Production Boms and std costing

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Posted on by Reilly

Hi,

I am currently implementing this system and have ran across and issue that i can't seem to figur eout.

We buy raw material(aluminium) in sheets with a base unit of measure as EA, but we consume it based off of surface area in mm (mm^2).

We are using a standard costing method but seem to get a very large cost figure when calculating, and i believe this to be a Unit of measure problem:

Example: we buy 1 sheet in, this 1 sheet has a surface area of 2,220,000 mm^2, but the part we are cutting only needs to consume 2,086,821 mm^2 do we have to convert this to a decimal for it to be consumed and calculated properly in the production BOM or is there a way we can use SA.

Any help would be appreciated

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Robert Jolliffe 890 on at

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So this is a fairly simple issue but causes a lot of trouble.

In Items there is an Item Unit of Measure (I think it's in Related | Item | Unit of Measure). In this page you can enter in your EA is Qty. Per Unit of Measure of 1 - and technically therefore a mm^2 is 1 divided by 2,220,000 = .0000450450 however, this is limited to 5 decimal places, so it will be very innaccurate.

I would create a UofM for the item of m^2 which would be more like .45045 EA in a m^2

Then on your BOM you would say 2.08682 is the quantity and m^2 is the BOM UofM

Your engineering drawings etc can be in mm^2 - and frankly the BOM is for costing and inventory control, not for production instructions. The drawings are what the team should use to make the part.

Hope that helps

-Rob

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