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Topic:   Assembly Build Single Item Cost

By: GuestPosted on: Sep 1 2021 at 11:34:16 PM
Hi is there a way to make the single item cost not include overkit parts, Or does it change by itself to spread the overkit cost accross the build quantity over time? everything is showing at double its real cost because the overkit is rounding up to 1 component even if at set at 1% and is then adding on the cost of that component to the single assembly cost so its not an accurate representation of the assembly cost?

By: GuestPosted on: Sep 2 2021 at 02:05:26 AM
further info, this is compound adding extra cost from sub assemblies to assemblies then again is throwing out stock value reports by miles because all this extra cost adds here as well... this is a significant bug.

To get the single item build cost accurately it first needs to calculate the line total correctly by adding the percentage of the value of the overkit item to the value of the item multiplied by the qty per number and then sum all of the Line Total values.

example correctly;
LineTotalCost[x] = ((QtyPer * CostEach) + ((Overkit / 100) * CostEach))

then add all the line totals together.

what it is doing instead now which is wrong;
LineTotalCost[x] = (QtyPer * CostEach)
if Overkit > 0 then LineTotalCost[x] += CostEach

then adding all the line totals together.

it might sound right but in the real world who is going to lose one of every item when they are building a total of one finished assembly? that's ridiculous.

By: SupportPosted on: Sep 2 2021 at 03:55:18 AM
It's worked this way for many many years so we'd be reluctant to change it now. If we did it would cause a lot of problems for people who are using it the way it is.

It's mainly for high volume manufacturing cases where a large quantity of a component are being consumed and the loss is tiny but quite consistent. When there is a loss it's a whole component that's lost. Not a fraction of a component.

There will certainly be cases where it can't be usedl. For example small quantity builds using high value materials where the cost of the overkit could, in theory, exceed the value of the consumed materials.

By: GuestPosted on: Sep 2 2021 at 05:05:59 AM
I think your forgetting that everybodys stock valuations are completely wrong if you do nothing about it. when you make a build of 100 items the cost of each item is a completely different number than the number you are multiplying to value the stock, if you have overkit set as 2% then that build would assume loss of 2 parts and the value of that is divided accross all 100 assemblies and cost applied accordingly within the job, and the cost of one of those single items was the total of [qty per costing] plus the small fraction of the 2 items, not one item lost on every single assembled unit. but when you do the stock valuation you are multiplying the cost of the assembly in the latter way (as if one item was lost on every assembly, although it was only 2 and the user has set this 2% and would expect it to be accurate at least to some degree)

You should also be able to see a cost value of a single item at any time for calculating what you want to sell it for and monitor it to see if you need to increase sale prices because of increase in component supply prices but this cant be used for that at all everything is already showing much higher cost than it should. I don't build small quantities my batches of products range in size from 50 to 1000 units and I see this as a huge flaw.

for one if trying to see what your margins are on your products is impossible without exporting the bom and doing the maths in something else like excel or creating work order, opening it up to see the bom and manually dividing the total bom cost in the bottom corner by the build qty with a calculator, you should be able to just look at the number in the assemblies list but that number is of no representation of the cost of the assembly if you are using the overkit percentages (which I think is unwise to not use)

secondly if you use the number that your stock valuation generates for insurances or statements to the tax office to show the value of your inventory (which is required here in some cases but I don't know about other countries) then you are lying to them. Knowing that this is wrong you couldn't in good conscience do this because you can get in some real trouble.

The stage you are at having been doing it this way for years there should be a bulletin release explaining the error and some way of optionally choosing how it should be calculated in future versions so its the users decision whether they want it correct as per the new way or to leave it, even if its just an ini file.

By: GuestPosted on: Sep 2 2021 at 05:08:39 AM
Not to mention if you have competitors and can't work out how they are selling something cheaper, this could be why.

By: GuestPosted on: Sep 27 2021 at 11:59:33 PM
Any update on this? what is the plan to resolve this issue?

By: SupportPosted on: Sep 29 2021 at 12:02:53 PM
It doesn't need resolving because it's not see as a bug or issue that needs resolving. In Microsoft Terminology, good or bad, it's "By Design".

In 25 years you are the only person to ever mention this as a potential problem.

However. I do understand what "Guest" means.. Maybe the single product build cost should not include the cost of OverKit items. But we have the problem that if we changed the current behaviour just for you then that would affect 25 years worth of other users who are accustomed to the current functionality.

But. After all that. I have put this in to the ToDo list so it will be looked at. If there is any was to change the current behaviour without screwing up everyone else then we'll look at it.

But I'm not going to give any lead time. Sorry.

By: MichaelAtUSRPosted on: Sep 30 2021 at 04:01:18 AM
We have components that cost fractions of a cent. Whenever we use them I can guarantee that some get lost. Having 1 or 2 percent overkit, which gets rounded up to a whole number/quantity, is correct. After all. I can't over-consume half of a component. This kind of component is what the OverKit feature was designed for.

But I have another component. A microprocessor. This costs around $15. We obviously don't loss many of those. But we do lose some. But even on a high quantity job I don't overkit them. If one gets dropped then the build gets stopped while we investigate the cause and then go to the stores and book out a replacement. Overkit was not designed for this kind of component.

I get the impression that the original poster's component is not compatible with the Overkit feature and the feature should not be used for that component.

By: HarryPosted on: Nov 7 2021 at 10:02:25 PM
Hi I am the original poster,
I believe this is being misunderstood by some.

I am not complaining about how the parts are used when you create a job and build it, this part of the program works as it should and uses the rounded up loss across the whole build job or "work order". For example if you set a part overkit to 1% and build 99 items, its impossible to lose 0.99 of the part, so this is rounding that part up to 1 item lost on the job which built 99 assemblies, respectively the cost of that assumed lost single part on this work order is just that, 1 item, meaning that the cost overall for the 99 full built assemblies on the job includes on each individual completed assembly within that work order very close to 1% of the cost of the lost item. This is the best fit you could hope for in terms of accounting for the inventory losses of items.

The issue is this costing doesn't follow through on the other costing and valuation functions in the application. Its purely a costing and valuation problem, not a problem with the inventory stock level adjustments. Instead if you look at what is shown as the cost for an assembly in the assemblies tab rather than on a work order, it is adding rounded up values of 1 extra part that has any overkit percentage set for each individual assembled item, for example if every component used in an assembly bom has something more than 0% set then that assembly will literally display as costing double under the assemblies tab, then if this item is a sub assembly used in another assembly the greater assembly which uses it, is calculated using the same doubled value for the sub assembly within it and shows even more extra cost.

There are assemblies in my inventory that we know cost $33 to build and they show as over $110 cost each, if we create a job of 100 assemblies and divide the cost of the work order by 100 the value shows correct but it is a completely different number in the assemblies tab. Something similar or closely related to this issue is happening if you run a stock valuation report so this is also inaccurate, its very very easy to use minimrp itself to see this problem in the stock valuation;

1, run a stock valuation report
2, pick an item that has some stock and uses parts with overkit percentages set and note the total cost valuation of that assembly shown in the report.
3, create a dummy work order to build the same amount of that same item that is shown in stock
4, open the work order to show the bom/parts list for that job
5, look at the total cost the work order shows on the bottom right (note that this is correct here)
6, compare that value with the cost shown from the cost valuation report.
- you will notice it is very much different.

Then imagine, if a decent sized company has been using these reports to present to there insurance provider to insure their stock in the warehouse for a span of 25 years, how much extra money have they spent on insurance premiums over the last two and a half decades. I wouldn't want to be those people.

I would urge anyone using miniMRP to be very wary of this. Just because I'm the only one that has mentioned it doesn't mean I'm the only person that sees it as a problem, it simply means I'm probably the first person that noticed it. I'm a director of a business and these things do matter to the business and to me, however the unfortunate reality is a number of people who are employees and just go home at the end of the day without work in mind would either not understand, not care or not see the importance because they aren't paying for it, some of them may even know but just leave it unmentioned because "its not their job".

So, I'm glad to see its in the to do list to be looked at. that's better than never.

By: SupportPosted on: Dec 1 2021 at 04:34:55 AM
This is still in the ToDo list but. To be honest. I'm not 100% sure how it can ever be solved to your satisfaction.

You are obviously overkitting a very expensive component. You do agree that if you build 100 assemblies then the cost of that overkitted component is spread over 100 assemblies and that gives you what you consider to be an accurate build cost per assembly.

But, worst case scenario, is that you build ONE assembly. This would overkit one of your expensive components.

People who use the Overkit for Low value components that are frequently lost or wasted during manufacturing are quite happy for the overkit cost to work the way it does.

But you would like us to divide the cost of the overkitted component by 100. Why 100? That suits you and if we did it you'd be happy. But what about other people. Why not divide by 50 or 500 or 1000 for very VERY expensive components.

The simple answer is that Overkit is for small, low (LOW) value components that are frequently wasted durong the assembly process. It's not for high value components that, surely, you're not wasting.

I understand what you mean by employees just pressing a button and going home.

Can I suggest that you DO NOT overkit that component. Just add a side note to the work order if necessary.

By: HarryPosted on: Jan 12 2022 at 10:09:14 PM
Support I still don't think you understand.

Maybe I need to screen capture and circle and draw pictures for you?

This is completely unrelated to work orders and inventory usage.
it is entirely related to how mini mrp indicates an estimated build cost of an assembly specifically in the assemblies tab and the valuation report.

my original question was just asking if there was a way to make the overkitted items not be included in these two values because they are making the valuation allot higher than they should be. Support has still not answered this question?

The items that have overkit percentages in my database ARE all low value items, because if it is high value it is worth stopping and picking up the dropped item exactly as Michael above has said. but he has misunderstood here, he is talking about work orders and inventory usages and physical losses of parts, which is NOT what I am asking about at all.

The valuations just still don't work because usually about 80% of the items on an assembly are all low value and it still adds up to being too far wrong because this means that 80% of the items on the assembly are counted an extra time on the cost shown in the ASSEMBLIES TAB BUILD COST COLUMN and STOCK VALUATION REPORT, NOT ANYWHERE ELSE. your suggestion of don't use overkit on that component is not just a few items its every component, that's not a solution because then all items no matter the value that get lost frequently are no longer counted in inventory anymore at all which increases workload and production delays, workers have to constantly recount things manually to adjust the stock to keep track of lost items and if something is missed you end up waiting 2 weeks to finish a work order over a $13 reel of resistors.

The second comment I made was when I worked out where the maths was wrong in minimrp and have made a suggestion of how to correct it. I don't care whether you follow this suggestion or just give me a way to make the cost calculations in these two places ignore the overkit as per my first comment. I just want something to make it close enough.

The (100) mentioned in that maths is because overkits are percentages. A whole unit of one item is 100%.
the number stored to represent the overkit percentage in minimrp is a decimal integer (whole number). This needs to be converted to a decimal fraction and that then needs to be multiplied by the cost of one of the item to get the cost of the percentage of that item. This is where the maths is not correct in mini mrp, for the assemblies tab and the cost valuation report you are getting a base value of one assembly so that you can multiply that by the amount of those assemblies in stock and in your maths for this base value which is what is showing in the assemblies build cost column doesn't get the fraction and work out the percentage cost, instead you are treating that base value as if its a work order to build one of something and rounding the overkit percentage up to 1 whole and adding 100% of the cost of that item to the base assembly cost which both shows the estimated build cost of an assembly wrong in the assemblies tab build cost column and then when that value is multiplied by the amount of assemblies in stock you have a value which is calculated assuming that for every "single assembly" all of the components that had a percentage overkit set no mater what that percentage setting is, had one of them lost per every assembly that you have in stock.

Fractions and percentages are almost pre-school maths so I don't know how you have been thrown off by the mention of "100" you wouldn't use anything else if you are dividing to work out the decimal fraction that represents a percentage, there is two methods to convert that whole digit which represents a percentage in mini mrp to a fraction, either divide it by 100 or multiply it by 0.01 , both have the same result. 0.01 is 1% of 1. If something costs $2 and you need to work out what 2 percent of that is multiply its either,
x = ((2/100)*2) which is ((p/100)*d) where p = percentage and d = dollar
or, x = ((2*0.01)*2) which is ((p*0.01)*d) where p = percentage and d = dollar

Thanks

Harry

By: SupportPosted on: Jan 13 2022 at 03:11:38 AM
It would be quite easy for us to hide the cost of Overkitting when we show the build cost of assemblies. For example when viewing the 'All Assemblies' list the build cost column would only show the cost of actual necessary components and not include the cost of overkitting.

But our problem is that over 25 years the users of MiniMRP are accustomed to seeing their total build cost (for a single assembly) inclusive of the overkitting components.

The purpose of the overkit is to include the cost of disposable items. Things that are always wasted during the manufacturing process. For example high speed pick and place machines often throw (loss) tiny components that are simply too cheap to bother picking up off the floor. This is the purpose of the overkitting.

People who use overkitting for that purpose will ALWAYS overkit and lost/unused components are ALWAYS disgarded.

In one of your example you were saying that we could divide the cost of overkitted components by 100 to, kind of, spread the cost over a larger quantity of assemblies. I understand that. But why 100? Why not 1000. Or 10?

By: SupportPosted on: Jan 13 2022 at 03:25:26 AM
Just to clarify. we're not "thrown off" by the mention of *100*.

But that sounds like you'd be happy for us to include 1% of the cost of overkitted components in the build cost when viewing the 'All assemblies' list.

But, as I've tried to say. *100* would suit you because your overkitted component is obviously quite expensive and it totally screw your build cost when viewing the All Assemblies list. Dividing the cost of overkitted components /100 would suit "you".

But what about everyone else who has overkit components that only cost one penny. They ALWAYS want to see those pennies included in the build cost of even one assembly.

But the main problem is that it's worked the way it has for over 25 years and changing it for everyone else is simply not possible.

The only way we could consider this is by adding some setup option allowing you to configure it. It it's not as simply as dividing some cost by 100. It requires a whole setup form with a plethora of options to suit other people as well as you.

By: HarryPosted on: Jan 19 2022 at 03:59:52 AM
I'm not aiming for this to be difficult for you. Could you not just add a checkbox in the existing setup form - supplier tab in the "Item Detail Price/Cost" group and name it "Use Overkit in All Assemblies Build Cost and inventory valuation" right underneath the other radio option related to inventory valuation and assembly costs.

If you really want to go the extra mile you could make that checkbox enable a combo box under it labelled "Math Method" with "Rounded Whole|Fractional Multiplication" as the options and this when set to fractional multiplication can enable an input box under it that is labelled "Fraction" and in that input box I could put 0.01 in it and someone else can enter whatever they want and you use the "x = ((p*f)*d) where p = percentage and d = dollar and f = the number in this fraction input". This way you can get all the options with 3 controls and three labels. Unchecking the checkbox can just ignore the overkit in these two cost indications all together, checked with the combo on "Rounded Whole" whould be your default setting and run the same maths you have for the last 25 years keeping those existing people happy and the checkbox checked with the fractional multiplication set in the combo and the variable number input keeps everyone else happy for years to come. How to use it can just be added to your help documents/online user guide. And your backend code would just need a few switch cases to swap between the methods.

Unless there is some other ideas you are getting from other users closely related(which considering your own statements above doesn't sound like there is) this doesn't seem like so much of a plethora to me at all. Does this satisfy the options you can think of? if not what are the other options you can think of? I'm quite happy to help come up with how to put all the options in with minimal work and impact on existing databases/users.

By: supportPosted on: Jan 19 2022 at 04:32:56 AM
The only 'workable' option is that we add a checkbox somewhere in setup where the cost of overkit can be excluded from the build cost column when viewing the "All Assemblies" grid. That checkbox could be pre-set to the current default behaviour and you could change it if required.

I don't think the 'Math Method' you suggested could ever work because it assume you want to use that same math method for ALL components. But it's likely that some people have some very low cost components where they want to include all of the cost as well as some expensive components where they'd rather have a fraction. The math method setup would need to be in the detail setup for every component.

And you're right. Apart from this thread nobody has ever contacted us about it before so it can't be a high priority for us to do. So although the above mentioned checkbox is now in the ToDo list I can not give any indication of when it can be implemented.

By: SupportPosted on: Jan 19 2022 at 04:36:41 AM
Harry. Just out of interest. Can I ask. What is this component that is so expensive? I've already mentioned on a few occasions that our current overkit function is primarily aimed at components with a negligible cost. Things that are nearly always lost during the assembly process. For example tiny electronic chips costing a 1000th of a penny that are often thrown by pick and place machines. These parts are so low value that it's not worth picking them up. They're simply scrapped.

What is your component?


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