Cost rollup analysis
Cost analysis provides visibility into formulation economics and supports pricing decisions and cost optimization initiatives.
Perform cost roll-up and analysis
Analyze formulation costs using configurable cost scenarios to support pricing decisions, cost optimization, and financial planning. The cost analysis functionality provides detailed breakdowns of material and labor costs with support for what-if scenarios and version comparisons.
Set up cost scenarios
Cost scenarios define the cost basis used for formulation analysis, enabling comparison of different costing approaches and what-if analysis scenarios.
To create cost scenarios, follow these steps:
- Select the Search icon
, enter Formulation cost scenarios, and then choose the related link.
The Formulation cost scenarios page opens. - On the action bar, select New to create a new cost scenario.
-
Configure the cost scenario parameters.
Field Description Code Enter a unique identifier for the cost scenario. This code will be used when selecting cost scenarios for analysis. Description Enter a descriptive name for the cost scenario. Item Cost Basis Select the cost basis to use for inventory items. The available options are: Unit Cost, the system uses the standard unit cost from the item master data. Last Direct Cost, the system uses the most recent direct cost for the item. Alternate Cost, you must specify an alternate cost code and basis. This fields are editable when the Aptean Pricing Matrix extension is used. For more information, see Aptean Pricing Matrix. External Cost, the system uses the external cost field on the formulation line. Catalog Item Cost Basis Select the cost basis to use for catalog items (non-inventory items). The available options are: Published cost, the system uses the published cost field from the catalog item record. Negotiated cost, the system uses the negotiated cost field from the catalog item. Alternate Cost Code When using Alternate cost as the item cost basis, specify the alternate cost code to retrieve costs from the alternate cost system. For more information, see Aptean Pricing Matrix. Alternate Cost Basis When using alternate costs, select whether to use Cost or Future cost from the alternate cost records. For more information, see Aptean Pricing Matrix. Default Scenario Select this checkbox to designate this scenario as the default for new cost analyses. Only one scenario can be marked as default. When you mark a scenario as default, the system automatically removes the default flag from other scenarios.
Analyze formulation costs
The cost breakdown functionality provides detailed analysis of formulation costs, showing material costs, labor costs, and cost percentages for each component.
To analyze formulation costs, follow these steps:
- Select the Search icon , enter Formulations, and then choose the related link.
- Select the required Formulation No. field value to open the formulation.
- On the action bar, select Cost breakdown.
The Cost breakdown page opens. - In the Cost scenario code field, select the cost scenario to use for the analysis. If left blank, the system uses the default cost scenario.
The system displays detailed cost information for each formulation line:
| Field | Description |
|---|---|
| Line Type | Displays the type of formulation line (Item, Catalog Item, Formulation, Phase/Operation, Production BOM). |
| No. | Displays the item number, catalog item number, formulation number, phase/operation code, or production BOM number. |
| Description | Displays the description of the component or operation. |
| Formulation Quantity | Displays the net quantity as specified in the formulation recipe. |
| Adjusted Quantity | Displays the gross quantity including loss percentages and yield factors. This represents the actual quantity required for production. |
| Unit of Measure Code | Displays the unit of measure for the component or operation. |
| Unit Cost | Displays the cost per unit based on the selected cost scenario. For items, this reflects the cost basis specified in the cost scenario. For phase operations, this shows the unit cost from the phase/operation detail record. |
| Extended Cost | Displays the total cost calculated as unit cost × adjusted quantity in the item’s base unit of measure. This represents the total cost contribution of each component. |
| Cost % | Displays the percentage contribution of each component to the total formulation cost. |
Cost calculation methods by line type
The system calculates extended costs differently based on the formulation line type:
- Item: The system retrieves the unit cost based on the cost scenario's item cost basis. It converts quantities to base units of measure to calculate the extended cost.
- Catalog Item: For catalog items linked to inventory items, the system uses the item cost. For catalog items without item linkage, the system uses the catalog item cost basis (Published Cost or Negotiated Cost) specified in the cost scenario.
- Formulation: When a formulation references another formulation, the system recursively calculates the cost of the sub-formulation using the same cost scenario. The unit cost represents the total unit cost of the sub-formulation, and the total cost equals this unit cost multiplied by the required quantity.
- Phase/Operation: The total cost equals Run Time × Unit Cost from the associated work center or machine center. These costs represent labor and overhead expenses for processing operations.
- Production BOM Lines: The system calculates costs using the standard cost calculation engine for production BOMs.
Total cost calculations
The cost breakdown page displays summary totals that provide overall formulation cost information:
Total batch cost: This field displays the total cost for the entire formulation batch. The system calculates this value by summing all extended costs from individual formulation lines.
Total Unit cost: This field shows the cost per unit of formulation output. The system calculates this value using the formula: Total Unit Cost = Total Batch Cost ÷ Adjusted Output Quantity.
The yield percentage affects the unit cost calculation by reducing the effective output quantity. For example, if the output quantity is 1000 units and the yield percentage is 95%, the adjusted output quantity becomes 950 units, resulting in a higher unit cost.
To compare formulation versions, follow these steps:
- Create multiple versions of a formulation with different ingredient compositions or quantities.
- Open the Cost breakdown page for each version using the same cost scenario.
- Compare the Total unit cost and Cost % field values to identify cost differences between versions.
- Use the Extended cost column to identify which ingredients contribute most to cost differences between versions.
Users can export cost breakdown data to Excel for further analysis and reporting.