A Discrete manufacturing company produces speakers.
The high-end speaker model uses protective rubber strips on the edges.
Approximately five inches of rubber is consistently scrapped in the production process, regardless of production quantity.
Workers manually consume the extra material on the picking list or scrap it in an inventory journal.
You need configure the system to automatically account for this scrap on the Bill of materials (BOM)
What should you do?
Click on the arrows to vote for the correct answer
A. B. C. D.D.
References: https://docs.microsoft.com/en-us/dynamicsax-2012/appuser-itpro/about-information-used-in-bom-calculations-with-standard-costs.
In this scenario, the company consistently scraps around five inches of rubber in the production process. The challenge is to configure the system to automatically account for this scrap on the Bill of Materials (BOM). The BOM is a list of all the materials and components required to produce a finished product. It includes the quantity of each item required for production.
Option A suggests increasing the required quantity of the rubber component by five on the BOM. This option is not ideal as it would result in overconsumption of rubber, which could increase production costs and potentially affect the quality of the product.
Option B suggests setting a variable scrap of five percent for the rubber BOM line. This option is better than option A as it accounts for the consistent scrap during production, but it assumes that the scrap percentage is always five percent, which may not always be the case. Additionally, this option may not be accurate for smaller production quantities.
Option C suggests adding an additional BOM line for five inches and setting consumption to Variable. This option is more accurate than option B because it specifically accounts for the consistent scrap of five inches in the production process. However, it may result in additional administrative work to manage the extra BOM line.
Option D suggests setting a Constant scrap of five on the BOM line for rubber. This option is the most accurate as it accounts for the consistent scrap of five inches in the production process, without the need for an additional BOM line. This option also allows for easier management and accurate costing of the product.
In conclusion, option D, setting a Constant scrap of five on the BOM line for rubber, is the most appropriate option as it accurately accounts for the consistent scrap of five inches in the production process, without the need for an additional BOM line.