Some subcontract service providers charge a fixed price regardless of job quantity. It is imperative that the DBA subcontract routing costs are stated as a per unit charge for the finished good parent item. For the BOM, you have to calculate the per unit subcontract Supp Price based on the flat fee charge divided by the run size. If the actual Job size differs from the run size, you will need to make a manual adjustment in the job routing to reflect the cost for that specific job qty.
Sample Scenario - Flat fee charge for subcontract services regardless of the quantity
A subcontract supplier charges the same flat fee rate of $100 for a job qty of any size. For this example, the typical run size is 100 in the BOM. And when the job gets generated it is for a Qty of 50.
Steps to handle a flat fee charge
- BOM: Supp Price = Total Flat Fee/Run Size
- At the BOM level, you will set the Supp Price (Estimated Cost) equal to the Flat Fee Charge divided by the Run Size. In our example, the Supp Price (Estimated Cost) will be $100/100 = $1.00
- MRP Settings: Create an MRP Review Note against the Parent Item ID
- The actual Job will need to manually modified if the Job Qty differs from the BOM run size. To help you remember to perform this review and edit of the job after it is created, we recommend that you go to the MRP settings screen for the parent item ID and set up an MRP review note that reminds you that if the job qty differs from the run size (100) make sure to edit the subcon routing cost immediately after job creation.
- Job (prior to Release): Supp Price = Total Flat Fee/Job Qty
- After the job has been generated, go to the Job Subcontract Routing and you will divide the total flat fee cost by the Job Qty. In our case, this would the $100 flat fee divided by 50 = $2.00. The Supp Price (Est Cost) for the Job will be set to $2.00
- Modify the Job Routing cost prior to releasing the Job and proceeding to Jobs > Job Subcontracting to generate and send out your Subcon POs.
Sample MRP Review Note