Processing Cost

Products within the supply chain are processed with certain costs.

In the Processing Cost table, you define policies for calculating processing costs for products. Processing cost policy is set on the facility level and is applied based on the product, and operation's direction (inbound or outbound).

Column

Description

Source

Defines the source facility for which the processing cost policy is set. A source may be a single distribution center, a factory or a supplier, as well as a group of facilities defined by the user. 

Double-click the cell to choose among the available facilities (previously defined in the DCs and Factories and Suppliers tables). The list also includes groups from the Groups table, if there are any.

Product

Defines the product for which the processing cost policy is set. 

If a product is selected, the processing cost policy applies only to orders / shipments containing this product. 

If (All products) is selected, the processing cost policy applies to any product.

Double-click the cell and choose the required product from the list (it lists all products defined in the Products table).

Type

Defines the type of the processing cost calculation policy:

  • Inbound shipment processing - cost calculation policy is applied to shipments received from a supplying facility by this Source. The value is not relevant for suppliers, since a supplier's inventory is unlimited and no shipments are received.
  • Outbound shipment processing - cost calculation policy is applied to shipments sent to a receiving facility from this Source.

Units

Defines the basis unit for calculating the processing cost. The list of available units comprises the units defined in the ALX Preferences (as well as the weight and volume units defined in the Units table).

  • pcs - a product unit ordered / shipped
  • m3 - a volume unit (cubic meter) of a product ordered / shipped
  • kg - a weight unit (kilogram) of a product ordered / shipped

Cost

Defines the cost of processing the specified product measurement Unit

Currency

The type of currency that the payment is made in (The list of available currencies comprises the units defined in the ALX Preferences).

Time Period

Defines the period of time (previously defined in the Periods table) during which the defined processing cost will be considered.

Calculating the processing cost

Processing cost is calculated in the following way:

  1. Order / shipment amount is represented in terms of Units.
  2. The resulting number of Units is multiplied by the processing cost for a single unit.
Note: If the same source and product are specified in more than one table record, the cost of processing this product will comprise the sum of values defined in the Cost column cells. In the example shown on the screenshot below, the cost of processing Furniture type of products at San Angelo facility constitutes 15 USD (default currency).

Similar concepts apply to calculating processing time. Refer to the Processing Time section for details.


 

Related topics

Expanding table records