It is common that the cost of purchased raw material and components makes up around 75% of the direct cost of a product. The Latest Purchase Price (120), Average Purchase Price (130), and Estimated Material Cost (110)) purchase cost elements have the disadvantages that they are either based on history or have to be manually updated, and also they neither take lot size nor effective date into consideration.
The Planned Purchase Price (140) and Purchase Additional Cost Amount (160) cost elements use the effective date and the standard lot size when fetching the price. The system uses the same logic as when fetching a price for a purchase order line. The logic works as follows for elements 140 and 160:
The charges can be entered direct on a purchase order or they can be transferred from Supplier page or from Supplier for Purchase Part page. The value can refer to three different cases, as follows.
The existing functionality for calculating latest- and average purchase price considers charges entered on purchase orders. It considers case 1A, 2 and 3.
The Purch Charge on Supplier for Part element will fetch planned charges from Supplier for Purchase Part page. It will only fetch charges where the Distribute Charge By column has a NULL value. When creating PO lines for parts that have this setup, the system will automatically create case 1A for the user.
The logic works as follows for element Purch Charge on Supplier for Part 170:
The cost element Inter-Site Material Cost (510) uses the Multi-Site Costing Rule setup defined in Basic Data for Costing. It will only work for multi site planned parts, defined in Supplier for Purchase Part.
When the user calculates part cost object(s), the system also stores additional information about the planned purchase cost (for example supplier number and currency code) in the cost module. The user can start a background job that simulates of how the cost of an end product or a subassembly will change if a certain currency changes or if a certain supplier adjusts their prices. The job is almost a copy of the normal Cost Rollup logic, but it loops through the logic 11 times for a specific supplier/or specific currency code. It simulates price change variation for a supplier/exchange rate variation of a specific currency in the interval -50%, -40% … 40%, 50%.