RE: costing vs. capacity

[Beth Norris <BNorris@xxxxxxxxxxx>]

Julie, 

Thanks for the response!  We originally set everything up to work as you
described which works great for capacity planning.

Unfortunately, we have discovered that the # of operators in the routing is
used for capacity only.  It does not effect the cost roll-up, therefore lies
our problem.    Accounting is not happy with this set-up...and they are the
ones asking us to set up more than one work center so that the labor rates
can be set based on the number of people. 

Do you know another way to set up multiple labor rates for the same work
center based on item number?

Thanks,
Beth




-----Original Message-----
From: JClancy@iworksoftware.com [mailto:JClancy@iworksoftware.com]
Sent: Thursday, July 26, 2001 9:52 AM
To: BPCS-L@midrange.com
Subject: Re: costing vs. capacity



Beth,

The routing is the appropriate place to express the number of operators an
Item needs to be built, not the work center. The work center rate is set up
as the rate per hour per person.

In the routing you would define the total run hours needed, based on your
basis code and the number of operators for that item.  Capacity then
divides the number of hours by the number of operators to determine the
amount of capacity hours that are required (elapsed clock time).  The cost
roll up would use the 20 hours of labor.

For example,  the routing has 20 hours per 10,000 pieces and 2 operators.
The capacity generation would show a load of 10 run hours for every 10000
pieces needed.

If you want to stay with your two work centers you need to redefine the
capacity in each.  Maybe 50/50, 60/40 etc., based on history.  This still
makes visibility difficult, but is better than saying both have full
capacity.


Julie Clancy  CPIM  CIRM
Education Consultant
iWork Software

Office: 1-336-852-0455 EXT: 6118


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