Cost Variances (was MRP 4.05CD)

[MacWheel99@xxxxxxx]

Question of fact in this scenario from Al Macintyre (405 CD Evansville 
Indiana USA)

We know CST270 has bogus unreliable math with respect to calculating 
variances.
Does CST900 also use the same logic when updating files with actual cost from 
production?

How did Fran's company know they had cost variances that came from this 
scenario?

We have some serious cost variances but so far we have only managed to trace 
them to labor rate reporting variations & big discrepancies in actual cost of 
some raw material purchases.

We also are 405 CD heavily loaded with most of the applications.
We also adjust shop order quantity to actual producion, when the decision is 
made to stop production on some order that was for a different quantity.  We 
do this for several reasons.
If we are going to produce MORE than original order, we do not want BPCS to 
prematurely code order for purge.
If we are going to stop this production before order completed, perhaps 
because the customer order changed, then this helps to streamline the process 
of coding shop orders for closing.
If there are any material substitutions, we want accurate inventory 
backflushing.

MacWheel99@aol.com (Alister Wm Macintyre) (Al Mac)
AS/400 Data Manager & Programmer for BPCS 405 CD Rel-02 mixed mode OS/400 
V4R3 @ http://www.cen-elec.com 

Subj:    RE: MRP question 4.05CD
Date:   01/11/2001 11:44:36 AM Central Standard Time
From:   ClementF@CBFLEET.COM (Fran Clements)

WE TOO WERE DOING THIS, BUT SINCE WE ARE USING THE COSTING MODULE, WE HAD TO
STOP, BECAUSE ADJUSTING QUANTITIES ON SHOP ORDERS AFTER RECEIPTS WERE MADE
AFFECTS CST270 AND CAUSES US HUGE VARIANCES.  6.02

-----Original Message-----
From: Damon, Mitch 
Sent: Thursday, January 11, 2001 10:31 AM

Having encountered the same problem we are currently adjusting the shop
order quantity to match what is actually run, after the fact.  This removes
any component requirements but leaves the shop order open so that additional
issues to it or other adjustments can be made.

Mitch Damon, CPIM
Planning Systems Manager
Logistics - Rochester, NY
(716) 383-1070 ext.250

    -----Original Message-----
    From:   Zzbpcs@aol.com 
    Sent:   Thursday, January 11, 2001 8:36 AM

    Good day,
    We run BPCS 4.05 CD, full implementation ( all modules).
    Often, Shop Order Material Needed is not an exact qty.
    IE we expect to use 600 kg but actually issue 599.3 kg
    (the total qty rec'd on a lower level shop order).
    We have no intention of issuing the remainin 0.7 kg
    but, of course, since the shop order is still open (for as much as a
week for lab testing) MRP sees a requirement for the 0.3 kg and creates a
planned order
    for 600 kg (std lot size), and purchasing is triggered to but enough
raw material to make 600 kg.
    We used Minimum Planned Order % so we do not get an planned order
untill we need 1/2 a lot size ( 300 kg)
    but that simply delays the inevitable. That is, as soon as a
"legitimate" requirement arrives for a new planned order, we get one order
for 1200 kg ( new correct 600
    plus an additional 600 simply to satisfy the old remaining 0.3 from
the still open but basically completer shop order.
    We are going to try Order Policy "I" Incremental above the std lot
size with an increment qty of 3 or 7 or some "wierd" number so we easily
recognise it as a
    order qty simply to fulfill an 'unreal' demand.
    But, perhaps there is another way ??  
    We used to close out shop orders much more quickly.
    Now we added a routing step for the lab to do their testing and
report their time on that order, so the shop order is open much longer.
    Any suggestions ?

    Thanks
    Jim Barry
    ZZBPCS@AOL.COM
    413 - 283-2060
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