How Is The Demand Lateness Cost In The Penalty Cost Of Cost Breakdown KPI Is Calculated?
Last updated on SEPTEMBER 09, 2016
Applies to:Oracle Advanced Supply Chain Planning - Version 12.1.3 and later
Information in this document applies to any platform.
Running an optimized ECC-resource constrained manufacturing plan in a VCP environment. Note the following test case:
A certain resource is available as 1 unit and 24 hours for all workdays (except weekends).
The plan is an optimized ECC-resource constrained manufacturing plan. We only use the demand lateness% penalty factor (plan level), it is 10.
The results and inputs are summarized in the Figure-2.
Plan start date is 04-Mar-2015.
According to the results, there are two questions:
1) The penalty cost in the cost breakdown KPI is calculated as 22230 for Mar, is it an expected behavior, can this calculation be more detailed?
According to page 10-72 in the ASCP implementation and user’s guide (Key Performance Indicators, Cost Breakdown)
Penalty cost = Demand lateness cost * (Demand satisfied date – requirement date) * demand quantity * item list price
What is the demand lateness cost in the formulation, is it the demand lateness% penalty factor which is %10? Or is it (demand lateness% penalty factor * price)?
According to this test, demand lateness cost is used as (demand lateness% penalty factor * price). And if it is like that, than the penalty cost will be :
Penalty cost = demand lateness% penalty factor * (Demand satisfied date – requirement date) * demand quantity * item list price * item list price
Is it the expected behavior? If it is the expected behavior, then cannot understand why the square of item list price is used in the KPI?
Sign In with your My Oracle Support account
Don't have a My Oracle Support account? Click to get started
My Oracle Support provides customers with access to over a
Million Knowledge Articles and hundreds of Community platforms