Hi All,

We are facing a problem related to customised item costing in PCS module which i will explaing with the help of an example.

There are two manufacture item - M1 & M2. M2 is a component of M1.
a routing has been defined(has a setup time and run time) for M2 and suppose the cost price of M2 is 10. Now if the M1:M2 relation is 1:1 then the cost price of M1 is 10. But if it is 1:2 ie for 1 M1 2 M2 are rquired then the cost price is calculated as 20. It is simply multiplying the cost price of child by the bom qty. But we dont want the setup time of the M2 to be considered twice. It has to be only 1. Because of this our standard cost prices are showing excess amounts than normal and if the there are many components in the BoM then the difference is pretty big.
Even the cost price for standatd item is calculated this way.

I rellay cannot understand this method of calculation. Do anybody face/faced the same problem. Can anybody explaing me the logic behind such a calculation. When contacted baan support i got an explanation that that is the standard functionality. But we are not satisfied with the explanation. Can anybody help me.

Thanks & Regards
Santosh
:confused:

Hi Santosh,
the cost calculation for standard manufactured items in Baan4 is ever based on economic order quantity. That means if you want to ignore the setup costs, take a large EOQ, like 999999. But have a look on your order method, which is deciding for lot size in your production order advices. If you set EOQ to a large value, take Lot for Lot with a minimum order quantity or others.
Now you have customized items and there is no EOQ. Calculation is based there on the quantity in project parts. But take care: If you setup a large value here, your total project costs will also be high. That is right for one-time-manufacturing, because if you produce items in quantity of 1 or 2 you cannot ignore setup costs.
Alternativly: M2 is a standard item with calculation based on economic quantity, M1 is a customized item, whitch needs 2 pcs of M2 with its standard price.
Hope that will help you.
regards Dirk

Hi Dfisch,

Thanks for the reply. My problem here is that the runtime for M2 should be considered only once even if in bom i have mentioned more that 1 qty. I will illustrate with a simple example.

M2 - setup time = 1 hr, Run time = 1 hr, operation rate = 100
Assuming no other costs standard cost for M2 is 200

if M1:M2 = 1:1 then Standard cost for M1 is also 200 assuming no other costs entered for M1.

But if the the ratio is M1:M2 = 1:2 ie for every M1 two M2 is required then the standard cost for M1 is 400. It is just multiplying the standard cost of M2 by the qty specified in the bom. But we want it as
(setup time(of M2) + (runtime(of M2)*bom qty)) * operation rate,
ie (1 + (1*2))*100 = 300. ie, the setup time should only be considered once.

Hope now u understood my problem. Is there any way i can get this result from the system?


Regards
Santosh