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Supply chain | Supply Chain Management, Commerce
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Production Variance - price variance - quantity variance

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Hi experts,

I have below concerns for Production Variance:

1. The quantity to calculate the standard cost for Finished good is different with the estimated quantities from BOM Line

Let said: the consumption per unit is 40.90, but on the standard cost the quantities are round into 42

On standard cost calculation:

pastedimage1648805462312v1.png

On Production estimation:

pastedimage1648805508286v2.png

2. The different between Net realized quantity and Allowed quantity: The Unit for these items are the same on Product master data and BOM Line. (Unit: each)

pastedimage1648805564696v3.png

3. The different between Allowed cost/Allowed quantity and Standard cost price of these items:

Resource Net realized quantity Net realized cost Allowed quantity Allowed cost Allowed cost/Allowed quantity Current active Standard cost
M0001 10.00 38.50 10.00 38.50                                                   3.85                            3.85
M0002 10.00 789.90 10.00 789.90                                                 78.99                          78.99
M0003 10.00 229.90 10.00 229.90                                                 22.99                          22.99
M0004 409.00 11,145.25 411.00 11,445.00                                                 27.85                          27.25
M0008 13.00 10,400.00 11.00 16,000.00                                           1,454.55                        800.00
M0021 11.00 495.00 10.00 450.00                                                 45.00                          45.00

Thank in advance,

Best regards,

Thu,

  • Aparisi82 Profile Picture
    Aparisi82 2,180 on at
    RE: Production Variance - price variance - quantity variance

    what is the specific question you have?

  • Suggested answer
    Osvel Reyes Profile Picture
    Osvel Reyes 42 on at
    RE: Production Variance - price variance - quantity variance

    Can you take a look into the calculation group from your BOM?

    I am not quite sure if I may be understanding correctly the issue, but maybe the parameter on the calculation group can be different to the standard cost, just make sure the calculation group for your Finished good is using the same cost price model.

    Navigate to the released product, under the Engineer section, you will find the Calculation group field, go to details and make sure the group is using the Inventory price as Cost price model.

    Calculationgroup.PNG

    Otherwise you will calculate your BOM from different sources:

    • Item cost price – The cost price from the Released product table is used.
    • Item purchase price – The purchase price from the Cost price field on the Purchase tab of the Released product list page is used.
    • Trade agreements – You can configure trade agreements for specific combinations of items and vendors, or for specific sites. Then, when you select the Trade agreements option here, the trade agreement that you created for the purchase price together with the item and site will be used.
    • Inventory price – The current inventory value for the item is used to calculate the unit cost in the BOM calculation. A unit cost price is calculated only if the posted quantity and the physical quantity are more than 0 (zero).

    If you are using a different parameter than the Inventory Price indeed, just select it and run the calculation BOM again and let me know your findings.

    I hope this helps.

    Best,

  • WillWU Profile Picture
    WillWU 22,350 on at
    RE: Production Variance - price variance - quantity variance

    Please wait for the help from functional consultants

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