Over time there have been multiple posts and questions on how multiple sites can have different (or same) costs. The purpose of this post is to describe how it works.
Company: A group of Sites…
SITE: A place with warehouses… typically I like to define a site as a group of warehouses that are close enough that there is 0 transport time between warehouses. If the warehouse is across town, and requires a truck for transport, then it might need a new site.
Site Cost ID: Each site MUST be assigned to a CostID. “Typically” by default, CostID “1” is assigned to every new site, NOTE: This “assumption” is erroneously used many times in BAQs. CostID 1 is NOT a rule, it is a default.
PartCost: There is a TABLE called PartCost… the index to the table is the Company/PartNum/CostID. Note that it does NOT have the Site (Plant) as part of the key. To find the cost for a part, you need to know the Site (Plant) and lookup the CostID from the PLANT table, and then use that (instead of assuming CostID = “1”).
OK… onto the options assuming you have three SITES X, Y, & Z:
- Sites X, Y, and Z can all share one common CostID…
- Sites X, Y, and Z can each have different CostIDs
- Sites X & Y can share one CostID, and site Z can have a different cost ID
So… what does this all mean?
- With option 1, when you move an item from site X to any other site, the cost remains the same. there is only one Cost record per part. if you change the cost, the inventory value in all three sites (and all their warehouses) adjusts as well.
- With option 2, each site is independent. you can adjust the cost in site X, without affecting the other two sites. BUT… if you transfer inventory from site X to site Y, and if their costs are different, this will cause a “Transfer Cost Variance” to be posted (the money must go somewhere).
- Option 3 is simply a combination of the above 2 options, transfers between X & Y are at the same cost, but site Z is independent.
Special Note about CostID…
- You can create a new CostID, you can calculate new costs, but never associate it to a site.
- you can copy costs from an unattached CostID to a CostID that is in use (using Costing workbench).
- you can reassign a new CostID to a site in the Site Maintenance. WHEN YOU DO THIS, you will journal entries for any costs that change for parts… This process can create 10000s of cost adjustments if the two cost tables are different.
- If you are AVERAGE COST, and you are using Option 2, then every CostID will have its own average calculation. the parts can literally cost different for every part because of the average calculation.
- I have created new CostIDs to “store” historical costs… at the end of each year, we create a new CostID and copy the costs into the new year. Then you can create your own BAQ/Dashboard to do historical tracking of costs.
- One “OldSchool” method of doing recosting involves 1. create new CostID. 2. Develop all the new costs for “next year”… create dashboards to compare current to “next year”… once ready to make this live, you go into the Site Maintenance and Switch the cost ID to the new year.
How do you all use CostIDs in a special way? Has this giving you any additional ideas?