Calculating Costs for PeopleSoft Supply Planning

You can define specific BOM and routing combinations that can be extracted to PeopleSoft Supply Planning. This ensures that planning processes use the most accurate costs as the main driver when making sourcing decisions.

To specify BOM and routing combinations that can be extracted to PeopleSoft Supply Planning:

  1. Create BOM and routing codes for an item.

  2. On the Define Business Unit Item - Manufacturing page, select the Use Prdn Option Maintenance option to enable the system to select all BOM and routing combinations that have the Incl Plan (include in planning) check box selected on the Production Option Maintenance - Definition page.

  3. Use the Define Production Options component to link the BOM and routing codes together and (optionally) assign them to production areas.

    Select the Include in Planning check box to specify which BOM and routing combinations should send to the planning engine.

  4. Create production IDs and production schedules for the item.

  5. Run the Production Option Costing process.

  6. Verify the results using the Review Sourcing Templates component.

  7. Run the Optimization Table Load process (PL_LOAD_OPT).

To use the Define Business Unit Item - Manufacturing page to specify BOM and routing combinations that can be extracted to PeopleSoft Supply Planning:

  1. Create BOM and routing codes for an item.

  2. On the Define Business Unit Item - Manufacturing page, select the Use BOM and Routing Defaults option to :

    1. Limit the number of BOM and routing combinations that are extracted to PeopleSoft Supply Planning by entering a BOM code or a routing code on this page. If you enter a value in the BOM Code or Routing Code fields, then the Production Option Costing process only uses that value. You can use this feature to cost all BOMs with one routing or vice versa.

    2. Cost every possible BOM and routing combination by leaving the BOM Code and Routing Code fields blank.

  3. Create production IDs and production schedules for the item.

  4. Run the Production Option Costing process.

    This process rolls up production option costs based on the specific BOM and routing combinations.

  5. Verify the results using the Review Sourcing Template component.

  6. Run the Optimization Table Load process to pass costs to the planning engine.

Note: If the Production Option Costing process has not been run, PeopleSoft Supply Planning use the item cost based solely on the primary BOM and routing.

Sourcing Template

If there is a sourcing template for the item, then that template determines the sequence of production, purchase, and transfer options. If there is no sourcing template, then the template is loaded in lowest cost order.

Note: If the costing utility has not been run, then the system uses the item standard cost when creating the item's sourcing template.

Page Name

Definition Name

Usage

Define Business Unit Item - Manufacturing Page

MFG_ATTRIB

Select the Use Prdn Option Maintenance option to enable the system to select all BOM and routing combinations that have the Incl Plan (include in Planning) check box selected on the Production Option Maintenance - Definition page.

Production Option Maintenance - Definition Page

EN_PDO_BR

Use this page to define production options and effective-dated BOM and routing combinations that can be extracted to PeopleSoft Supply Planning.

Production Option Costing Page

CE_PRDNCST_REQ

Calculates the production option costs for items, based on the as of date. This ensures that a more accurate cost, based on specific BOM and routing combinations, is sent to PeopleSoft Supply Planning for each production option.

Review Sourcing Templates - Sourcing Template Page

PL_SOURCE_DTL

Review the results of the Production Option Costing process.

Use the Production Option Costing page (CE_PRDNCST_REQ) to calculates the production option costs for items, based on the as of date.

This ensures that a more accurate cost, based on specific BOM and routing combinations, is sent to PeopleSoft Supply Planning for each production option.

Navigation:

Cost Accounting > Item Costs > Update Costs > Production Options Cost Update > Production Option Costing

The Production Option Costing process calculates the cost of items to be sent to PeopleSoft Supply Planning. This utility considers makeable items, including primary items and co-products (make items) but not buy items. If an associated primary BOM exists for an item and it is a co-product on an associated primary BOM and also has its own BOM, then both the item's BOM and its associated primary BOM are included in the costing.

For a routing with operation yield, this process captures the detailed costs at the operation-sequence level by calculating yield loss, maintaining extended precision cost fields, and storing detailed calculations in the CM_PRODCOST_DET record.

For single output BOMs, the system calculates, according to cost element, the BOM and routing combination total this level and lower-level cost, and then stores these values in the full cost fields. It then divides these values by the output quantity (same as BOM quantity for single output BOMs) to get the per unit cost.

For multiple output BOMs, the system also adds any waste by-products costs and subtracts recycle by-products costs from the full batch this level and lower-level costs. Therefore, in order to calculate the (per unit) cost for the primary and co-products, the system uses this formula:

Item Per Unit Cost = (Output Cost % * Full Batch Cost) / Output Qty