Prerequisites
You have specified the following in the order type:
Process Flow
When you create production orders, the system automatically generates a settlement rule and a hierarchy number for each production order.
The hierarchy number specifies the sequence in which the orders are settled.
The settlement rules of the dependent orders assign the order costs to the respective higher-level order.
The settlement rule of the leading order assigns the order costs to the following receivers:
Make-to-stock production |
To the make-to-stock inventory |
Sales-order-related production with a valuated sales order stock |
To the valuated sales order stock |
Sales-order-related production with a nonvaluated sales order stock |
To the sales order item |
Engineer-to-order with a valuated project stock |
To the valuated project stock |
Engineer-to-order with a nonvaluated project stock |
To the WBS element |
In accordance with the default rule in the order type, all orders in the collective order have the settlement type FUL (full).
If you are using a nonvaluated sales order stock or a nonvaluated project stock, no valuation takes place upon final confirmation. Instead, all costs are passed to the higher-level orders when you settle.
Make-to-stock production |
To the make-to-stock inventory |
The make-to-stock inventory is valuated in accordance with the price control defined for the material. The order is credited accordingly. |
Sales-order-related production with a valuated sales order stock |
To the valuated sales order stock |
The valuated sales order stock is valuated in accordance with the price control defined for the material. The order is credited accordingly. |
Engineer-to-order with a valuated project stock |
To the valuated project stock |
The valuated project stock is valuated in accordance with the price control defined for the material. The order is credited accordingly. |
Sales-order-related production with a nonvaluated sales order stock |
To the nonvaluated sales order stock |
The production order is credited upon settlement (rather than upon delivery) The sales order item is debited upon settlement accordingly. |
Engineer-to-order with a nonvaluated project stock |
To the nonvaluated project stock |
The production order is credited upon settlement (rather than upon delivery) The WBS element is debited upon settlement accordingly. |
If you are using collective orders, you can specify whether you want to view the costs for the order you entered, for a subtree of the collective order, or for the entire collective order, or whether you first want to see an overview of the structure of the collective order and from there go to the cost reports of the individual orders.
Example
Product A is the product being manufactured. The BOM for product A contains material components B, C, and D. The BOM for product B contains material components E and F. Material components B, D, and E are to be processed with separate production orders but not delivered to stock on completion of manufacturing. You therefore enter a special procurement key in the MRP view of components B, D, and E. The special procurement key indicates that direct production is carried out using a collective order.
Create a production order for product A (order 1). The system automatically creates dependent orders for product B (order 2), product D (order 3), and product E (order 4). The system generates settlement rules that assign the costs as follows:
Levels of the Collective Order
Low-level code |
Order number/ Product |
Receiver |
Hierarchy number |
0 |
Order 1/product A |
Product A |
1 |
1 |
Order 2/product B |
Order 1 |
2 |
1 |
Order 3/product D |
Order 1 |
2 |
2 |
Order 4/product E |
Order 2 |
3 |
In this example, settlement occurs as follows:
This has the following results:
See also:
Preliminary Settlement for Co-Products, Rework