Hi,
you can get more info in following link,
http://help.sap.com/saphelp_crm70/helpdata/en/47/46ef14ea211a52e10000000a1553f7/frameset.htm
pls. note
1) You can define condition records for product substitution in SAP ERP. You also assign the
corresponding substitution reasons to the substitute materials in the ERP system. In addition to the
substitute materials, the substitution reasons also have to be transferred to CRM. Product
substitution can only take place on the basis of the conditions defined in the ERP system.
2) Depending on the substitution reason, either the substitute product or the ordered product will be determined .Product determination is not available in CRM Mobile Sales or in the Interaction Center WebClient.
3) Product determination is not carried out based on product availability. This means that if a product is not available, it will not be substituted with one that is available. If you want this to happen, use the rule-based availability check in SAP Advanced Planning & Optimization (SAP APO).
hope it helps,
regards,
PD