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Product Costing

Make to Stock
Prepared by: Abhijit Joshi. June 2011

Agenda

Product Costing Make to stock / Make to Order


o Purpose & Benefits o Characteristics

Key process flows

Characteristics

Characteristics
Make to Stock
In make-to-stock production scenario stock is produced independently of orders because you want to provide your customers immediately with goods from that stock later on. You might even want to produce goods without having sales orders, if you expect that there might be customer demand in the future. This means that make-to-stock strategies can support a very close customervendor relationship because your objective here is to provide your customers with goods from your stock as quickly as possible.

2011 Computer Sciences Corporation

4/7/2012

Identification Number Goes Here

Characteristics
Make to Order Make-to-order production is a process in which a product is individually manufactured for a particular customer. Stock keeping is not usually carried out for products that are made to order. The primary benefits of this process are the ability to track the progress for the sales order and the flexibility to offer to the customer the products to meet their specific requirements. The benefit also lies in tracking the costs incurred in the servicing of the sales order in the manufacturing of the goods and the ability of arrive at a profitability of the sales order. This Business Scenario Map shows how enterprises work together to complete a make to order scenario. The planning and manufacturing process is initiated after receiving the sales orders from the customer.. There is a constant link between the sales order and the production order. This leads to the tracking of the progress on the customer order. The material stock is seen as customer stock.

2011 Computer Sciences Corporation

4/7/2012

Identification Number Goes Here

Key process flows

Make to Stock Cycle


The Make to stock scenario will start from Demand Management here we can create Planed independent requirements manually or by using data from SOP. After MRP run system will create planned orders which we can convert to Production order As the Stocks produced there off are not customer stock or the stock is not attached to any specific customer. Further confirmations are done and issues of material are carried out to the production order. Finally the production is put in to stock (GR). Here at any point of time a sales order might come in and delivery to the customer is done from the existing stock.

2011 Computer Sciences Corporation

4/7/2012

Identification Number Goes Here

The Cycle of Made to stock: Steps: MTS Scenario


1. Material Creation (Made To Stock Material with major changes of: Item Category: NORM ) 2. Creation of BOM 3. Route Creation 4. Demand requirements 5. MRP Run 6. Creation/conversion of Production order (Made To stock), Scheduling, Costing, Release and Save 7. Production order Quantity confirmations for operations, Parallel task of material Issue to order or to reservations (261) 8. Fully Produced Production Quantities will be put into stock (GR) 9. Sales order Creation 10. Delivery against sales order 11. Invoicing.

2011 Computer Sciences Corporation

4/7/2012

Identification Number Goes Here

Thank You

2011 Computer Sciences Corporation

4/7/2012

Identification Number Goes Here

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