Dynamic Item Processor (DIP):

Definition: DIP offers an integrated way to process Cost or Quality based data in
an interface between CO and SD.
1) DIP is used for flexible handling of Resource Related Billing (RRB).
2) It is used for Result Analysis, Quotation for Service orders and also pricing
in projects.
The main processes covered by this tool are RRB and calculation of sales pricing.
DIP can process single objects like service orders or sales orders but it can also
work on complex structures like projects or order networks.
RRB of Sales Documents, Sales Order and Projects:
In RRB, DIP is used to select the Resources actually used of a service order or
sales order to generate a Debit memo request.
In is also possible to create both a debit memo request and a credit memo
request. So, values which are billed wrongly to the customer can be easily
credited to him.
The billing process include not only single object (sales order, service order). It is
also possible to bill an order network or even a whole project. In this case the
project must be assigned to a sales order via WBS element.
Pricing for Projects:
There are 3 business processes for Pricing for Projects.
1) Pricing based on an inquiry in SD
2) Pricing based on Easy Cost Planning in Project builder
3) Similar to process 1 but without Inquiry.

Pricing for Projects Based on an Inquiry:

As the title says it is necessary to create an inquiry which is account assigned to
a project before performing any pricing for projects.
From the Inquiry, the system takes the DIP profile (entered in the inquiry line
item under tab Sale B) to perform the pricing. And other details are taken from
the header, such as the partners and the sales are for the determination of
conditions and for the quotation creation later.
It is possible to create pricings not only for operative projects, but also for
simulations. The only limitation is that there must be at least the billing WBS
Elements in an operative project and the planned revenues from the quotations
must be always be updated to the operative project. To get planned revenues for
a simulation, you have to use billing plans which can be created out of the
pricing.
There can be several different pricings for a project in parallel. The pricings are
assigned to the billing WBS Elements.

Pricing for Projects Based on Easy Cost Planning in Project Builder

Another business process for pricing for Projects using the central maintenance
tool for projects in R/3 the project builder. The goal of this integrated approach is
to offer a facility for creating project Structures, calculating cost (using Easy cost
Planning) and calculating sales prices in a single transaction.
The big advantage of the pricing in project builder is that there is no need to
create separate inquiry in SD. Some additional values have to be maintained in
the project definition to the pricing to work. In the control tab the sales area
(sales org, distribution channel division) and the DIP profile must be set.
Additionally a sold-to-party must be added to the partners which requires a
partner determination procedure.
In DIP profile, only the source Easy cost Planning can be used for this process.
If u copy a project to another project, the sales pricing isnt copied as well.