allocation & simulation

[Former Member]

Hello Friends,

Could you provide any good documentation that helps to clearly explain the process & concept of CostCenter allocation , simulation?

Would really appreciate your help.

regards

Markus

[Former Member · Accepted solution]

Hello Markus,

Allocation is the process of assessing or distributing amounts and quantities from one sender object to one or more receiver objects - for example, from one cost center to multiple cost centers.

With reference to product cost controlling simulation is a process that assigns to a cost object the actual costs incurred to date for that cost object.

It will be better if you could give some more insights or touchpoints for your queries so that I can help you out in more specific way.

please ward points if found helpful.

Rgds

manish

[Former Member · Accepted solution]

Dear Manish,

thanks. I awarded some points.

yes, I'll give you more info about my question.

I heard that allocation is a system resource intensive process. Why is it so since its just assigning values to different receivers from 1 sender object?

I am new to R/3 and erp in general.

I am trying to understand what this allocation is about.

Partly my doubts originate from terms used in R/3 like assessment. What is there to assess? In the english sense of the word? Assess what? Is it not just splitting a value into different pockets?

And simulation, what is there to simulate? how is it meant by simulation?

You see, i have my doubts.

cheers!

[Former Member · Accepted solution]

Hi Friends,

Could our cost center expert please let me know what is your understanding of allocation and simulation in cost center accounting module in R/3 and are either or both of these 2 processes system resource intensive and requiring long run times?

I would definitely award full points.

best regards

Markus

[Former Member · Accepted solution]

Hello

Simulation: In normal document entry scenarios, before we either park or save, there is simulation button. If we press this, the document is displayed in its totality, without any document number. This enables us to check and ascertain if every thing is ok and if ok, we could either save or park.

However, simulation scenarios can also be created during billing process.

Simulation can be used to check the result of an actual billing and invoicing to be carried out later, without deleting billing orders or creating invoicing orders. Both simulation types therefore enable you to execute billing without making any accounting changes.

In billing this simulation activities require some configuration, where as in FI it requires none.

Reg

[Former Member · Accepted solution]

Hello Markus,

Nice to see a detailed question. Taking it forward, please find below my answer.

Following is the depiction of process for a typical cost flow in Controllin g module.

Business Transactions->expenses in FI->Orders->(These are settled to cost centres)->Cost centres(Costs are allocated to product cost centres)

Now allocation refers to transferring common costs incurred within a cost element to other cost centers which have been directly assigned to a responsibility center

There are two methods are available for allocation:Distribution & Assessment.

Distribution-It allocates the primary costs collected in a cost center to other CO objects like cost center, Internal Order etc within the SAME cost element. This is done through creation of a Distribution Cycle.

Assessment - It is method of internal cost allocation where costs are transferred from a sender cost center to receiver CO objects (such as orders and other cost centers) under an ASSESSMENT COST ELEMENT. The Assessment Cost Element is created as a Secondary Cost Element.

The difference between assessment and distribution can be summarised as following.

In distribution, the cost element remains the same. Only the cost object changes.In assessment, the cost element changes.

In distribution, only allocate primary costs are distributed.

In assessment, primary as well as secondary costs are distributed.

Talking a bit more about simulation with refernce to projects I can say that when you are planning complex projects, for instance in engineering-to-order, it is often necessary to simulate and save changes to a project, without affecting the operative project. To do so, you use simulation versions that can be changed, costed and scheduled.

Hope I had made more clear this time. Please reward suitably.

Rgds

manish

[Former Member · Accepted solution]

Hi Friends,

Unfortunately, my main questions were not addressed directly.

These are:

1. What is there to Assess in an Assessment in CC.

2. Is Allocation / Simulation Resource intensive activity on the system generally.

I hope to close this message soonest.

Thanks!

Markus

null

[Former Member · Accepted solution]

1. What is there to Assess in an Assessment in CC.- it is the cost which is assessed.

2. Is Allocation / Simulation Resource intensive activity on the system generally._ yes, during period closing exercise when you go for allocation cycles, it becomes a time and resource intensive exercise.

Feel free to dig out more. award points if I had been of help.

Rgds

manish

[Former Member · Accepted solution]

Thank you Manish! Full points!