Operation Yield for Estimating Losses during Work Order Execution

You can include the impact of operation yield when calculating the standard cost of items using the Roll up Costs process and when accounting discrete work orders.

Operation yield indicates the yield expected out of an operation. A value of 1 indicates that there isn't any loss. However, any value less than 1 indicates a planned loss in that operation.

Let's consider an example of a work definition with four operations and the operation yields defined. The cumulative yield and reverse cumulative yield are calculated as listed in the table.

Operation	Operation Yield	Cumulative Yield	Reverse Cumulative Yield
10	0.9	0.9	0.648
20	0.8	0.72	0.72
30	1.0	0.72	0.9
40	0.9	0.648	0.9

For standard costed items, the Roll up Costs process includes the operation yield defined at each operation to scale up the quantities of components and resources required. The View Rolled-up Costs page shows the Operation Yield defined in the work definition and also the Reverse Cumulative Yield for each operation.

The rolled up cost shows the extra items and resources used to factor in the operation yield as Estimated Scrap Loss. The Reverse Cumulative Yield is used to calculate the extra quantities that need to be considered based on the operation yield defined in the work definitions.

The formula used is:

Estimated Scrap Loss (for an input) = [(1-Reverse Cumulative Yield) / Reverse Cumulative Yield] * Scaled Quantity

In the View Rolled-up Costs page, the Estimated Scrap Loss node shows the quantities of input lost due to operation yield. Every input (material and resource) with variable basis type has estimated scrap loss due to the operation yield.

The standard costs that are published show the Estimated Scrap Loss as a separate cost level.