Hi,
We are working on the solution, which requires using lot pricing as opposed to standard costing for both raw materials and finished goods inventory. I need to understand what are the dangers behind lot pricing. It seems to offer a lot of flexibility in product costing and tracking the of the inventory.
Would anyone recommend using Lot Pricing functionality based on their experience and what would be the pros and cons.
I would greatly appreciate any advice/comment.
Thanks
Margaret

you are working on Baan IV or ERP?
Regards, Juli

We are on Baan IV c3.
Margaret

Lot pricing is very good to track inventory at lot cost as compared to standard cost which at times makes life difficult.

However, even where lot prices are used, when the transaction of Manufacturing comes in, the issue for manufacturing is done at standard price and the difference is treated as a lot difference. Thus the entire process does not happen in Lot price.

This could be a problem if you wish to track the entire production cycle at actual costs.

Hi, Sudarshan,

Exact same probelm we have right now in our new installation, how do i track the whole process through the lot price, as you said the production issue and the receipt seems to be feeding standard cost price to finance, also we have standard cost set to 0 for the lot control items. is there a way around this.

Sant.

Also Margret do you have the answer for my question.

Appreciate any help.

The problem is that you have your standard cost price set to 0.

You are obviously working with predfined lots (or else the lot would accept the standard cost price as the lot price), so it doesn't matter what the standard cost price is for your inventory (which is valued at lot cost). Ergo, you might as well use the actual standard price to track your production costs.

Hi Sant,
I am testing the scenario where purchased item (defined as lot valued item) has 0 standard cost and lot price reflects the actual price. I have designed the minor change to the way standard BAAN calculates the lot price of the production lot. It requires the recalculation of the tdltc004 record and update to the tdltc001 record for the item/lot/cost price component of the production lot upon the production order completion. The necessary information on the quantity/amount of the lot results (for the lots used in the production order) comes from tfgld410 table. The production lot is released for the otbounding only upon the closing of the production order (want to avoid any problems with shortage of the component valued at lot prices). The difference between the standard cost of the poduction item and the actual lot price is carried through all the way to the sales.
I would apreciate any comments/warning on the above solution.
Thanks
Margaret

Margret,
one thing come immediately in my mind here: Do you use subcontracting in those orders? if so, beware that (when using integration) the production order may not be closed until the subcontracting invoice is received in finance. That may take some time (up to months), during which you can't close the order and the lots are blocked.

Uli

Uli,
Thank you for your reply.
I am working on the way of propagating the lot result in case there are any modifications to quantities or price differences when invoice is paid, so I will not have to block the lot when the order is not closed. It will invlove recalculating the lot price and creating additional records in tfgld410-18 tables for the lots already shipped on the Sales Orders.

Any ideas on on how to approach creation of the corrective entries?
Margaret

Hi, Margret,

I am quite not clear on your reply, did you say you had to modify the baan script to get the lot price in tfgld410 for production issue? Please explain.

I am in the process of writing a oracle trigger on table tdilc401 that would populate ticpr300 record with the lot price in tdltc004 table, still there is a problem in lot result part, I donot know what to do.Help Help Help.

Thanks
Sant.

Sant,
I am not using the triger on the tdilc410 table but rather adding the extension to the tisfc0202m000 session. When the production lot is posted to inventory upon reporting the order complete the system reads the lot results from tfgld410 for the production order, adds them together by the corresponding CPCs, divides by the complete quantity and updates tdltc004, 001 accordingly. It is much simpler and allows the standard integration to update the financial transaction as standard BAAN scripts would do. I need to make sure, however that change to the amounts reported on the production order will not be made after part of the reported lot has been sold, so I block the lot upon completion and unblock when the order is closed. The access to the session ticst0203m000 has to be really very limited, since until I finish the solution for propagation of the production lot modification, manual correction will have to be made to the lots sold after reopening the order again for quantity/ hours adjustments.
Hope it helps, let me know the progress with the testing of the solution
Margaret