PRODUCTION CONTROL – PART #1
Overview of series – Learning discrete manufacturing and understanding costing by setting up scenarios in dynamics 365.
Overview of this document – Here we are only discussing the production scenario which we will be testing in the ERP system.
Scenario………………………………………………………………………………………………………. 1
- ABC GAMING LAPTOP PRODUCTION SCENARIO WITH TWO VARIANTS
ABC Gaming Laptop product master has only two variants based on: –
- size,
- color,
- configuration (16GB or 32GB RAM), Variants: –
- Variant 1: 14″, Silver, 16GB
- Variant 2: 6″, Black, 32GB
These variants maintain the ABC Gaming Laptop context, with slight changes to:
- BOM: Adjusted for size (display panel, chassis) and RAM configuration, with color-specific chassis coating.
- Route Operations: Include size-specific display attachment and color-specific chassis finishing, as in the previous
- Indirect Costs: Slightly increased to account for variant management, but kept
- Costing will use the existing rates (labor and robotic at $10/hour) with the “Setup C Run Cost per Operation”
Product Master: ABC Gaming Laptop Variants
The ABC Gaming Laptop is a high-performance gaming laptop with the following base specifications:
- Processor: AMD Ryzen 7 5800H (8 cores, 16 threads, up to 4 GHz)
- Storage: 512GB NVMe SSD
- Graphics: NVIDIA GeForce RTX 3060 (6GB GDDR6)
- Keyboard: RGB backlit with anti-ghosting
- Battery: 48Wh Li-ion, up to 6 hours
- Connectivity: Wi-Fi 6, Bluetooth 5.0
- Operating System: Windows 11 Home (pre-installed)
Variant Options
The product master defines two variants:
· Variant 1 – ABC Gaming Laptop (14″, Silver, 16GB):
- Size: 14″ Full HD (1920×1080) IPS, 144Hz
- Color: Silver
- RAM: 16GB DDR4 (2 x 8GB, 3200 MHz)
- SKU Code: ABC-14-SIL-16
· Variant 2 – ABC Gaming Laptop (15.6″, Black, 32GB):
- Size: 6″ Full HD (1920×1080) IPS, 144Hz
- Color: Black
- RAM: 32GB DDR4 (2 x 16GB, 3200 MHz)
- SKU Code: ABC-15-BLK-32
Bill of Materials (BOM) with Costing
BOM for ABC Gaming Laptop (14″, Silver, 16GB)
| Component | Quantity | Unit Cost ($) | Total Cost ($) | Description |
| Motherboard | 1 | 150.00 | 150.00 | With AMD Ryzen 7 5800H and RTX 3060 |
| RAM Module | 2 | 30.00 | 60.00 | 8GB DDR4 3200 MHz (16GB total) |
| SSD Storage | 1 | 80.00 | 80.00 | 512GB NVMe SSD |
| Display Panel | 1 | G0.00 | G0.00 | 14″ FHD IPS, 144Hz |
| Keyboard Assembly | 1 | 40.00 | 40.00 | RGB backlit, anti-ghosting |
| Battery Pack | 1 | 60.00 | 60.00 | 48Wh Li-ion battery |
| Chassis (Top, Silver) | 1 | 48.00 | 48.00 | Aluminium top cover, silver coating |
| Chassis (Bottom, Silver) | 1 | 43.00 | 43.00 | Aluminium base, silver coating |
| Cooling Fan | 1 | 15.00 | 15.00 | Thermal management fan |
| Heat Sink | 1 | 20.00 | 20.00 | Copper heat sink for CPU/GPU |
| Webcam Module | 1 | 10.00 | 10.00 | 720p HD camera with microphone |
| Speakers | 2 | 5.00 | 10.00 | Stereo speakers |
| Wi-Fi/Bluetooth Module | 1 | 25.00 | 25.00 | Wi-Fi 6, Bluetooth 5.0 |
| Power Adapter | 1 | 30.00 | 30.00 | 65W USB-C charger |
| Screws and Fasteners | 20 | 0.10 | 2.00 | Various sizes for assembly |
| Thermal Paste | 1g | 2.00 | 2.00 | For CPU/GPU thermal interface |
| Total BOM Cost | 645.00 |
BOM for ABC Gaming Laptop (15.6″, Black, 32GB)
| Component | Quantity | Unit Cost ($) | Total Cost ($) | Description |
| Motherboard | 1 | 150.00 | 150.00 | With AMD Ryzen 7 5800H and RTX 3060 |
| RAM Module | 2 | 55.00 | 110.00 | 16GB DDR4 3200 MHz (32GB total) |
| SSD Storage | 1 | 80.00 | 80.00 | 512GB NVMe SSD |
| Display Panel | 1 | 100.00 | 100.00 | 15.6″ FHD IPS, 144Hz |
| Keyboard Assembly | 1 | 40.00 | 40.00 | RGB backlit, anti-ghosting |
| Battery Pack | 1 | 60.00 | 60.00 | 48Wh Li-ion battery |
| Chassis (Top, Black) | 1 | 50.00 | 50.00 | Aluminium top cover, black coating |
| Chassis (Bottom, Black) | 1 | 45.00 | 45.00 | Aluminium base, black coating |
| Cooling Fan | 1 | 15.00 | 15.00 | Thermal management fan |
| Heat Sink | 1 | 20.00 | 20.00 | Copper heat sink for CPU/GPU |
| Webcam Module | 1 | 10.00 | 10.00 | 720p HD camera with microphone |
| Speakers | 2 | 5.00 | 10.00 | Stereo speakers |
| Wi-Fi/Bluetooth Module | 1 | 25.00 | 25.00 | Wi-Fi 6, Bluetooth 5.0 |
| Power Adapter | 1 | 30.00 | 30.00 | 65W USB-C charger |
| Screws and Fasteners | 20 | 0.10 | 2.00 | Various sizes for assembly |
| Thermal Paste | 1g | 2.00 | 2.00 | For CPU/GPU thermal interface |
| Total BOM Cost | 70G.00 |
BOM Notes
- Size:
- 14″ (Variant 1): Smaller display ($90 $100) and lighter chassis ($48/$43 vs. $50/$45) reduce costs.
- 6″ (Variant 2): Larger display and chassis increase costs.
· Color:
- Silver (Variant 1): Slightly lower chassis cost due to simpler coating ($48/$43).
- Black (Variant 2): Higher chassis cost due to premium coating ($50/$45).
· Configuration:
- 16GB (Variant 1): 2 x 8GB DDR4 ($30 each, $60 total).
- 32GB (Variant 2): 2 x 16GB DDR4 ($55 each, $110 total).
Route Operations with Costing, Batch Sizes, and Resources
The assembly process is nearly identical for both variants, with minor changes:
- Display Panel Attachment: Adjusted run time for 14″ 15.6″ displays.
- Chassis Finishing: Color-specific coating (Silver or Black). Rates: labor and robotic operations both at
$10/hour. The table includes the “Setup C Run Cost per Operation” column.
| Operation | Type | Resource | Batc h Size | Setu p Time (hr) | Run Time (hr/uni t) | Setup s Run Cost per Operatio n ($) | Setup Cost ($/uni t) | Run Cost ($/uni t) | Total Cost ($/uni t) | Applie s To |
| Motherboa rd Preparatio n | Roboti c | ThermalBot
-1 |
200 | 0.50 | 0.033 | Setup: 5.00,
Run: 0.33 |
0.025 | 0.33 | 0.36 | Both |
| Componen t Installation | Manua l | Technician Team A | 50 | 1.00 | 0.083 | Setup: 10.00,
Run: 0.83 |
0.20 | 0.83 | 1.03 | Both |
| Chassis Base Assembly | Roboti c | AssemblyB ot-2 | 150 | 0.75 | 0.05 | Setup: 7.50,
Run: 0.50 |
0.05 | 0.50 | 0.55 | Both |
| Cooling Fan and Battery Installation | Manua l | Technician Team B | 100 | 1.00 | 0.067 | Setup: 10.00,
Run: 0.67 |
0.10 | 0.67 | 0.77 | Both |
| Display Panel Attachme nt (14″) | Roboti c | DisplayBot
–3 |
200 | 0.50 | 0.033 | Setup: 5.00,
Run: 0.33 |
0.025 | 0.33 | 0.36 | Varian t 1 |
| Display Panel Attachme nt (15.6″) | Roboti c | DisplayBot
–3 |
200 | 0.50 | 0.05 | Setup: 5.00,
Run: 0.50 |
0.025 | 0.50 | 0.53 | Varian t 2 |
| Keyboard and Webcam Installation | Manua l | Technician Team C | 50 | 1.00 | 0.083 | Setup: 10.00,
Run: 0.83 |
0.20 | 0.83 | 1.03 | Both |
| Chassis Finishing (Silver) | Roboti c | CoatingBot
–6 |
100 | 0.50 | 0.017 | Setup: 5.00,
Run: 0.17 |
0.05 | 0.17 | 0.22 | Varian t 1 |
| Chassis Finishing (Black) | Roboti c | CoatingBot
–6 |
100 | 0.50 | 0.025 | Setup: 5.00,
Run: 0.25 |
0.05 | 0.25 | 0.30 | Varian t 2 |
| Final Assembly | Roboti c | AssemblyB ot-4 | 150 | 0.75 | 0.05 | Setup: 7.50,
Run: 0.50 |
0.05 | 0.50 | 0.55 | Both |
| Quality Assurance and Testing | Manua l | QA Team | 25 | 2.00 | 0.167 | Setup: 20.00,
Run: 1.67 |
0.80 | 1.67 | 2.47 | Both |
| Packaging | Mixed | PackBot-5 C Pack Team | 100 | 1.00 | 0.05 | Setup: 10.00,
Run: 0.50 |
0.10 | 0.50 | 0.60 | Both |
Total Operation Costs
- Variant 1 (14″, Silver, 16GB): $7.94 (uses Display Panel Attachment 14″ at $0.36 and Chassis Finishing Silver at $0.22)
- Variant 2 (15.6″, Black, 32GB): $8.19 (uses Display Panel Attachment 6″ at $0.53 and Chassis Finishing Black at $0.30)
Indirect Costs
Suppose we have only these two products produced and we have following indirect costs. Indirect costs are allocated per unit based on a production run of 100 units, with a slight increase for variant management.
| Indirect Cost Item | Total Cost ($) | Cost per Unit ($) | Description |
| Facility Rent | 1,000.00 | 10.00 | Monthly rent allocation |
| Utilities | 500.00 | 5.00 | Electricity, water, internet |
| Equipment Depreciation | 800.00 | 8.00 | Amortized cost of robotic arms, tools |
| Quality Control Software | 200.00 | 2.00 | Licensing for diagnostic tools |
| Worker Training | 300.00 | 3.00 | Ongoing training programs |
| Administrative Overhead | 425.00 | 4.25 | Management, HR, accounting, SKU tracking |
| Total Indirect Cost | 3,225.00 | 32.25 |
Cost Calculation Notes
- Setup s Run Cost per Operation:
- Setup Cost per Operation: Setup Time × E.g., Motherboard Preparation: 0.5 × 10 = $5.00.
- Run Cost per Operation: Run Time × Rate (per unit). g., Component Installation: 0.083 × 10 =
$0.83/unit.
- Setup Cost per Unit: Setup Cost per Operation ÷ Batch E.g., Component Installation: 10 ÷ 50 =
$0.20/unit.
- Run Cost per Unit: Same as Run Cost per E.g., Component Installation: $0.83/unit.
- Total Cost per Unit: Setup Cost ($/unit) + Run Cost ($/unit).
- Packaging: Mixed operation uses $10/hour
· Operation Changes:
- Display Panel Attachment: 14″ displays require less time (0.033 hr/unit 0.05 hr/unit), reducing costs ($0.36 vs. $0.53).
- Chassis Finishing: Silver coating is faster (0.017 hr/unit, $0.22) than Black (0.025 hr/unit, $0.30) due to premium finish.
- Batch Size: Robotic operations (e.g., Motherboard Preparation) use larger batches (200); manual QA uses smaller batches (25).
- Resources: CoatingBot-6 for chassis finishing; other resources
- Rates: Labor and robotic operations both at $10/hour.
Indirect Cost Notes
- Applicability: Same indirect costs apply to both
Total Cost Summary Variant 1: 14″, Silver, 16GB
| Cost Category | Cost per Unit ($) |
| BOM Cost | 645.00 |
| Operation Cost | 7.94 |
| Indirect Cost | 32.25 |
| Total Cost | 685.1G |
Variant 2: 15.6″, Black, 32GB
| Cost Category | Cost per Unit ($) |
| BOM Cost | 709.00 |
| Operation Cost | 8.19 |
| Indirect Cost | 32.25 |
| Total Cost | 74G.44 |
