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Cost Generation

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This function is applied to calculate and update the cost of parts, assemblies and/ or sub-assemblies that have a predefined product structure (excluding purchased and customer furnished parts).


It is therefore applied to manufactured, interplant, phantom and subcontract parts to calculate the costs, and then update the cost in the Part Financial Year Data or Part Price Scenario table after correcting any errors that might have been displayed.


The divisional settings Allow Current Year Cost Update via Costgen and Allow Next Year Cost Update via Costgen , govern whether the cost of parts can be updated during the specific financial year.

The function explodes the product structure from top to bottom until the level of MRP planned purchased or customer furnished parts is reached. It then proceeds to roll-up and calculate the costs for all higher level parent parts until the routine iscompleted and a result is achieved for the specified cost generation parent part number.


The errors are displayed on the Costgen Errors tab and the results of the calculations are displayed on the Costgen Outputtab.


The function basically applies the product structure definition, part master data, part financial year data, part operations (routings) and cost center rates to extract or calculate the various cost elements for material, subcontract, transfer, labor and variable/fixed overhead costs.  Depending on the options executed on the Costgen Options tab, the catalogs (external organization part price buying records) and the currency conversion data can also be applied.


The Cost Generation function permits the run to be performed for past, present or future financial years.  Various calculation methods and additional options are alsoprovided for and the cost generation results can be viewed in either summary or detailed mode and can also be exported to and printed from a user defined applicationsuch as MS word or Excel.


Where updates are performed for fixed account parts in the current financial year, existing stock, WIP and Suppliers suspense general ledger balances will be updated and revaluation Journal Entrys will automatically be triggered.


A cost generation can be run for a project and internal serial number.  To be able to run a cost generation for a project the user must perform the following: Function "Budget Scenario". A budget scenario is to be created and is to be applicable to "Part Price". After successful add of the budget scenario you must then link the applicable projects to the scenario. You must also link authorised employees to the scenario. These employees will be allowed to insert data to the Part Project Price Scenario table via the cost generation function.


To run a cost generation for a project you must select the part number and tick the option "Perform Project Specific Cost Generation". You must then select the Scenario (This is the scenario code that will be used when data is inserted to the table "Part Project Price Scenario during the update run) and then the Project. The project field will only populate with projects linked to the scenario.  For project's that enforces serial number effectivity you must then select the applicable Serial Number. A serial number must be selected to enable the "Cost Options" tab. On the "Cost Options" tab, select the options and run the cost generation, During the processing of the product structure each cost generation part will be evaluated against the data in the table "Project Part Requirements" and if the part for the selected project has been identified as a customer furnished item it will be costed as zero. Also if the part is a manufactured part identified as customer furnished then the structure of the manufactured part will not be shown.


If a scenario is selected on the Costgen Options tab:

a) If the scenario code exists in the table "Part Price Scenario" it will be defaulted in the     frame "Part Price Scenario" field "Scenario".

b) If the scenario code exists in the table "Cost Centre Rate Scenario" it will be defaulted in the frame "Cost Centre Rate Scenario" field "Scenario".


After evaluating the data and you  want the data to be inserted into the table "Part Project Price Scenario", use the update functionality on the cost generation. Do the necessary selections and click the run button. The system will evaluate if the signed on person is authorised to run the update by comparing authorised employees on the budget scenario(Scenario specified on the Cost Gen Options tab). If the scenario status is created then any of the authorised employees will be able to run the update but if the scenario status is approved then only authorised employees that have the profile "Approved Budget Scenario Override" will be able to perform the update.


Two fields will be interpreted from the table "Product_Master"




The cost generation will evaluate these settings to determine if updates will be allowed to be performed for parts that have no structure. The system will use the product master code of the selected cost generation part.


The cost generation will also evaluate if updates will be allowed for cost generations that has errors.


The cost generation can also cost External Operations. The cost will be calculated from the table "Part Operation External" for the operation where the "Apply as Default" = 1


On the output tab a new column was added "Cumulative Lead Time" this column will display the total lead time in hours of the part and its lower level linked parts.


The cost generation functionality will allow the user to cost a purchase part in the same way as n manufactured part that is if the purchased part has a structure and operations linked to it.

On the part master function on the tab "Financial Year data" there is a new frame "Purchased Part Cost Roll-Up" with two check boxes, in order for the cost generation to perform the roll up as above the field  "Allow Cost Roll-Up" must be checked

Inquiry Mode

If the option "Include Purchased Part Cost Roll Up" is checked the cost generation procedure will in the process of exploding the structure when it gets to a purchase level read the new part master setting and if allowed explode the purchase structure and roll the cost same as for a manufactured part i.e. the purchase part will have material labour overhead and fixed overhead costs.

Errors will also be handled in the same way as for a manufactured part.

Update Mode

If the option "Include Purchased Part Cost Roll Up" is checked the cost generation will when updating the part financial year data of the purchased part add the labour, overhead and fixed  overhead costs as part of material cost.


RELATED TOPICS:                Cost Center Rate Scenario function

                         Part Price Scenario function