Microsoft Dynamics AX offers a nice set of tools for quickly performing a “what if” analysis on the impact of price changes (labor costs, material costs, or both) on the standard cost of manufactured items with multi-level bills of materials.
A high-level summary of the process is as follows:
- Setup a Cost Version of type = Planning that has a Fallback Principle = Active costs
- This allows us to define “what-if” costs where applicable, while referring back to the current standards wherever a “what-if” cost is not entered.
- This allows us to run the what-if analysis while only having to key into the system the incremental changes
- Make the proposed changes to the labor rates and/or raw material costs at any level in the product structure/BOM, assigning the changes to the new “What-If” costing version.
- Update the price in the Cost Category form to perform what-if analysis based on labor rate changes
- Update the cost price of an item on any level of the BOM/Formula to perform what-if analysis based on material purchase price changes
- Run a Cost Calculation for the “What-If” costing version on the top-level FG item.
This article was written by Matthew Boese, Partner at Tridea Partners, a Gold Certified Microsoft Dynamics Partner.