Selection of routing to calculate costs

A routing can be used in the following calculations:

  • The calculation of an item's standard cost.
  • The calculation of production order costs and production order lead time.
Routing in an item's standard cost calculation

To calculate the standard cost of an item, the routing can be used. However, you must determine which routing is linked to the item.

If the Quantity-dependent Routing checkbox in the Item - Production (tiipd0101m000) details session is cleared, LN checks the default routing that is defined in the Routing Parameters (tirou0100m000) session. If that default routing code is also linked to the item in the Item - Routings (tirou1101m000) session, the default routing is used in the item's standard cost calculation. If the default routing is not linked to the item in the Item - Routings (tirou1101m000) session, no routing is used in standard cost calculation.

If the Quantity-dependent Routing checkbox in the Item - Production (tiipd0101m000) details session is selected, more than one Order quantity dependent routings routing can be linked to an item. Because you do not know yet what is going to be the production order quantity of the item, you must make a reasonable assumption of the production order quantity to determine which routing is applicable. The order quantity is derived from the item ordering data defined in the Item - Ordering (tcibd2100m000) session:

  • If the Method field is Fixed Order Quantity, routing selection is based on the number in the Fixed Order Quantity field.
  • If the Method field has another value, routing selection is based on the number in the Economic Order Quantity field. To select a routing, LN compares the value in the Fixed Order Quantity field or the Economic Order Quantity field with the value in the Up to Quantity field in the Item - Routings (tirou1101m000) session.
Routing used in a production order

In production orders, a routing is used to calculate production order costs and to determine the production order lead time. In the Routing field in the Production Orders (tisfc0501m000) details session, the applicable routing is displayed. Dependent on the setting of the Quantity-dependent Routing checkbox in the Item - Production (tiipd0101m000) details session, the default routing, or an order quantity dependent routing is selected in the Routing field. The routing is determined as follows:

  • If the Quantity-dependent Routing checkbox in the Item - Production (tiipd0101m000) details session is not selected, LN checks the default routing that is defined in the Routing Parameters (tirou0100m000) session. If that default routing code is also linked to the item in the Item - Routings (tirou1101m000) session, the default routing is displayed in the Routing field. If the default routing is not linked to the item in the Item - Routings (tirou1101m000) session, the Routing field will be empty.
  • If the Quantity-dependent Routing check box in the Item - Production (tiipd0101m000) details session is selected, more than one (order-quantity-dependent) routing can be linked to an item in the Item - Routings (tirou1101m000) session. The number entered in the Quantity Ordered field in the Production Orders (tisfc0501m000) details session determines which of the order quantity dependent routings is displayed in the Routing field.
Note

You can manually modify the displayed routing in the Routing field.

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