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Product costing for seasonal materials

Former Member
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Hi All,

I'm after some advice, my company manufactures fruit juice in Australia which is seasonal in different parts of the country.

I.e. in Quarter 1 we manufacture it at plant A but in Quarter 2 we manufacture in plant B.

We use the procurement type (MRP2 view) and special procurement keys (costing 2 tab of the material master) to control product costing in SAP.

For a material in plant A which is costed as a manufactured part in quarter 1 but a purchased part in quarter 2, our users temporarily change the procurement type on the MRP2 tab of the material from F to E. This gives a correct cost estimate but can cause issues in production / planning etc if activity is happening on the material at the time.

any advice on streamlining this process would be great!

thanks

Phil.

Accepted Solutions (1)

Accepted Solutions (1)

ajaycwa1981
Active Contributor
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Hi

I believe what you are doing is right...

Lets assume from Jan 1 to Mar 31, you mfr in Plant A.

- So (In Plant A) Proc Type will be E at this time and Spl Proc of Costing2 can be blank

- In Plant B, Proc Type will be F and Spl Proc in MRP2 will be ref to Plant A

With this,

- your std cost in Plant A will be based on BOM

- Your std cost in Plant B will be fetched from A and also the MRP in plant B will transfer the demand to A

Now from Apr 1 to Jun 30, you mfr in Plant B

- So (In Plant A) Proc Type will be changed from E to F at this time and Spl Proc of MRP2 refers to Plant B. If any open prod orders are there in Plant A at this juncture, it should not be an issue.

*****Only issue will be that you will have to recalculate std cost in Plant A based on Plant B. Hence, the basis for variance calculation in plant A will be changed for open production orders. I believe, this cannot be avoided*****

- In Plant B, Proc Type will be changed from F to E and Spl Proc in MRP2 will be blank. Now you can start mfg in Plant B. but when you changeover in the next quarter, you will again face the issue of change in std cost as mentioned above

I will give more thought to your scenario, and give inputs if I have any

regards

Ajay M

ajaycwa1981
Active Contributor
0 Kudos

Hi,

If the stock transfer is not applicable to you and you simply purchase from outside during off season, in that case you can think of Split valuation.

So, it will have 2 accounting views i.e. one for manufactured juice and one for bought-out juice. The manufactured one to have Price Control S and the other one to have V

Proc type in MRP view can be X in this case and you will have a choice after MRP run to convert the planned order into Prod order or Purchase order...

GR from Prod will be against the accounting view having S as price control and GR from Purch order will be against V

Regards

Ajay M

Former Member
0 Kudos

Hi Anjay,

thanks for your response. Your first answer is the scenario we have here. Our issue is not so much about the material valuation.

Our users are creating budget cost estimates right now for Q1,2,3 and 4 next fiscal year (our FY runs from October - September). But in order to create a correct cost estimate, e.g. for quarter 2, they may need to temporarily change the procurement type in MRP2 on the material master.

When they do this, even for a short time, it can affect production and planning activity.

Any suggestions are very welcome!

thanks

Phil.

Former Member
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Hi Phil,

I you need this "seasonal" change to impact only costing why don't you chage only special procurement type for costing only (in one of the costing views) and leave MRP2 procurement type unchanged?

Cheers,

Szymon

Former Member
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Hi Szymon,

When you are creating a cost estimate, the Procurement type determines whether SAP searches for a BOM or uses the valuation variant in the costing variant to value the material.

in our case, we need to say in Q1, value the material based on the BOM, in Q2 value the material based on the special procurement key. We could not use X as the procurement type since it looks first for a BOM, then for a standard valuation and our material would have a BOM (for when we manufacture), therefore when we want to value based on the valuation variant using the special procurement key, it wouldnt work.

Regards

Phil

Former Member
0 Kudos

Hi Philip

can you have 2 separated material number (same material with same val class), one is for BOM and the other using material special procurement valuation?

Regards

Former Member
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Having tested this further, SAP costs a material based on the information in the costing tabs, so if a material has procurement type E and a special procurement key for costing has been maintained which has procurement type F, SAP will cost as if the material is purchased in and vice verse.

Our costing users will maintain only the costing data and not touch the MRP data.

thanks

Phil.

Answers (0)