This chapter covers the following topics:
The estimated landed cost for an item on a landed cost shipment is calculated as the unit cost of the item plus any additional transportation charges such as, freight, insurance, packaging, and so on. These additional charges equate to cost factors in Landed Cost Management. When defining cost factors in the Cost Factors window you specify whether these cost factors are refundable or nonrefundable by selecting or not selecting the Refundable check box on the Cost Factors page.
Refundable cost factors have the payment amount tied to the acceptance of the item transported and any returns or corrections impact the charge amount. Nonrefundable cost factors are the charges that are paid to the charge provider irrespective of the results of the item inspection that may lead to either returns or corrections. Generally, the nonrefundable charges have well defined rates for a service rendered such as a container delivery that is fully paid no matter the item that is transported.
After a return to supplier or a correction has been made associated to the item on the landed cost shipment you can recalculate the landed cost for the item due to the change in item quantity. To recalculate the landed cost at that time you have the option to run the Landed Cost Recalculation Processor concurrent program. This program references the Refundable flag associated with the cost factors (charges) to determine if the associated charges for the item are refundable or not. From there depending on whether the charges are refundable or nonrefundable it can recalculate the landed cost for the item and its associated charges. This program:
Creates new charge line adjustments for each refundable charge.
The charge line amount is adjusted proportionally to the new quantity to keep the unit landed cost constant. For refundable charges this formula is used: New Charge Amount = Latest Unit Charge Allocation * Current Landed Cost Quantity.
In the case where there is more than one charge line with the same refundable cost factor, all existent charge line amounts are adjusted independently.
Does not create charge line adjustments for each nonrefundable charge.
A new charge line adjustment is not created for nonrefundable cost factors. Nonrefundable charge line amounts are not adjusted because the charge amount stays the same no matter what the quantity is on the landed cost shipment. In the case of lower net receipt quantities resulting from returns, the unit landed cost increases.
During the processing of landed cost management shipments different sorts of transactions can occur against the item associated with the landed cost shipment. For example, the estimated landed cost for an item on a landed cost shipment may have already been created for a specific quantity and charge amounts. Then a quantity of that item on the landed cost shipment may be returned to the supplier or a correction in received quantity for that same item may occur in Oracle Purchasing. To recalculate the new estimated landed cost for the item on the landed cost shipment after these sorts of transactions have occurred you have the option to run the Landed Cost Recalculation Processor concurrent program.
Note: If you do not run the Landed Cost Recalculation Processor concurrent program, the landed costs impacted from returns to suppliers and corrections depend on the item invoices being sent to Landed Cost Management from Oracle Payables.
The Landed Cost Recalculation Processor concurrent program performs these actions:
Retrieves correction and return to vendor receiving transactions that are not yet processed by Landed Cost Management.
Note: Receiving transactions for Oracle Process Manufacturing organizations are skipped as Oracle Process Manufacturing is not able to handle estimated landed cost updates for completed shipments.
Note: Landed cost shipments that have been marked as “Pending Matching” must be either manually submitted or submitted through the “Submit Pending Shipments” concurrent program, so that they can be impacted by the Oracle Payables invoices imported to them, prior to being retrieved by the Landed Cost Recalculation Processor.
Landed cost shipments that have been marked as “Pending Update” must be either manually submitted or have their updates discarded, prior to being retrieved by the Landed Cost Recalculation Processor.
Creates shipment lines adjustments to update the quantity in the landed cost shipment with the new net receipt quantity after the return to supplier and receiving correction transactions.
Creates charge line adjustments to update the charge line amounts in the landed cost shipment according to the cost factor refundable or nonrefundable behavior.
Charge line amounts associated to a refundable cost factor are adjusted proportionally to the new quantity.
Charge line amounts associated to a nonrefundable cost factor are not adjusted.
Note: Taxes are considered as nonrefundable. No tax amount adjustments are created.
Charge line amounts with billed information are not updated irrespective of the refund behavior. The billed amounts of the charge lines are calculated based on the invoice matches, and are adjusted by credit or debit memos in Oracle Payables.
For full returns and corrections, the remaining unallocated charge line amounts for nonrefundable cost factors are displayed in the Summary tab of the View Shipment page.
For more information on viewing unallocated charge line amounts, see:
You have the option to create the INL_CUSTOM_PUB.Get_ChargeRefundFlag hook to define your own logic to adjust the amounts and charges and in which circumstances they occur. Using this hook enables you adjust charges of their cost factor “Refundable” setup. By default, Get_ChargeRefundFlag returns the Refundable Flag of the cost factor, for a given receiving transaction type (this hook must only be called for "RETURN" or "CORRECTION" transaction types). You can write your own logic to overwrite it.
Parameters:
| Type | Name | Initialized with |
|---|---|---|
| IN | p_rcv_transaction_type | Receiving Transaction Type (RETURN or CORRECTION only) |
| IN | p_cost_factor_code | Cost Factor Code |
| IN | p_refundable_flag | Refundable Flag (Y/N) |
Recalculates the estimated landed cost for the partial calculations of the landed cost shipment.
Posts the landed cost variances to Oracle Costing to keep the item cost current.
Use this procedure to recalculate estimated landed cost after return to supplier and correction transactions:
Prerequisites
To Recalculate Estimated Landed Cost After Return to Supplier and Correction Transactions
Navigate to the Submit Request window.
Select Landed Cost Recalculation Processor in the Name field.
Click the Submit button.
You can schedule this concurrent program according to your needs. Shorter execution intervals tends to generate higher numbers of landed cost adjustment transactions to achieve an increased item cost accuracy with the negative impact of higher reconciliation efforts.
Longer calculation intervals consolidate the quantity updates of a shipment in a single calculation run, generating fewer landed cost adjustment transactions with easier reconciliation. The downside is the item cost takes longer to be updated.
The Decision dialog box appears displaying the Request ID assigned to the concurrent program request. Plus, it asks if you want to submit another request.
The Landed Cost Recalculation Processor concurrent program is initiated and the program recalculates the estimated landed cost for landed cost shipments.
Click the No button
Navigate to the Requests window.
Locate the request ID created for the concurrent request and verify that the concurrent program request you submitted completes successfully (Phase = Completed, Status = Normal).
You can view the results of the Landed Cost Recalculation Processor using the View Shipments page - Summary tab and the Shipment Hierarchy page.
In the case of fully returned or corrected lines, the Estimated and Actual Amounts fields display zero amounts and the Unit Landed Cost field displays a zero amount in the Shipment Hierarchy page and the amounts of nonrefundable charges left in the shipment are displayed in the Unallocated Amounts column in the View Shipment page - Summary tab.
For more information, see: