The should costing scenario analysis allows the variation of various parameters:
- Purchased (Are you purchasing this product or do you manufacture it yourself?)
- Size (What is the size of the business?)
- Country (Which is the country location of the business?)
- Sector (What is the industry sector of the business?)
- Automation (what is the automation level of the business?)
- Material cost share (What is the share of the material cost related to the manufacturing costs?
When the model opens the parameters are set to their basic settings as shown int eh screenshot below.
The default settings are adapted by Makersite during your implementation. However, to customize the model each single line item is separately defined. The model is updated after each parameter change.
As the should cost model works in a level structure, meaning the should cost of level 0 are calculated based the material costs of level 0 which are calculated by the purchase price (Primary data) and if not available the should cost (computed data) of all products in level 1.
Meaning that the model updates in cascades that only work upwards. A parameter change in level 1 wont change the results in level 2 of the should cost model structure.