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Handling of Partial Completions On Production Order

  • 1 May 2023
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I am wondering how other folks might be handling the following scenario.  We have a production order of 100 with 50 completed. We have an order of 10 being requested as an “emergency” order. In the past, we would just do a partial to put this into inventory and ship it out. However, what happens is this absorbs all of the cost onto the 10 then adds the other items in @ 0 cost. However, this causes a lot of cost issues. 

I am sure we can't be the only manufacturer that does this type of thing. I would love to know how others handle this.  

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Best answer by Debbie Baldwin 1 May 2023, 14:44

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@cmoreland  - change the cost type of the Production Order to Estimated. (Instead of Actual) This will help to smooth out the costs. It still uses Actual costs - it just doesn’t throw all the costs onto the first 10 like you state above. Do a few tests - I think you will like this better. 

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@Debbie Baldwin Thanks so much, I am going to test this and let you know. 

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@Debbie Baldwin Thanks again for the suggestion. I spent some time testing this. The thing I concluded is this is good as long as your job estimates are pretty spot on. We are a pretty custom shop so sometimes we have builds that just have never been done before so the estimates can be off the first run or two. the problem here is if we had 4 hours on something but realized it at 1 hour we still end up eating the 3 additional hours + overhead in the final cost. This might not be a big deal in some smaller instances however we have 100.000.00 + builds that can get out of control kinda quickly. Just some food for thought. 

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