D365FO – Calculation groups
Microsoft describe calculation groups in the following way: “A calculation group controls the BOM calculation policies that are applied to the product during BOM calculation.”
It is important to notice that it is used for BOM calculation, but the selected Calculation group on a purchased item that is selected on a BOM, determine the cost price used for that item when calculating the item price for a BOM item.
Calculation groups can also be used to calculate sales price for the released products and different warnings can be setup to ensure the quality of the components used in the calculation are present when calculating or not outdated.
You can set up many calculation groups but one for produced BOM items and one for purchased items is often sufficient.
A calculation group can be set up on the released product on the Engineer tab and used when calculating item price for that specific item.
A default / fall back calculation group can be set up in Inventory management parameters on the Inventory accounting tab. This calculation group is used if a released product do not have a calculation group.
When you calculate an item price and no calculation group is set up on the item / in Inventory management parameters, D365FO will inform you that a prerequisite for calculating is not present and calculation is not possible.
Setup a calculation group
The setup is divided into sections: COST PRICE, SALES PRICE, OTHER and WARNING.
Cost price model
Determines where to find the cost price used in the calculation of an item. Calculation is done per Site. There are four Cost price models available:
Item cost price:
Price on the released product on the Manage Cost tab is used.
This price is used in the BOM calculation.
Item purchase price:
Price on the released product on the Purchase order tab is used.
This price is used in the BOM calculation.
Trade agreement:
A trade agreement with the purchase price for the item is used.
This price is used in the BOM calculation.
Inventory price:
The current inventory value for the item is used to calculate the unit cost used in the BOM calculation. The prerequisite for calculating a price is that quantity is more than zero.
The average unit price for the site is used in the BOM calculation.
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Alternate cost price model
Used if a price cannot be found using the Cost price model price. The same four principles are available as in Cost price model.
Sales price
There are two options for the calculation of the Sales prices field:
Item sales price: Price on the released product on the Sell tab is used.
Stop explosion
In general, “No” is selected in stop explosion. Select “Yes” in Stop explosion when a manufactured item is treated as a purchased item. It can be used for an item that is sometimes produced and sometimes purchased.
Microsoft describe the functionality in Learn: “Depending on the site, the item's cost can still be calculated by using BOM calculations. Explosion of planned purchase orders and production orders is stopped at the BOM whose components are associated with the calculation group that the Stop explosion check box is selected for. Master scheduling generates the planned orders on the BOM itself, not on the items that are included in the BOM. Basically, by selecting this check box, you specify that a cost won't be added into the BOM calculation for items that have this calculation group.”
Warning
If the setup used in BOM calculation is missing or cost prices used in calculation are outdated, different warnings can be set up.
· No BOM: if no active BOM version is found for one of the components or the parent item that the BOM calculation is run for
· No route: if no active route version is found
· No resources: if a resource isn't found on every line in the active route
· No consumption: Consumption is the quantity in a particular route (amount of time that is required to perform a specific operation for a production process).
· No cost price: if an item used in calculation has no cost price. If there's no active cost price for an item, no cost is added into the BOM calculation.
· Max. age of cost price: to ensure that the calculation do not use outdated cost prices you can insert the number of days since the cost price was entered that you allow in the calculation
· Max. contribution margin: If you enter 10 the calculated contribution margin for the calculated item must not be lower than 10.
Estimate production orders
When you estimate a production order, the different calculation groups selected either in Inventory accounting policies setup > Parameters or on individual released products, calculation groups are used and not one of the Costing version setups for calculation of item price.
Calculation group examples
Thanks for sharing most valuable content, it is so helpful
Hi Sten, this post is very very helpful, a real masterpiece! I have a question for you. I have a customer who uses standard costs and some items have multilevle BOM ( for example level is 5 ). When he runs calculation of std costs from menu Cost management/Predetermined cost policies setup/costing versions he has to run calculation first for level 8 items, then 7, then 6... otherwise an item which is made of B + c which is made of D+E ecc doesn't show the right cost. It sounds strange to me. Isn't there a way to launch calculation one shot only and the system suggests the right cost? thanks
Ahmed Helal
Thx for sharing (it’s super clear) 🤓