Modeling for Manufacturing Purposes

Activity-Based Management lets you use routing information from manufacturing to set up activity driver information within the system. Activity-Based Management can determine which activity is performed on which cost objects along with the quantifiable measures for that relationship. It uses Bill of Materials (BOM) information from manufacturing and transforms the components within the BOM hierarchy into cost objects in Activity-Based Management. In addition, Activity-Based Management can maintain the BOM structure. This is important because, once the Activity-Based Management calculation is finished, each component contains cost information. The roll-up of these costs using BOM hierarchy results in a total indirect cost of the resources, activities, and cost objects. Then, the indirect cost information calculated from Activity-Based Management output is directed back to the PeopleSoft Cost Management environment.

To set up models for manufacturing purposes, create a combination model and start the Routing Information engine to set up your drivers.