manufacturing standard routing cost

[Si Chen-2]

Hi Jacopo et al.--

I'm playing with manufacturing again.  I just ran a "Calculate costs"  
from Catalog manager's costs tab for PROD_COST, and it came up with  
an "estimated routing cost" of $1.00.  Is this correct?  It doesn't  
seem right to me.

Best Regards,

Si
[hidden email]

[Jacopo Cappellato]

This is indeed an area where the (upcoming?) automated test tool would
be beneficial.
However the number should be correct: in fact the cost information for
fixed asset standard costing are still pulled from the FixedAssetStdCost
entity, where the following entries are stored:

<!-- Deprecated: in the future cost information will be stored in the
CostComponentCalc entity; these entries can then be associated to a work
effort thru the WorkEffortCostCalc entity. -->

<!-- This is the standard cost per hour needed to setup the fixed asset
for the task -->
<FixedAssetStdCost fixedAssetId="WORKCENTER_COST"
fixedAssetStdCostTypeId="SETUP_COST" fromDate="2005-12-31 00:01:00.0"
amountUomId="USD" amount="2"/>

<!-- This is the standard cost per hour for the usage of the fixed asset
to perform a given task -->
<FixedAssetStdCost fixedAssetId="WORKCENTER_COST"
fixedAssetStdCostTypeId="USAGE_COST" fromDate="2005-12-31 00:01:00.0"
amountUomId="USD" amount="8"/>

Since, according to the PROD_COST's routing definition, in order to
manufacture one unit of this product, the setup time for the asset is 10
minutes and the unit task time is 5 minutes, we have:

setup cost: 10 * (2 / 60) = 1/3
usage cost: 5 * (8 / 60) = 2/3
total routing cost is: 1$

Jacopo

Si Chen wrote:

> Hi Jacopo et al.--
>
> I'm playing with manufacturing again.  I just ran a "Calculate costs"
> from Catalog manager's costs tab for PROD_COST, and it came up with an
> "estimated routing cost" of $1.00.  Is this correct?  It doesn't seem
> right to me.
>
> Best Regards,
>
> Si
> [hidden email]
>
>
>
>

[Si Chen-2]

Thanks for pointing that out!

On Nov 8, 2006, at 9:36 PM, Jacopo Cappellato wrote:

> <FixedAssetStdCost fixedAssetId="WORKCENTER_COST"  
> fixedAssetStdCostTypeId="USAGE_COST" fromDate="2005-12-31  
> 00:01:00.0" amountUomId="USD" amount="8"/>

Best Regards,

Si
[hidden email]

[Si Chen-2]

Jacopo,

I'm looking at this again, and yes I see the inconsistency between  
using this versus the WorkEffortCostCalc.  WorkEffortCostCalc is a  
fixed cost + total number of milliseconds (setup or usage) divided by  
a unit cost, whereas this is actually variable to both setup and  
usage time and is denominated by hours of usage.

It does introduced an issue if we make the switch, however: how many  
units will the fixed set up times in a production run be calculated  
against?  For example, EXAMPLE_COST has a $50 fixed setup charge and  
a variable charge of $10 per minute of runtime, and the standard step  
is 5 minutes, so if you run 1 unit, your standard production cost is  
$100 per unit.  If you run 100 units, you still have $50 of setup,  
$10 * 5 * 100 = $5,000 of runtime charges, so your standard cost  
becomes $5,050 / 100 = $50.50 of production costs.  (Sorry if these  
numbers aren't exactly right, but you get the idea...)


On Nov 8, 2006, at 9:36 PM, Jacopo Cappellato wrote:
This is indeed an area where the (upcoming?) automated test tool  
would be beneficial.
However the number should be correct: in fact the cost information  
for fixed asset standard costing are still pulled from the  
FixedAssetStdCost entity, where the following entries are stored:

<!-- Deprecated: in the future cost information will be stored in the  
CostComponentCalc entity; these entries can then be associated to a  
work effort thru the WorkEffortCostCalc entity. -->

<!-- This is the standard cost per hour needed to setup the fixed  
asset for the task -->
<FixedAssetStdCost fixedAssetId="WORKCENTER_COST"  
fixedAssetStdCostTypeId="SETUP_COST" fromDate="2005-12-31 00:01:00.0"  
amountUomId="USD" amount="2"/>

<!-- This is the standard cost per hour for the usage of the fixed  
asset to perform a given task -->
<FixedAssetStdCost fixedAssetId="WORKCENTER_COST"  
fixedAssetStdCostTypeId="USAGE_COST" fromDate="2005-12-31 00:01:00.0"  
amountUomId="USD" amount="8"/>

Since, according to the PROD_COST's routing definition, in order to  
manufacture one unit of this product, the setup time for the asset is  
10 minutes and the unit task time is 5 minutes, we have:

setup cost: 10 * (2 / 60) = 1/3
usage cost: 5 * (8 / 60) = 2/3
total routing cost is: 1$

Jacopo


Best Regards,

Si
[hidden email]