Scrap % in Item Card and Production BOM Lines

Scrap % indicates the % of scrap expected during production. You can enter Scrap % in Item Card and Production BOM Lines. The Scrap % in Item Card is different from the Scrap % in Production BOM Line.

Take this example, in order to produce 1 unit of Item A, you need 5 units of Item X.
If you set:
Scrap % in Item Card = 5
Scrap % in Production BOM line = 5

What does this means ? How will it affect your production planning. Let's say, you want to produce 100 units of Item A. 5% Scrap in Item Card means that, in order to produce 100 units of Item A, you need to produce 105 units because 5 units will be scrapped. In order to produce 105 units of Item A, you need 105 x 5 = 525 units of Item X. Because of 5% scrap in BOM, you need to add another 5% (26.25) of Item X in order to produce 105 units of Item A. Therefore, in order to produce 100 units of Item A, you need 525 + 26.5 = 551.25 units of Item X.

In order words, the Scrap% field on a BOM line represents components to be scrapped during production, while the Scrap% field on an item card represents output to be scrapped output (before putting on inventory).

* My company do not use Scrap % in both Item Card and Production BOM

Setup Item Card for Requisition Management

Planning and Replenishment tabs in Item Card contains setup information that will affect the result in Requisition Worksheet. Open Item Card and then go to Planning tab.

Important fields to take note in the planning tab are:

Reordering Policy
Navision uses reordering policy field to calculate replenishment order quantity.
Fixed Reorder Quantity tell Navision to always take value in the Reorder Quantity field as proposed replenishment quantity. If Maximum Quantity is selected, Navision will calculate the proposed quantity that need to be purchased so that the replenishment will make the inventory level back to the maximum level. If Order is selected, Navision will propose one replenishment based on the requirement in sales order. If you do not select any reordering policy, Navision will not propose any replenishment for the item.


Reorder Cycle
This field accept a date formula that set the planning time frame. Reorder Cycle will be disabled if the Reordering Policy is set to Order. It is also not recommended to use Reorder Cycle together with Maximum Qty. reordering policy.

Reorder Point
Reorder point is the point where you must replenish the item if the quantity of stock fall below the reorder point. If the projected available balance fall below reorder point but still above the safety stock quantity, Navision will create a purchase order proposal that is forward scheduled until the day that cause projected available balance to fall below reorder point.

Safety Stock Quantity
Safety Stock Quantity is the quantity of stock that you want to keep in your inventory to prevent the situation of running out of stock. Inventory level will reach Reorder Point before reaching Safety Stock Quantity so that the items can be replenished before it fall below Safety Stock Quantity. If the projected inventory level already fall below the safety stock quantity, Navision will propose to at least replenish up to the Safety Stock Quantity.

Reorder Quantity
Value in Reorder Quantity field will be used in all replenishement proposal for the item selected. Whenever the item need to be replenished, the item will be replenished with the quantity specified int the Reorder Quantity field.

Safety Lead Time
Safety Lead Time is the safety time buffer to protect against delay in replenishment. Safety Lead Time will push the Expected Receipt Date in Purchase Line to a date later than the Planned Receipt Date.
Expected Receipt Date = Planned Receipt Date + Inbound Warehouse Handling + Safety Lead Time.

Maximum Inventory
Maximum Inventory is the maximum quantity you want to keep in your inventory. Navision will use this field to calcualte the quantity to be replenished if you choose Maximum Quantity in Reordering Policy.

Minimum Order Quantity
Minimum Order Quanitty is the minimum quantity to be purchased at purchase order. You cannot set a quantity in purchase order line that is smaller than the Minimum Order Quantity.

Maximum Order Quantity
Maximum Order Quanitty is the maximum quantity to be purchased at purchase order. You cannot set a quantity in purchase order line that is greater than the Maximum Order Quantity.

Item Category Code in Item Card

Item Category Code will define the default value for the following 4 fields:

1. General Product Posting Group
2. Inventory Posting Group
3. SST Product Posting Group
4. Costing Method
   

Last Direct Cost field in Item Card

Last Direct Cost field in Item Card is updated when a purchase is invoiced. In other words, it is the last purchase price. Navision will copy the Direct Unit Cost field in Purchase Line or Unit Amount field in Item Journal Line to Last Direct Cost field when posted as invoiced. Please note that Last Direct Cost is only update when post invoice. Post receive only will not update the Last Direct Cost field.

Unit Cost field in Item Card

Unit Cost field contains the cost per unit of item. This cost will be used to initialize cost in Sales Order and Sales Journal.

How Navision update the Unit Cost field is depends on what costing method used for the item.
1) Standard Costing - Unit Cost will be copied from Standard Cost field. Unit Cost will be updated when you change the value of Standard Cost. If you change the value in the Unit Cost field, the Standard Cost field will be updated as well.
2) Other Costing methods - Use the following formula:

Unit Cost = Inventory Value of Item on hand (cost expected + cost invoiced) / Quantity on hand

If you are not using Standard Costing, Navision will only update the Unit Cost field when you run Adjust Cost-Item Entries.

Besides updating the Unit Cost based on the above formula, Navision will also update the Unit Cost with the value in Last Direct Cost field in Item card when post purchase order as invoiced if one of the following conditions is met:

1. Net invoiced quantity changes from negative to zero or positive.
2. Unit Cost in Item card is zero -
   

The cost captured in the Unit Cost field is the total of both direct and indirect cost. The direct cost consist of the actual cost for the item purchased while the indirect cost may consist of the overhead cost such as insurance, handling and trasportation cost. If you can idenfity and want to maintain the indirect cost for the item seperately, you can use either one or both of the Overhead Rate field and Indirect Cost % field to capture the indirect cost. For example, the direct cost for Item A is $0.80 and the indirect cost is $0.20. You need to enter $1.00 in the Unit Cost field and $0.20 in the Overhead Rate field. Please note that the Unit Cost is $1.00 ($0.80 + $0.20). Navision will be able to calculate the direct cost for you automatically while doing posting based on the information in the Overhead Rate and Indirect Cost % fields.

Average Cost (LCY) field in Item Card

The Average Cost (LCY) field in Item card is updated by Navision when you

1) Post Invoice
2) Inventory Increase
3) Inventory Decrease
4) Adjust Cost - Item Entries

The formula used to calculate the Average Cost (LCY) is as follow:

Average Cost (LCY) = (Cost Amount (Actual) + Cost Amount (Expected)) / Total Item Ledger Entry Quantity

Auto Populate VAT Prod. Posting Group from Gen. Prod. Posting Group

If you have already set the default VAT Posting Group at the Gen. Product Posting Group Setup, the VAT Posting Group in Item Card will be automatically populated when you select the Gen. Prod. Posting Group.

Update Unit Price in Item Card

When you update the Unit Price field in the Item Card, the Profit% field will be updated automatically based on the Price/Profit Calculation field. The code to update the Profit% field can be found in the Unit Price OnValidate trigger. Besides the Profit%, the Last Date Modified field is updated as well. Please note that, Navision only issue one SQL statement to update the 3 fields at once. If you have captured this changes in Change Log, you can see that the change Time are the same for the three fields.

The SQL statement generated from my test data is as follow.

UPDATE "CRONUS Malaysia Sdn_ Bhd_$Item" WITH (REPEATABLEREAD) SET "Unit Price"=2.7,"Profit %"=48.14815,"Last Date Modified"={ts '2007-06-30 00:00:00.000'} WHERE ("No_"='70105') AND ("timestamp"<=0x000000000001A698)

Default Costing Method

Default Costing Method for an Item is determined by the Item Category Code. In the Item card, click on the Item Category Code to open the Item Categories selection window. You can set the default costing method for the Item Category in the Def. Costing Method field.

Update Base Unit of Measure in Item Card

When you update Based Unit of Measure in Item Card, the following 2 fields will be updated automatically:

1. Sales Unit of Measure
2. Purch. Unit of Measure
   

Create Item

When you press F3 and then ENTER, a new record will be created in Item table. The fields updated while creating the new item are:

Field No.	Field Name	Value
1	No.	70105
15	Allow Invoice Disc.	Yes
19	Price/Profit Calculation	Profit=Price-Cost
21	Costing Method	FIFO
29	Cost is Adjusted	Yes
30	Allow Online Adjustment	Yes
97	No. Series	ITEM2
100	Reserve	Optional
5417	Flushing Method	Manual
5419	Replenishment System	Purchase
5422	Rounding Precision	1
5440	Reordering Policy
7384	Use Cross-Docking	Yes
99000773	Order Tracking Policy	None