Formula cost allocation

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Posted on by HN-11010453-0

Hi guy,

I have an issue related to cost allocation in formula.

In a formula setup, I have materials A, B, and C, and co-products D and E. When calculating costs:

Materials A and B should allocate costs to D.
Material B, C should allocate costs to E.

This situation involves plastic molding, where the input includes plastic and two different circuits (Circuit 1 and Circuit 2). The outputs are two types of wheel rims, each containing one circuit, while plastic is shared between both rims.

The challenge: The cost of circuits fluctuates heavily (30–40%), making percentage-based allocation inaccurate. Any suggestions for a better approach?

Thank you in advance!

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Dynamics 365 Supply Chain Management