Considerations for Setting Up Landed Cost Management

When setting up Landed Cost Management, consider the following:

• Map landed costs to cost components in Cost Accounting

• Create trade operation templates

Map Landed Costs to Cost Components in Cost Accounting

In the Setup and Maintenance work area, use the Manage Cost Component Mappings task in the Manufacturing and Supply Chain Materials Management offering to map landed costs to cost elements in cost accounting, and to capitalize landed costs.

Cost elements are the level where you want to track costs through inventory. Use cost component mappings to define cost component groups, which map cost components to cost elements, and to map source cost elements to destination cost elements when items are transferred from one inventory organization to another. The mapping group is referenced later by item cost profiles, which are used to specify cost policies for items.

Create Trade Operation Templates

A trade operation is used to capture and allocate the landed cost charges that are incurred for material shipments. Trade operations can be modeled on a single shipment or a group of shipments. A trade operation template can be used to create trade operations quickly, in cases where a business performs similar trade transactions and makes regular shipments.

Use the Create Trade Operation Template page to set up the most frequently incurred charges, and the amounts for these charges. When you create a trade operation by using the template, all of the charges and related information are automatically copied onto the trade operation.