5 Cost Management

This chapter contains the following section:

• Define an Expense

Landed Cost

Landed Cost is the total cost of an item received from a vendor, inclusive of the supplier cost and all costs associated with moving the item from the supplier's warehouse or factory to the final destination (warehouse or store).

Estimated Landed Cost

Estimated Landed Cost (ELC) is the bottom-up cost estimate created by the buying organization. ELC is composed of cost components from the supplier, trading partners, item, country of sourcing/manufacturing, and banks that are brought together during the PO creation to develop an estimate of costs associated with purchasing a particular item on the current PO.

Cost Components

Cost components are combinations of individual expenses, assessments and the calculations associated with that expense or assessment.

Define an Expense

The Cost Component Maintenance window has been updated to include the expenses in Brazil.

To view the new expenses, do the following:

Navigate: From the RMS Start Menu, select Control, then select Landed Cost.

1. In the Contents Of Landed Cost, select Cost Component Maintenance.

2. In the Contents Of Cost Component Maintenance, select New/Edit. The Cost Component Maintenance window appears.

   Figure 5-1 Cost Component Maintenance Window

   
   

   In Brazil, apart from item's unit cost, the other cost components that may appear on the NF are – Freight, Insurance and Other Expenses.

   The Expense Category list in the Cost Component Maintenance window now includes two new options. The two options are as follows:

   • Freight – This expense category is used to identify freight type expenses.

   • Insurance – To identify insurance type expenses

   The expense category Misc is used for Other Expenses.

   Figure 5-2 Cost Component Maintenance Window