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Microsoft Dynamics GP (Archived)

Manufacturing Orders/Receipts with multiples resulting products

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Posted on by Aida 185
Hi all,

Hi all, 

I'm novice in the manufacturing module, so I’m trying to understand its functionalities.  At this moment I'm not sure about how to handle a specific company's requirement.  This requirement regards to the following: one of the production processes results in multiples finished goods, using the same raw material (input cow carcass and output several meet cuts plus certain sub-products, like bones).  As much as I have seen about the Manufacturing Orders in Dynamics, it refers just to one resulting product.  I read in the manual about the By-Products that you can specify in the bill of material or in the Manufacturing Receipt (entering the quantities in negative to aggregate it to the inventory), but my understanding is that By-Products refers to sub-products.  It is By-Products the right way to handle this requirement?  How is calculated the production cost of these By-Products?

Many thanks in advance

Aida

 

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  • Aida Profile Picture
    Aida 185 on at
    Re: Manufacturing Orders/Receipts with multiples resulting products

    Many thanks Bron, very usefull your answer and recommendations

  • Suggested answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    Re: Manufacturing Orders/Receipts with multiples resulting products

    By products are NOT sub products of the primary product, they are additional products.  Originally they were called scrap but people found ways to use them or, as in your case, tried to use software that created one primary product to create many.

    Ok, Bron told you how to add the quantites of these to your inventory.  The costing is a bit more complex that described, however and is different if periodic (STNADARD) than any other.   If the costing is NOT Standard, then the cost of the finished product is the sum of the cost of the components.  So if your components have a pre-manufacturing cost of $2 then $2 will be taken OUT of WIP for every by-product generated, reducing the amount in WIP and thus the amount taken to FG for the primary product.

    If you are using Standard Cost, then the cost of the by-product is taken out of WIP at the Standard Cost of the By-Product, reducing the amount in WIP.  Of course, the primary product goes into inventory at it's standard cost, reducing WIP and the difference is posted to manufacturing variances.

    The down side to by-products and costing is that their cost is never affected by manufacturing.  The primary FG will have its current cost updated but not the by product.

  • Suggested answer
    Bron Profile Picture
    Bron 4,887 on at
    Re: Manufacturing Orders/Receipts with multiples resulting products

    Hi Aida -

    By products in a BOM (negative bom qty) is the only method of creating an inventory increase transaction for a related FG receipt.

    In your example, if bones are in BOM as a negative 1 - when the FG receipt is posted - the FG receipt will occur and a separate inventory transaction will put bones into inventory (qty = 1).

    It works pretty well. Regarding Cost - if the FG has a cost of $50 and bones has a cost of $2 - then the FG receipt will be $48 - the cost of the byproduct is subtracted from the FG receipt.

    The byproduct will go into inventory at $2 and if sold or used in another bill will be valued at $2.

    The byproduct must be an inventory item - it can be actual or periodic cost and can even be lot tracked if you desire.

    In scenarios like this I recommend you have a test company that you can use as a 'sandbox' where you can test transactions freely.

    Good luck

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    Re: Manufacturing Orders/Receipts with multiples resulting products

    Have you had any response to this question?

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