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Pass On Lot Size

Definition

If this indicator is selected, the system determines the costing lot size using the lot size of the highest material in the BOM and the input quantities of the components.

Use

1) Do not pass on lot size

If this indicator is not selected, the materials further down in the structure are costed in accordance with the lot size in the costing view of the material master record. When the materials in the next-highest costing level are costed, the costing results of the semifinished materials are converted to the lot size of the finished material to calculate the material costs for the finished product.

2) Pass on lot size only with individual requirement

In the MRP view of the material master record, you can specify that a material is planned as an individual requirement. If such a material is added to another material, costing uses the lot size of the highest material.

3) Always pass on lot size

Here, the costs for all the materials in a multi-level BOM are calculated using the costing lot size of the highest material. This function is used principally in sales order costing.

If you are costing sales orders using product costing for a material with a multilevel BOM that is produced in-house, choose 2) or 3) . For those individual requirements materials, from a business management point of view it is recommended that the order lot size be used when costing the material components going into the finished product. On the other hand, materials subject to collective requirements are generally costed using the costing lot size in the material master record.

If you want to pass on the order lot size to only the semifinished products controlled by individual requirements, enter By individual requirement only. The costing procedure is as follows:

• The costs for materials from collective requirements are calculated using the costing lot sizes in the costing views of the corresponding material master records, and are converted when used in the higher-level material.

• The costs for materials from individual requirements are calculated using a lot size determined dynamically for every production level, based on the order quantity entered in the sales order item.

If you want to pass on the order lot size to all the semifinished products, enter Always pass on lot size . The costing procedure is as follows:

The costing lot size is determined dynamically based on the order quantity. This involves the following steps:

• Calculation of the costs of the finished product based on the order quantity

• Calculation of the costs of the materials in the next-lowest low-level code, based on the consumption quantities in the BOM items for the finished product, converted to the order quantity of the finshed product

• Calculation of the costs of the materials in the next-lowest low-level code, based on the consumption quantities in the BOM items for the semifinished products, using the quantities calculated for the higher-level low-level code

Dependencies

In Product Cost by Sales Order, the setting of this indicator should agree with the value of the indicator Transfer only with collective requirements material in the transfer strategy.

• If you pass on the costing lot size for individual requirements materials only (entry 1 ), you should set the indicator Transfer only with collective requirements material in the transfer strategy.

• If you always pass on the costing lot size (entry 2), you should not define a transfer strategy for the sales order cost estimate, so that the correct fixed costs portion is shown.

If the costing variant is used in a costing run, this indicator should be blank.