Parameters
Column | Description |
Material Cost | Calculated cost of the material based on the sum of the should cost or purchase price (if available) of the input components. Inbound logistics is accounted for at every level. |
Manufacturing Cost | Calculated cost of product manufacturing depending on defined parameters (material cost %) in the cost model. |
Total Cost | The calculated total cost of a product as the sum of the material cost, the manufacturing cost, and overhead cost. |
Should Cost | Total cost plus a margin based on the manufacturing sector (based on Product Category) applied to the model. Higher level items take Should Cost as input for their Material Cost if no Purchase Price is available. |
Should Cost Range | Based on the price bandwidth for the different materials, the bandwidth for the range is calculated. |
Purchase Price | Purchase price coming from the available transaction data. Overrides the Should Cost as input for the higher-level item's Material Cost. |
Potential Saving | Comparison between the Should Cost and the Purchase Price. This is where you can see the biggest potential for savings. |