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    Landed Cost

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    Sanjay Priyadarshi
    The document discusses landed costs, which refer to the total cost of materials including shipping, handling, and import fees. It outlines key components of landed costs and why accurately tracking them is important. It then describes how traditional Oracle purchasing only captures material costs, and how the solution extends Oracle to apply additional charges at a fictitious landed cost location to capture the true landed cost. The solution involves configuring charge types, forms, and reports to apply and reconcile additional costs with inventory and accounts payable.

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    Landed Cost

    Uploaded by

    Sanjay Priyadarshi
    175 views18 pages
    The document discusses landed costs, which refer to the total cost of materials including shipping, handling, and import fees. It outlines key components of landed costs and why accurately tracking them is important. It then describes how traditional Oracle purchasing only captures material costs, and how the solution extends Oracle to apply additional charges at a fictitious landed cost location to capture the true landed cost. The solution involves configuring charge types, forms, and reports to apply and reconcile additional costs with inventory and accounts payable.

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    The document discusses landed costs, which refer to the total cost of materials including shipping, handling, and import fees. It outlines key components of landed costs and why accurately tracking them is important. It then describes how traditional Oracle purchasing only captures material costs, and how the solution extends Oracle to apply additional charges at a fictitious landed cost location to capture the true landed cost. The solution involves configuring charge types, forms, and reports to apply and reconcile additional costs with inventory and accounts payable.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    175 views18 pages

    Landed Cost

    Uploaded by

    Sanjay Priyadarshi
    The document discusses landed costs, which refer to the total cost of materials including shipping, handling, and import fees. It outlines key components of landed costs and why accurately tracking them is important. It then describes how traditional Oracle purchasing only captures material costs, and how the solution extends Oracle to apply additional charges at a fictitious landed cost location to capture the true landed cost. The solution involves configuring charge types, forms, and reports to apply and reconcile additional costs with inventory and accounts payable.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    Landed Costs

    Sanjay Priyadarshi

    Agenda
    Definition Overview Why Landed Cost Software Solutions Oracle Purchasing (Traditional way) Extending Oracle for Landed Costing
    Solution Overview Applying additional costs Configuration Forms Customizations Supporting Multiple Currency View Landed Costs Reconcile Landed Cost

    Q & A
    1

    Definition
    Total cost of material including actual shipping, handling and import fees.

    Overview

    Total cost of material/product including other charges


    Components of landed costs

    Material Freight/Transportation

    Custom/Duties
    Handling 3PL Storage/Handling Taxes

    Inventory Carrying
    Financing

    Critical for retail industry Global sourcing requires tracking of additional costs accurately

    Get true picture of total cost of product/material

    Why Landed Cost

    Make decisions on product pricing/promotions


    Calculate product margins accurately Report/analyze various costs associate with

    shipping and handling


    Helps in design a Lean Supply Chain Competitive pressure to keep costs down

    Software Solutions

    UPS TradeAbilityTM

    Note Few solution providers also provide compliance screening and trade documents along with landed cost
    5

    Oracle Purchasing (Traditional Way)


    Unit Price on PO shows material Costs
    Inventory On-hand shows Material Cost only Additional costs like shipping, tax, import

    duties, handling etc directly paid through invoice


    Other costs treated as Business Expense

    Extending Oracle to Support Solution Overview: Landed Cost


    Oracle Purchase Order Received PO -Landed Cost Location Apply Additional Charges

    Received Material Into Inventory

    Charges Applied As Over Head

    Landed Cost = Unit Price + Over Head

    Applying Additional Cost


    On the basis on weight: Good for industries

    where handling charges are significant


    On the basis on value: Good for industries

    where duties and taxes are significant


    Combination of above two

    Solution Components
    Fictitious Location: Landed Cost
    Two Forms Customization Application of Landed Costs on Value Basis

    Supports Multiple Currency Charges and converts to

    Functional Currency
    Use of receipt routing as Standard or Inspection Define overhead elements to support Landed Cost

    eg. Customs, Freight, Tax etc


    Custom reports to reconcile Landed Costs
    9

    Configuration
    Create Location: Laded Cost
    Define charge types

    Freight

    Custom/Duties Taxes

    Handling

    10

    Define Charge Types

    Define additional charges as material overheads User inventory material account as absorption account

    11

    Receipt of the Material

    Receive Material in Location: Landed Cost

    12

    Applying Landed Cost -1


    ABC Inventory Organization

    Perform Receiving Transaction


    Next Step

    Landed cost summary form Confirm button used to commit charges Cost flag checked after costing done
    13

    Applying Landed Cost -2

    Landed cost detail form to apply charges Application support multiple currencies Conversion rate picked up from GL daily rates
    14

    View Landed Costs


    16.0000 5.0000

    Unit Cost/Landed Cost = Material + Overhead

    15

    Reconcile Landed Costs Landed Cost with Inventory Receiving


    PO Number GRN Number Consignment Number Supplier Number Supplier Name Inventory Receiving Amount Landed Cost Amount Variance

    Total

    Landed Cost with Accounts Payable


    PO Number Consignment Number Supplier Number Supplier Name Invoice Number Invoice Amount Landed Cost Amount Variance

    GRN Number

    Total

    16

    Question & Answers

    Q&A
    17

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