Cost Management Manual

AIM
COST MANAGEMENT MANUAL
Author:
Jay
Creation Date:
February 15, 2012
Last Updated:
February 15, 2012
Version:
DRAFT 1A
Cost Management Manual

February 15, 2012
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Company Confidential - For internal use only
CST: Define BOM Routings
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Contents
Document Control.......................................................................................ii
CST: Define BOM (Sample).........................................................................4
CST: Define BOM Routings.........................................................................5
Define Cost Types for new model................................................................8
New Cost Types.....................................................................................8
Copy Item Costs from Frozen......................................................................9
Copy Resource Costs from Frozen.............................................................10
Enter Item costs for purchased items.......................................................11
Collect DM Item costs..........................................................................11
Execute the standard cost rollup to compile the costs for the item:.........13
Information on Set Cost Controls..........................................................14
Copy Costs to Other Orgs..........................................................................15
Copy the cost to Frozen cost type.............................................................16
Open and Closed Issues for this Deliverable.............................................17
Open Issues......................................................................................... 17
Closed Issues.......................................................................................17

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CST: Define BOM (Sample)

BOM>Routings>Routings
Description: Use this form to define and update BOM default parameters. You use these
parameters to define modes of operation and default values that
affect other functions in Oracle BOM.
Using GUE as the base organization, other plants can reference or copy the GUE BOM for their
regions.
BOM for 1110000

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BOM>Routings>Routings
Description: Use this form to define and update BOM default parameters. You use these
parameters to define modes of operation and default values that
affect other functions in Oracle BOM.
Resources for BOT-PACK

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Resources for OVERHEADS

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Define Cost Types for new model

Cost Management >Setup>Cost Types
Description: Use this form to define the cost types for yearly, quarterly and What-if cost plans
New Cost Types

Verify creating the cost type for the correct organization before creating any cost types.
Each cost type for further use should be modeled as such:
Note on the Default Cost type : For items where costs have not been defined for the cost type, the
default cost type is used as the next source of costs that the cost rollup and the inventory value
reports use for items not associated with the cost type being rolled up or reported upon. You can
have a cost type default to itself. The default reflects the current organization's costing method:
Frozen for standard costing and Average for average costing.

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Copy Item Costs from Frozen

Cost Management >Copy Mass Edits > Copy Cost
Information
Description: Use this SINGLE request to copy the Frozen item cost to the new cost model.
This does not copy the resource costs. See the next steps for details on how to accomplish this.

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Copy Resource Costs from Frozen

Cost Management >Copy Mass Edits > Copy Cost
Information
Description: Use this SINGLE request to copy the Frozen resource cost to the new cost model.
This does not copy the item costs. See the previous steps for details on how to accomplish this.

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Enter Item costs for purchased items

Inventory>Costs>Item Costs
Description: Use this form to define-Item Cost information. Item costs details include cost
control information and basic cost information. Complete this for raw materials
Collect DM Item costs

A. Navigate Cost Management >Copy Mass Edits > Mass Edit Cost Information
B. Choose Report
a. Mass Edit Actual Material Costs: Generate costs for items based upon
purchasing activity. You can update item costs to be an average of or equal to actual
accounts payable invoices, open purchase orders, or historical purchase order
receipts for the specified date range.
i. Update material costs to open PO average: This edit uses a hierarchy of
dates when determining if the record falls within the specified date range.
The hierarchy is as follows: the promised date from the purchase order
shipment is used; if this date is not entered, the need-by date from the
purchase order shipment is used; and, if this date is not entered, the approval
date of the purchase order is used. The approval date always exists, as it is
generated by the system upon approval of the purchase order. The mass edit
uses only approved purchase orders.
ii. Update material costs to PO receipt average: This edit uses the
transaction date of the purchase order receipt into inventory when
determining if the record falls within the specified date range.
iii. Update material costs to invoice cost: This edit uses the accounting date
accounts payable used for the invoice.
iv. Suggest entering an item range of 020 to 02999
v. Enter a date range for accounting date of invoice to use in calculation.
vi. Material Sub-Element: Set to MAT-DM. (This request may also have to be
executed for MATERIAL if there are some raw materials with that assigned
sub-element )
vii. Based on Rollup attribute set to Yes, only those items that have a Based on
Rollup set to No, or all items.
viii. Indicate whether to print a cost type comparison report. If enabled, specify
the cost type to compare with the current cost type.

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b. Or Mass Edit Material Costs: Update material subelements by a fixed amount or

a percentage as appropriate for the basis type.
C. Submit Report
D. Re-run the report for the other Material Sub-Elements: MAT-DM

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Execute the standard cost rollup to compile the costs for the
item:
a. Responsibility Cost Management > Supply Chain Costing > Supply Chain Cost
Rollup
b. Run report Supply Chain Cost Rollup - No Report
i. Enter current Cost type working on.
ii. Enter the Organization
1. Run for GUE
2. Run for VR1
3. Run for DAR
4. Run for CHA

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Information on Set Cost Controls

The following content is added for the purpose of explaining this menu option.
The Set Cost Controls concurrent program is a new Mass Edit option.
Users can run it on a range of items or categories to update the based on rollup flag, the
defaulted flag, and/or the lot size in cst_item_costs.
The update options allow the fields to be explicitly set, or to be copied from another cost
type in CIC or from the item definitions.
This enhancement will be most useful in situations where customers copy costs across
organizations where the item is assembled in the source org (based on rollup = yes) and
purchased by the destination org (based on rollup = no).
In order for the costs not to be deleted by a cost rollup in the destination org (since no BOM
exists for it), the user needs to update the based on rollup flag back to no. This utility will
be useful for that purpose.

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Copy Costs to Other Orgs

Switch to another organization and use Copy Item Costs Across Organizations to copy
from any cost type but Frozen to another cost type, from the org with defined costs.
Parameters are:
a. Merge and update existing costs
b. Source warehouse ie GUE
c. Cost Type
d. Same cost type
e. Choose what items you want to copy
f. Sub-element summary option: Summarize Sub-Elements

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Copy the cost to Frozen cost type.

a. Responsibility Cost Management > Item Costs > Standard Cost Update > Update
Costs
b. Cost type copying from: your cost model
c. Adjustment Account
i.
GUE: 110.000.67999.102. 0000. 0000000000.00000
ii.
VR1: 110.000.67999.402. 0000. 0000000000.00000
iii.
DAR: 110.000.67999.302. 0000. 0000000000.00000
iv.
CHA: 120.000.67999.802. 0000. 0000000000.00000
d. Update option is Overhead, resource, activity, and item costs
e. NOTE: do not do while order entry is ongoing

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Open and Closed Issues for this Deliverable

Open Issues
ID
Issue
Resolution
Responsibility
Target Date
Impact Date
Resolution
Responsibility
Target Date
Impact Date
Closed Issues
ID
Issue

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