Review Standard Order Quantity
When manufacturing costs are rolled up in Routing Cost Roll-Up, the setup time is divided by the standard order quantity and each item is assigned its share of the setup cost. The run times are calculated separately for each item at each operation. However, the total run time, for all the items in the standard order quantity, is used to calculate the lead time for a standard order. Queue, wait, and move times are added to get the total lead time for the item.
The item planning record provides the order quantity value, which is used to amortize setup costs over a standard or normal order size to obtain a realistic cost per unit value.
Note: Routing and product structure rollups are initiated by the user. Some businesses have only one or the other and do not need both. However, when you do have both—the normal situation for manufacturers—always roll up the routing first, then the product structure. If the routing includes operation yields, these need to be accounted for before determining the materials required from the product structure.
