Planning Method E+F uses Order Overhead in the MRP calculation. Can someone explain in detail how the Order Overhead is calculated? Is it related to Cost Buckets/Elements. It seems that the Ordering Costs in Inventory Part are also will be considered for manufactured Parts.
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Planning Method E/F
+4Best answer by matt.watters
You can assign the ordering cost directly on the inventory part or use any of the elements in the Planning Hierarchy Basic Data:
- Company
- Site
- ABC-Frequency
- Asset Class
- Commodity Group
- Supplier
Ordering Cost: The ordering cost incurred in creating a shop order or a purchase order. This cost is used by planning method E (least unit cost) and F (least total cost), as well as in the calculation of the lot size. The value for ordering cost can be inherited from the planning hierarchy.
How many shop/purchase orders are created annually? On average, how long does it take to create one order? What cost is incurred for that time?
+11Hi
You can refer this:
+26
You can assign the ordering cost directly on the inventory part or use any of the elements in the Planning Hierarchy Basic Data:
- Company
- Site
- ABC-Frequency
- Asset Class
- Commodity Group
- Supplier
Ordering Cost: The ordering cost incurred in creating a shop order or a purchase order. This cost is used by planning method E (least unit cost) and F (least total cost), as well as in the calculation of the lot size. The value for ordering cost can be inherited from the planning hierarchy.
How many shop/purchase orders are created annually? On average, how long does it take to create one order? What cost is incurred for that time?
+4Hi Matt, Online Help says “Overhead Cost” = “The setup cost to start manufacturing”. But you are right, I can edit the Routing with a lot of Setup Costs, only the “Ordering Cost” from the Planning Hierarchy has influence. Thanks a lot, also for Yathartha.
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