Introduction

In the should cost model it is possible to customize the model and change the model parameters to match exactly the supply chain requirements. 

Available parameters and their meaning: 

  • Purchased: Yes/no parameters defining if the material is purchased or self-manufactured.
  • Size: Defines the size of the organization producing the material 
  • Country: The country where the production takes place.
  • Sector: Defines the industry sector of the manufacturing company
  • Automation: Typically set to 0.7, defines the share between manufacturing cost and material cost. Most relevant parameter in the model definition. 

Tasks: 

Customize the “Ball pen” model in accordance to the scenario settings shown in the screenshot below and save. 

  • The should cost result results is now changing. In this example it is reduced to 5.36$ from before 6.69$.
  • Different parameters have different impact on the model. Try to vary only one parameter at a time and get familiar with the model customization. 


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