How the Internal Material Transfer Price Is Calculated

You can estimate the transfer price when creating a transfer order to transfer goods between internal organizations.

Settings That Affect The Transfer Price

The transfer price is based on the answers to these questions:

• Is the transfer order crossing business?

• What are the transfer pricing options?

• Do the shipping and receiving inventory organizations for the internal material transfer belong to a single business unit?

How The Transfer Price Is Calculated

The application calculates the transfer price according to these rules:

• If the transfer order is crossing business units, the transfer price is calculated based on the transfer pricing method specified in the configurable transfer pricing rules for the financial route between the shipping organization and the receiving organization.

• If transfer pricing options are enabled, you can derive the transfer price based on the shipping organizations transaction cost, Oracle Pricing, or a third-party pricing service.

• If, for the internal material transfer, the shipping and receiving inventory organizations belong to a single business unit, then Oracle Supply Chain Financial Orchestration uses the cost of the item in the source organization as the transfer price.

• If, the transfer source is a requisition line, Oracle Fusion Cloud Self Service Procurement calls Supply Chain Financial Orchestration directly when creating transfer orders to get the price.

Once the transfer price is calculated, Supply Chain Financial Orchestration calls the tax application to determine the tax applicable on the transfer price.