QAD 2017 Enterprise Edition
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Costing
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Cost Management
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Cost Simulation
Cost Simulation
Cost simulation functions let you set up different cost scenarios and test the impact of cost changes. Unlike the other cost rollup and update functions, cost simulation calculations look at an entirely different set of cost standards. You can set up different work center labor and burden rates, different subcontract operation costs, and different item material and overhead costs. Simulation roll-up functions use these costs rather than the standards.
Note: The Cost Simulation menu does not let you modify current or GL cost sets. It is used only for simulations. This lets you set up menu security so that many users can have access to the simulation functionality, while only a few have the ability to actually affect the GL or current cost sets.
1 Create a simulation cost set.
Use Cost Set Maintenance (30.1) to define a simulation cost set with a Cost Set Type of SIM.
2 Copy costs to the simulation set.
Use Cost Set Copy to Cost Set (30.3) to copy user-specified item cost data for each cost element into the simulation cost set. Enter a question mark (?) in Percent Change Allowed to disable the check for percentage difference between the two cost sets.
3 Copy routing and work center data.
Use Item/Routing to Simulation Copy (30.13.23) to copy work center rates for labor, burden, and subcontract cost from user‑specified routings into the simulation cost set.
This program creates direct item costs for material, labor, burden, subcontract, and overhead. Use Cost Set Maintenance to vary these costs by a positive or negative percentage.
4 Modify cost elements.
In the simulation process, you can split material or overhead into multiple elements. For example, divide purchase cost into two elements, material and shipping cost, so you can add and maintain amounts separately.
The cost of any sub-elements is added to existing direct material cost, so you first need to zero out any existing material cost.You can then use Simulation Cost Element Maintenance (30.13.1) to create the two new material elements. Enter costs for them with Simulation Item-Element Cost Maintenance (30.13.5).
5 Modify direct item costs.
Use Simul Item‑Element Cost Update (30.13.8) to change item element or sub-element costs directly by a positive or negative percentage.
Example: You identify TRANS as a sub-element of material cost. Examine the impact of a 10% increase in transportation cost by entering 10% in the Change field.
6 Modify work center rates.
Use Simul Work Center Rate Maintenance (30.13.13) to change labor, labor burden, or machine burden rates. You could, for example, evaluate the impact of a 15% increase in labor cost by multiplying the existing labor rate by 1.15 and entering that value for the labor cost element.
Note: To examine the impact of improved efficiency for an operation, create an alternate routing with different standard hours rather than changing the labor rate.
7 Modify subcontract costs.
Use Simulation Subcontract Cost Maintenance (30.13.10) to change routing subcontract costs.
8 Roll up simulation costs.
Use Simulation Cost Rollup (30.13.18) to combine sub‑elements before rolling up product structure costs.
9 Roll up simulation product structure costs.
Use Simulation Structure Cost Rollup (30.13.19) to roll up costs for the simulation cost set.
10 Review simulation cost set data.
You can perform this task several times depending on the number of changes you have made to costs and work center rates.
11 Copy work center and subcontract costs to your production database.
Use Simulation to WC/Routing Copy (30.13.22) to copy the work center and subcontract costs to the production database. Enter a question mark (?) in Percent Change Allowed to allow all changes.
The program copies the work center setup rate, labor rate, labor burden rate, machine burden rate, and labor burden percentage to user‑specified work center records. It also copies subcontract costs to specified routings. Use Work Center Report (14.7) and Routing Cost Report (14.13.14) to verify that expected changes have been made.
12 Copy simulation costs to GL cost set.
Use Cost Set Copy to Cost Set to copy the simulation data into the GL cost set. Review the data with Cost Set Report (30.21) or Item Cost Report (1.5.6; also available as enhanced .NET UI report, menu 1.5.30). The Item Cost Report shows both the current and GL cost data for items.