CTM and the cost of PPM & Transportation Lane

[Former Member]

Dear Gurus:

From the on-line document, we know that CTM will take the fixed multilevel cost of PPM and the means of transport cost of the transportation lane into consideration. I already set these values but it seems no influence for the CTM run. I've checked the other settings(priority, transportation time, CTM master data) and all of them are OK. Did I miss something in the IMG or CTM profile? Why the cost function doesn't work?

Thanks for your advice,

Scott Chen

[former_member788297 · Accepted solution]

Hi

With procurement type In-House Production or External

Procurement, the system compares the procurement priority from the

transportation lane with the multi-level costs in the PPM. The source

of supply with the lower value has priority over the source of supply

with the higher value

If procurement type is X.

The calculation of PPM priority is given below:

Costs (Priority) = var. costs x quantity + fixed costs

var. costs, fixed costs -> Plan multilevel cost

quantity -> first demand quantity for each product

The lane priority is directly considered. And when the two are compared

the one with the lower priority number is taken.

Regards,

Chava

[srinivas_krishnamoorthy]

The cost functions in CTM are only used for priortization. It is not used for optimization as such.For eg it can chose between modes of transport in a given T Lane based on cost. However it cannot chose TLanes based on cost. Am not sure about the PPM part though on how cost is accounted for doing priortization.