Sales order for rejection %

[Former Member]

Hi Friends,

My client is doing jobwork. So whenever, he receives stock from customer,he will be given some 2% rejection allowance, means upto 2% rejection there will be no amount will be debited, if the rejection of our production is more than 2%, then we have to raise debit memo So can we maintain, this rejection % in sales order and please convey how it will trigger the follow on functions. Full points will be awrded.........

Edited by: sridhar kalepu on Sep 11, 2008 11:12 AM

[Former Member]

Hii,

Can you please clarify few points -

Let say customer has send 10MT quantiy of product A to make Product B of 5MT.

In that 10MT there is rejection of 1MT then in that case either you informed customer to send the materail of 1MT for filling the gap or only do the production for remaining 9MT to manufacture Produdct B.

In your case, what is mean by rejection allowances?, Why you raise the debit memo to customer in case of material rejection, any how that material is owned by customer not by company?

Regards

Goutham

[Former Member]

Hi Gowtham,

Thanks for reply. We are receiving product A from customer as raw material. This we are treating as non valuated material. We will do the turning operation for service charge of Rs.70/pc. Now If we reject the material, then it will cost the customer Rs. 2000/pc and also during the production, one or 2 pcs will always rejected.That is why, we have an agreement with customer that if the rejection rate is 2pc/100pcs of production, then there will be no penalty. if rejection, exceeds, this 2pcs, then he will penalise for this as Rs 2000/pc.

So how to maintain this allowed rejection rate in sales order, and at the time of billing after delivery, how to compare this allowance with actual rejected qty and create credit memo for this. please explain ...full points will be given...

Edited by: sridhar kalepu on Sep 12, 2008 11:17 AM