General Information about Pre-Calculation

Why Use This Procedure?

The Pre-Calculation is used to calculate the cost price (also known as the "prime cost" or "full cost") or the manufacturing cost of individual parts. You can create pre-calculations for a selection of parts in the Pre-Calculation Selection procedure. It is important to have a calculated and saved pre-calculation for a part in order to use some of the fundamental functions in the system, such as viewing the inventory (stock) value, the contribution margin etc. The pre-calculation made in MONITOR is a mark-up calculation. The pre-calculation is presented as different lists, where each list represents a tab in the window. The available list alternatives are:

• Level List - shows all incorporated parts at all levels.
• Operations - shows all incorporated operations.
• M-Parts - shows all incorporated manufactured parts.
• S-Parts - shows all incorporated stocked parts.
• P-Parts - shows all incorporated purchased parts.
• Warning - shows all warnings that exist for the parts.
• Summary - shows the calculation in summarized form with the different mark-ups.

When you open the procedure, first you select the part or parts for which you want to create a pre-calculation. At this point, only the Create tab has been activated. You must first create a calculation in order to activate the other tabs. The only information needed to create a pre-calculation is a part number and a quantity.

If the supplement Product Configurator is used, a window will automatically open where you configure a part when a configurable part has been selected. Read more about the MONITOR Product Configurator in the General information about the product configurator chapter.

Conditions for Calculations

The part in question must first be registered in the Preparation procedure, including all the incorporated operations and material. In order to calculate the cost of labor in a calculation, the operations in the preparation must be linked to a work center. You create work centers in the Update Work Center procedure. Each work center must be updated with its corresponding cost factors. The cost factors, which you create under the heading Work centers that you will find under the Manufacturing tab in the Global Settings module in the Settings procedure, can be divided up into different mark-ups such as direct labor, manufacturing costs etc.

You can calculate the cost of material for the different price types of purchased parts and incorporated stocked parts, such as the Supplier price, Standard price, Post-calculated mean price, etc. Price types are updated in the Inventory module in the Update Part - Inventory procedure or in the Manufacturing module in the Preparation procedure, except for the Post-calculated mean price which is updated in the Post-Calculation Selection procedure. You select the price type that you want to apply to each pre-calculation.

Settings and Mark-ups for Calculations

You will find a number of settings that determine the calculation under the heading Calculations that you will find under the Manufacturing tab in the Settings procedure. There you can enter different mark-ups that will be shown in the summary list. The available mark-ups are:

• SO Mark-up - Storage overhead mark-up. The SO mark-up is a general mark-up on the entire cost of material. For purchased parts you can also register SO Mark-up Exceptions, for example for a purchased part that is included in the calculation, but which is particularly expensive and should therefore have a lower SO mark-up. If there are SO Exceptions saved for the part in question, then that mark-up is applied as the standard SO mark-up for that part in the calculation.
• SC Mark-up - Subcontract cost mark-up. The SC mark-up can be applied to S-parts and M-parts, both as a standard value and as an exception.
• MO Mark-up - Manufacturing overhead mark-up. Included in the cost factors as a cost per hour.
• Sales Overhead mark-up - Overhead and "cost of sales" markup. The Sales Overhead is a mark-up on the entire manufacturing cost, which creates a cost price. You can determine whether or not to include the cost of material in the manufacturing cost before applying the Sales Overhead mark-up, by setting a parameter in the Settings procedure.
• Profit - An additional mark-up on the cost price, which gives you a quote price.

The pre-calculations can be made for different lot sizes. This allows you to see, for instance, how the setup cost affects the unit price for different lot sizes. By using a button, that you will find under the tabs, you can switch between showing values for the lot size or per piece. Values that are shown per piece apply to the quantity required of the incorporated parts.

If a structure contains parts that are manufactured in different lot sizes than the higher level, these parts should be configured as type S-parts in the Update Part - Inventory or Preparation procedures. In this case, the calculation can automatically calculate these parts and take their lot sizes into account when calculating a structure at the highest level.

You can configure certain conditions on each operation or material row, if you use alternate preparations in the system. These conditions will be taken into account during the pre-calculation. Read more about how terms and conditions affect this procedure under Alternate Preparations and Pre-Calculations.

Configuration in the Calculation

If you have installed the supplement Product Configurator and you load a configurable part (part linked to a configuration group) to a calculation row, the configuration window opens automatically. You can then use this window to configure the product on the calculation row. Please read more about the configuration window under the chapter Product Configurator in the Using MONITOR Procedures guide.

You can also load the configuration window manually on a configuration row by using the button under the Conf. column.

The Info Menu

Under the tabs Level list, M-parts, S-parts and P-parts you can change and show the values per piece for cost. This is made in the Info menu (by right-clicking) or by using the button Showing values for the lot size. You can also link to the Register Quote procedure by using the Info menu. By using the Info menu (when right-clicking) you can change time unit under the tabs Level list, Operations and M-parts.

Window Functions

Read more about the Window functions under Window Functions in the chapter MONITOR's Program Window in the MONITOR Basics.

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