Your company manufactures forklifts with a variant configuration. The customer can configure the engine, the size of the fork, the tires, and the counterweight. The configuration of the ordered forklift is included in the planned order and finally in the production order as part of the material requirements planning. The required assemblies and individual materials for the forklift are all controlled by collective requirements. The material requirements planning for the customer order therefore only generates a planned order for the forklift. The raw materials are planned differently. You would like to be able to track the entire process from the receipt of the customer order to the invoice in Margin Analysis.
The following interactive simulations will guide you step-by-step through each stage of the process.
Steps
Complete Prerequisites and Sales Order Creation
Evaluate Incoming Sales Order in Margin Analysis
Production Planning for the Sales Order
The previously created sales order has generated a requirement for the forklift, which appears in the requirements and inventory list. Using the MRP run (Material Requirements Planning), the sales order is converted into a planned order. The variant configuration contained in the sales order item is transferred to the planned order. Finally, the planned order is converted into a production order. The production order controls the production process: it contains both the assemblies required to manufacture the forklift and the individual operations. Exact start and end dates are calculated for all operations. Finally, the production order is assigned to the sales order. This means that the forklift delivered to the warehouse is individual customer stock that can only be delivered with this specific customer order.
Production Process and Product Costing
The production order contains all parameters for controlling the production process. The first step is to review the production order's status, deadlines, sales order assignment, component overview, and process overview. Production execution includes the goods issue of required preliminary products, confirmation of the manufactured forklift (yield quantity) and actual times, and the goods receipt of the forklift.
While cost object accounting is not covered in depth in this course, the calculation of production variances and their posting to Margin Analysis are relevant from a profitability accounting perspective. This module demonstrates how to evaluate billed production variances in Margin Analysis.
Delivery and Billing of the Sales Order
The forklift has been manufactured and is ready for delivery. The delivery process generates actual costs for the Make-to-Order (MTO) scenario and creates an expected revenue in terms of event-based revenue recognition. This expected revenue is referred to as adjusted revenue.
Upon completion of billing, the adjusted revenue will be balanced. The actual revenue, actual costs, and contribution margin can then be analyzed in Margin Analysis.