Re: BPCS Cost-related Question

[Lmittman@xxxxxxx]

Dana:

Here is my suggestion for addressing the Lot Size and Setup Issue:

Problem Analysis:

1.  As you mentioned, "Set-up time does not relate to the lot/batch size, 
it's 
constant".  That means that the Set-up cost will be the same regardless of 
the size (i.e. Quantity) of a Shop Order.

2.  However, in BPCS, an Item's cost is stored in individual cost elements in 
the Cost Master (CMF) File.  Therefore, all costs elements (including 
Set-up), must be expressed in terms of a Cost per Unit (i.e. per Stocking 
Unit of Measure).

3.  CST600 (Load Standards from Routings) will calculate the Set-up Cost by 
using the Routing Set-up Time and the corresponding Rate in the Workcenter 
File.  However, this total cost must somehow be expressed as a Per Unit value 
in order to be placed in the corresponding Cost Bucket for Set-up Costs.  
Therefore, BPCS divides the total cost by the Lot Size in order to determine 
a Set-up Cost per Unit.

NOTE:  The BPCS business assumption here is that the Lot Size expresses the 
usual Quantity in which Shop Orders are released.  Therefore, dividing the 
total Set-up Cost by the Lot Size will result in a usual Per Unit Setup Cost. 

4.  In your situation, it appears that the Lot Size (for planning purposes) 
is NOT necessarily the same value as the Lot Size for costing.  In addition, 
since Standards are normally set at the beginning of the year, finance cannot 
permit changes in the Lot Size which would in turn impact these standards.

Solutions:

One solution would be to provide another Lot Size field for Costing purposes. 
 This field would be independent from the current Lot Size field in the Item 
Master (IIM) and Facility Planning (CIC) files.  The costing related programs 
that use the Lot Size would be changed to retrieve this new Costing Lot Size 
field.

NOTE:  This solution assumes that the base BPCS logic for Setup Costs does 
support your business requirements.

However, if your method for calculating Setup Costs is different from the 
base BPCS logic, then you would need to define for me what it is.  A 
different solution could then be suggested.

Please feel free to contact me with any questions about this approach.  I can 
be reached via e-mail or at my office (847) 831-9388.

Thanks.

Les Mittman
BSI Consulting, Inc.
(Specializing in BPCS implementation and support for 17 years)


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***  This reply is in response to the e-mail message below.  ***
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Subj:    BPCS Cost-related Question
Date:   9/27/99 9:21:59 AM Pacific Daylight Time
From:   Dana.M.Buker@dupontpharma.com (DANA M. BUKER 992-4724)
Sender: owner-bpcs-l@midrange.com
Reply-to:   BPCS-L@midrange.com
To: bpcs-l@midrange.com (bpcs-l)

One of our Finance users asked the following:

We are having problems keeping the set-up time constant when we change 
the lot size of an item.  This not only costs the item incorrectly, it also 
messes up capacity planning data.  The coding options for costing and 
reporting 
labor in work centers are all based in some form or fashion on the number of 
units produced.  Set-up time does not relate to the lot/batch size, it's 
constant.

Are there any BPCS users who may have a work-around for this?



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