1 : At first glance, which sales district could use a little more attention from the SOS marketing and sales staff? _________________________

Question 2.2: Double click on the Arizona Sales district to display the individual customers included in the sales district. What is the Invoiced sales amount for Tempe Outfitters? _____________________

Question 2.3: Double click on Tempe Outfitters, and switch the drilldown to date to see the customer’s individual orders over the six month reporting period. From a marketing manager standpoint, what do you find interesting about the data in this report? ________________________________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

When you have finished answering the question above, return to the SAP Easy Access User menu using the green back button. Do not save your analysis.

Exercise 3: Distribution Channel Analysis

So far you have looked at reports regarding sales data broken down by material sold, and sales district. In this exercise you will narrow the SOS sales data to focus on distribution channel. Currently, SOS sells Beach Cruisers in the wholesale and direct sales markets. For this reason, SOS has two different distribution channels in the SAP system: wholesale (WH) and direct (DI). Having two distinct distribution channels allows SOS to easily categorize customers and apply different pricing models. For example, during the 6 month analysis period you have been using, the price for one Beach Cruiser model S is $1000 for wholesale customers and $1300 for direct sales customers. For this reason it becomes useful to view sales data filtered according to distribution channel. Now let’s generate a customer sales analysis according to distribution channel.

From the SAP Easy Access User menu: Logistics è Sales and Distribution è Sales Information System è Standard analysis è Customer

Enter the following information:

· Sales organization: SC70

· Material: BC-S

· Date: 04/01/2003 to 09/28/2003

· Leave all other boxes as is

When you click the execute button to display your report, should see a breakdown of sales by individual customer. Click the Switch drilldown button, select Distribution channel, and click the enter button. Now you can see the sales data according to wholesale and direct sales customers. Now let’s take a quick look at the outcome of the pricing difference between the two types of customers. Click the Choose key figures button (to the right of the “Top N…” button). Remove Credit memos from the list on the left by highlighting it and clicking the single triangle pointing to the right. Add Invoiced sls: cost (the cost of the invoiced sales), by highlighting it in the list on the right and clicking the single triangle pointing to the left. The key figure list on the left side of the screen should now contain Incoming orders, Invoiced sales, and Invoiced sls: cost. Click the enter key to see your new report. As you can see, the cost of sales for the wholesale customers is approx. half the revenue from the sales (Invoiced Sales). The cost of sales for the direct sales customers is approx. 40% of sales revenue. Since the Beach Cruisers cost the same to produce for either customer class, we can be certain that the difference in the ratios is due to the higher price charged to the direct sales customers.

Now let’s do some more analysis from the marketing manager perspective. Double click on the wholesale sales distribution channel title to see the information for just those customers. Switch the drilldown to show Sold-to-party. You should now see sales information for the individual wholesale customers.

Question 3.1: Move through the sales data for the individual wholesale customers by double clicking on the customer names. As you examine customer reports do you see anything troubling about the sales for any of the customers? If so, what?

________________________________________________________________________

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

When you have finished answering the question above, return to the SAP Easy Access User menu using the green back button. Do not save your analysis.

Exercise 4: Accounts Receivable Analysis

So far, all your reports have concerned sales data. This is no surprise since you were generating standard reports using the SAP Sales Information System. In this section you will start to look at some financial reports.

From the SAP Easy Access User menu: Information Systems è General Report Selection è Financial Accounting è Reports for Accounts Receivable Accounting è Customer Balances è Customer Sales

Enter the following information:

· Company code: CC70

· Reporting periods: 04 to 09

· Leave all other boxes as is

When you the execute button you will see a nicely formatted (and printable) customer sales report.

Question 4.1: According to the sales report, who is SOS Inc.’s best customer?

____________________________________

Now let’s look at the financial report in a slightly different light. Return to the SAP Easy Access User menu by clicking the green back button. Double click on the Customer Balances in Local Currency report (directly above the Customer Sales report you just ran).

Enter the following information:

· Company code: CC70

· Reporting periods: 04 to 09

· Leave all other boxes as is

Click the execute button to display the customer accounts receivable balances report.

Question 4.2: Keeping in mind that SOS Inc. requires immediate payment by customers upon delivery of goods, do you see a potential problem with one of SOS Inc.’s customers? _______________________________________________________________________________________________________________________________________________________________________________________________________________

Question 4.3: How does the information in the accounts receivable balances report change you opinion of the customer you identified in Question 4.1?

_______________________________________________________________________________________________________________________________________________________________________________________________________________

When you have finished answering the question above, return to the SAP Easy Access User menu using the green back button. Do not save your analysis.

Exercise 5: Export of SAP Reporting Data for Analysis and Report Drilldown

You will remember in Exercise 3, we changed the key figures of a report to try and determine a cost of sales to sales revenue ratio. Unfortunately the standard reports included in the SAP information systems do not give you the ability to create calculated fields to do custom mathematical analysis. For this reason, SAP allows report data to be exported to a PC file for further analysis.

From the SAP Easy Access User menu: Logistics è Sales and Distribution è Sales Information System è Standard analysis è Customer

Enter the following information:

· Sales organization: SC70

· Material: BC-S

· Distribution channel: DI

· Date: 04/01/2003 to 09/28/2003

· Leave all other as is

Using the Choose key figures button, remove Credit memos from the report, and add Invoiced sls: cost. Now export the report to your local computer as instructed in class. Open the report in excel, and create a new column to calculate the percentage of invoiced sales cost included in invoiced sales.

Question 5.1: Does your sales cost/sales revenue calculation make any of the customers stand out? If so, which customer(s)? ________________________________________________________________________________________________________________________________________________

Question 5.2: Knowing that the cost of the Beach Cruisers is the same for every customer, what would you say is causing the difference your sales cost/sales revenue ratio for the customer from Question 5.1? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Now let’s see if we can pinpoint the problem you have discovered through your excel analysis.

Returning to the SAP customer report, double click on the name of the customer you identified in Question 5.1. A report displaying all of the customer’s sales orders will be displayed. One of the more powerful functions included in SAP is the way in which reports are generated. To generate the report you are now looking at, SAP gathered information from several different documents. Instead of just reporting the information and forgetting about the documents, SAP creates a document trail enabling the user to retrace the report generation steps. This allows managers to locate and isolate problems identified through broader data analysis. In our case, we are concerned with a potential pricing problem with the customer you identified in Question 5.1. As we are now dealing with pricing, let’s switch to a financial report for that specific customer.

From the SAP Easy Access User menu: Accounting è Financial Accounting è Accounts Receivable è Account è Analysis

Enter the following information:

· Customer: 18 (the customer number for Alamogordo Land Racing)

· Company code: CC70

· Fiscal year: 2003

Click the enter button to see all the reported accounts receivable information for the customer. Double click on one of the debit entries for the customer to display the status report. You will see that the accounting item has been cleared. As this level of information does not give us any clues as to our problem, let’s drill down another reporting level. Double click on the Clrng doc. (clearing document) number. We can now see some basic information regarding the original sales order document for the customer. Now click Environment from the top toolbar, and select Original document. This is the original sales document SAP used as a base for the accounts receivable analysis report you generated. Highlight the first (and only) line on the sales document by clicking the small gray box to the left of the line. To see the pricing information for the sales order, click the small gold coin with the “5” on it at the bottom of the screen.

Question 5.3: According to the pricing data, what might be causing the ratio difference you observed in Questions 5.1 and 5.2? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Question 5.4: As a sales manager, what are a few actions you might take with this information? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

SAP Reporting BA 652 1