Example: Quantity Determination (SAP Library - Activity-Based Costing (CO-OM-ABC))

Example: Quantity Determination

Starting Situation

With a flexible function, a specific plan quantity can be determined through the template. The example starts as follows: the material transport from inventory to production site in a new plant is a source of overhead costs, which until now have been calculated only on a percentage basis. The template enables us to assign an exact measure of overhead cost in this scenario. The process driver for this process is the number of pallet movements, which the template helps compute based on the production lot size foreseen. In this example, remember the larger production components require more pallet movements than smaller ones. Also keep in mind that a pallet movement is necessary even if only one component is required and the last pallet is empty.

The following data is assumed. The information in parentheses is for the data required by IDES.

A template for the production order (T-PROD3, Environment 001), the column Object of the first template row is filled (see: Example: Object Determination)

A material master record, to which a BOM is assigned, the master record and each component on the BOM must be maintained for the same alternative quantity unit (PAL)

Function TOTAL_OF_BOM_ITEMS sums the results of the formulas at the BOM item level and for each BOM item

Function CEIL, rounding up to the next whole figure

Function BOM_ITEM_REQUIRED_QUANTITY, needed quantity of materials of the BOM items

Function ALT_QTY_FACTOR_FROM_MATERIAL, factor for an alternative quantity unit (see: Units of Measure)of a material

Function ALTERNATIVE_QUANTITY_UNIT, the packing unit of the component; that is, the quantity unit for which you determine a conversion factor

Function MATERIAL_NUMBER, material number

Function BOM_ITEM_COMPONENTS, material number of the BOM item

Procedure

Prerequisites

Create an algorithm that calculates the number of pallet movements needed. It should reflect the following points

Lot size x Number of pieces according to the BOM item / factor of the alternative quantity unit (piece per pallet)

Rounding up to the next whole figure

The end result is the number of pallet movements necessary for a component of the BOM.

Finally, the pallet movements of all components on the BOM are totaled.

This algorithm is now entered as the quantity formula of the template.

If the alternative quantity unit has not been maintained, then do this next. This quantity unit must be the same by all components of the BOMs’. In the following example, we create it for one component only: namely, material r-4001.

If you wish to view the alternative quantity unit in IDES only, then see "Alternative Quantity Unit in the IDES".

Entry of Alternative Quantity Units

Choose Logistics ® Materials management ® Material master ® Material ® Change ® Immediately.

Enter the material number (r-4001).

Select Basic Data 1.

Choose Extras à Units of measure.

In the column titled AUn, enter the name of the alternative quantity unit ( PAL ).

In column Y enter the number of basis quantity units which the alternative quantity unit consists of.

Save your entries.

Results of this Step

The alternative quantity unit has been created. The IDES example indicates the unit PAL (pallets). Column Y indicates the basis quantity units of the alternative quantity unit, or the number of pieces per pallet.

In the next step, enter the algorithm formula for quantity into column Quantity Plan found in the template.

Enter Quantity Formula

If you wish to only view the alternative quantity unit in IDES, go to part see "Alternative quantity unit in the IDES".

Call up the template for editing.

Double click on column Plan qty.

Select the first row under Quantity.

Choose Functions.

Choose function (node BOM) TOTAL_OF_BOM_ITEMS

This function adds the necessary pallet movements of all BOM items.

In screen Definition of a flexible function, label the function appropriately (movement per BOM item).

Select Formula of the flexible function.

Choose Process.

Select the first row.

Choose Functions.

Choose function (node Mathematical functions) CEIL.

This function rounds up the result to the next whole number.

Position the cursor between the parentheses.

Choose function (node BOM) BOM_ITEM_REQUIRED_QUANTITY.

This function provides you the necessary quantity per BOM item; in the IDES example, you are provided with the number of pieces per BOM item (this entails lot size x number of pieces per BOM item).

Enter the division sign, and leave a blank space before or after it.

Choose function (node Material) ALT_QTY_FACTOR_FROM_MATERIAL.

This function prepares the factor, which the result "lot size x number of pieces of the BOM components" will be divided by.

Row ALTERNATIVE_QUANTITY_UNIT, column Value: choose Fixed value by using the F4 selection option.

Enter the alternative quantity unit ( PAL ).

This entry is necessary to arrive at the correct conversion factor.

Row MATERIAL_NUMBER, column Value: choose F4 and activate Functions/Variables.

Choose function (node BOM) BOM_ITEM_COMPONENTS.

The system finds the material number of the BOM item just processed.

Result

The quantity formula is now as follows:

CEIL (BOM_ITEM_REQUIRED_QUANTITY / ALT_QTY_FACTOR_FROM_MATERIAL (MATERIAL_NUMBER = BOM_ITEM_COMPONENTS , ALTERNATIVE_QUANTITY_UNIT = `PAL´ ).

Alternative Quantity Unit in IDES

Choose Logistics ® Materials management ® Material master ® Material ® Display ® Display current.

Enter the material number (r-4001).

Select Basic Data 1.

Choose Extras Units of measure.

In column AME you can see the alternative quantity unit (PAL), and in column Y the conversion factor.

View Quantity Formula in IDES

Call up the template for editing (T-PROD3, environment 001).

Double click on column Plan qty.

Position the cursor on $1.

Choose Goto ® Flexible function ® Change flexible function.

Select Formula of the flexible function.

Choose Process.

Here you see the entire quantity formula. Leave the function without saving.

Checking and Testing Templates

You are in either screen Create template or Change template. To check the syntax of your entries, choose Test.

Follow these steps to test the template:

Select Process Test.

Enter the test parameter in the IDES system; for example, ORDER_PLANT: 1200 and ORDER_MATERIAL_NUMBER: r-4050 .

IDES produces these results with the following entries in TOTAL_ORDER_QUANTITY:

Entries in TOTAL_ORDER_QUANTITY	Results (pallet movements)
1	7
10	8
50	14
100	22
1000	187

The results can be clarified as follows:

Seven components belong to material r-4050. The SAP system uses this calculation for the pallet movements.

Lot size (= Entry in TOTAL_ORDER_QUANTITY) * piece per material r-4050 / factor of the alternative quantity unit (piece per pallet). The result is rounded up to the next whole number. With a 100 piece order of material R-4050, the following results are obtained:

Material number	Quantity per material r-4050	Factor of the alternative quantity unit (= pieces per pallet)	Pallet movements
r-4001 .	1	200	1
r-4002 .	4	12.000	1
r-4003 .	1	60	2
r-4004 .	1	8	13
r-4005 .	1	160	1
r-4006 .	1	160	1
r-4007 .	1	40	3
Total pallet movements			22

Template Evaluation

To see more details, double click on row Quantity. You receive the following information:

Formula/Method: place holder for the name of the function.

Function list: your are notified by the system that this function works with a flexible function ($1). The parameters of the function are listed (all are type "invisible"). The l ast row shows the results of the calculation: 22 pallet movements.

Result: display total results (22).

Field content: among other information, the system shows the material number you entered.

Template Evaluation - Details

To see the individual results of the calculations, use the button Display Flexible Function and choose the function suggested. The system returns the same information as in the above table: Field content: shows the value of column "Material number", Function list: that of column "Factor of the alternative quantity unit", and Results: that of column "Pallet movements".