Manufacturing BOM Cost Rollup - Needs Improvement - Does Not Currently Work Accurately

[Chuck Boecking]

Hi Everyone,

The purpose of this post is to check with the group before I perform a bunch of work updating RollUpCosts.java. Here the statements that I believe to be true:

1. There is no way to perform an accurate cost rollup if you do not know a product's bom depth (lowlevel) before you start. The reason is that you must roll up your semi-finished goods before you attempt to roll up your finished goods. iDempiere does not set the product's lowlevel (Libero MFG does).
2. The current rollup does not support Organization level costing - instead it just sums costs across all orgs.

Proposed solution:

1. Implement a process to iterate across all products and set the accurate lowlevel. Note: this could be done during the RollUpCosts process. Note: this could be an before/afterSave of the M_Product_BOM table; however, that introduces performance issues with high product count systems. Note: It could also be performed during the Verify BOM structure; however, we would need to implement additional logic to clear the product's Verified flag. My vote is to include it in the RollUpCosts process.
   
2. Update the RollUpCosts.java process to order products by lowlevel desc when it creates the collection of products. This way semi-finished goods are calculated first.
3. Update the RollUpCosts.java process to pay attention to the accounting schema (in case of multiple)
4. Update the RollUpCosts.java process to respect the Accounting Schema's Costing Level (Client or Org)

Has anyone already solved this issue? Please share your thoughts, and thank your for your consideration!!

Chuck Boecking

www.chuckboecking.com

[Chuck Boecking]

Quick update: You do not technically need to know the BOM level since the current method is recursive. The down side of the current implementation is that it is inefficient. If you have a complex semi-finished good that is common in your mfg process, it and its BOM children will get cost calculated many times. Thanks Deepak for the clarification!

[Chuck Boecking]

Ignore my previous comment about being inefficient. The process stores a hashmap of previously calculated values. 

[Chuck Boecking]

I spent most of the day testing org level costing. Here is a ticket that represents what I found and my goals.

https://idempiere.atlassian.net/browse/IDEMPIERE-2769

[rishi rinku]

Dear sir

My question is about accounting effect of Production (single Production)

Let me give u example of my transaction.

i create production with following configuration. 

Product A	Finish Good	Production Qty 1
Product B	RM for A	Consume Qty   1	$100 Each
Product C	RM for A	Consume Qty   1	$150 Each

 When I create production for first time .The posting of transaction Shows

Account	Dr	Cr	Product
Rate Variance	350	0.00	Product A
Product Asset	0.00	0.00	Product A
Product Asset	0.00	100	Product B
Product Asset	0.00	150	Product C

But Accounting Effect should be

Account	Dr	Cr	Product
Product Asset	350	0.00	Product A
Product Asset	0.00	100	Product B
Product Asset	0.00	150	Product C

 Please help to solve this .

Thanks in advance.

[Sandy Corsillo]

Hey Rishi,

Looks like the problem is that you haven't rolled up the costs of the Bill of Materials before running production. The rate variance is being debited because the system thinks that the cost of the finished good is $0. 

To test, go to the finished good, Product A, and look at the cost records tab. My guess is that it will say $0. Now go to the Rollup BOM Costs window and run the process. Then go back to Product A and confirm that the cost has been updated to $350. When you run the production you will get the accounting effect you are hoping for.

Best,

Sandy

[Rishi Rinku]

hi Sandy

Thanks For reply 

    if i define 2 quantity of Product B and 1 quantity of product C in bom and then i use role up process now the cost of Finish Good Increase By350(Product B(2)*100 and 150*1 Product C).

but if change quantity of product B in production from 2 qty to 1 qty (bcoz thr might be chance that planned quantity and used quantity will might be different) and i complete production  .

Now if we see the posting its again show 

	Dr.	Cr.
Rate Variance		100
Product A	350
Product B		100
Product C		150

bcoz in adempiere accounting effect always debit with finish goods and credit with raw material regardless any changes in quantity or product.

kindly share your opinion or suggestion.