SINGLE LEVEL AND MULTI LEVEL COSTS

[Former Member]

Hi,

Please explain me the difference between single level costa and multi level costs.where we have to use theboth costs

[Former Member · Accepted solution]

Hi,

Single Level Cost is the Cost of the product which is maintained in the Material Master.

Say Product A's Material master having price as Rs 100

Product A is made of Product B and C.

Product B's price is 75 and Prodct C's Price is 20.

Hence the material cost to produce Product A is B + C's price = 75 +20 = 95.

Which is called as Multilevel cost.

Will suggest you to check the BOM concept related to Single level and Multilevel .

As well as look more details on the costing interms of material costing, production cost and final cost of the product etc.

May I know it which functionality of APO you are using single level and multilevel costing?

[Former Member]

Hi anjali,

single level costs are relevent for snp optimisation, where as multi level costsare relevevnt for CTM and PP/DS.Do u have ny idea why specific single level costs are relevent for SNP optimisation and multi level costs are maintained at CTM and PP/DS.As I am new to this area

[srinivas_krishnamoorthy]

To the best of knowledge, CTM uses multi-level fixed and variable costs only for prioritization, which in other words is source-determination. Thus it is just relevent if it has to make choices between two potential sources. This holds good for some of the PPDS logic as well. CTM is not exactly a true optimization engine though like Optimizer. I would assume that Optimization engine would become highly complex and impractical if it takes multi-level costs into account. To simpify it takes single-level costs only and reduces the processing time without much impacting the plan quality.