Landed Cost Scenarios 1
#Landed Cost, #BusinessCase, #D365FnO, #SCM
Scenario: We have one Item βP-0001β which we are purchasing from a vendor βAcme Office Suppliesβ, The item purchase price is β2000$β and Quantity = 1
Now this product is transported by a shipping(freight) vendor βVendor Aβ - during transportation, the Item has been charged different costs:
Freight fee
Insurance fee
Fuel fee
Local Transportation fee
So, now at the time of purchase order creation, we know the estimated cost for each of these:
Freight is 200$ / Quantity => Freight fee = 200$ x 1 = 200$
Insurance, 10% of Item Purchase price => Insurance fee = 10% x 2000$ = 200$
Fuel is 1$ / measurement => so letβs say it is 60kg, then Fuel fee = 11$ x 50Kg = 60$
Local Transportation is 20 % of "Freight cost" => Local Transport fee = 20% x 200$ = 40$
Therefore:
Total Estimated cost for Item "P-0001" = 200$ + 200$ +60$ + 40$ = 500$
Total Item landed cost for Item "P-0001" = 2000$ +500$ = 2500$
However, the shipper sends an actual billing as 600$ instead 500$ as before.
So, the final Landed Cost of Item must be recalculated = 2000$ + 600$ = 2600$. Then, the system should post the adjustment transaction as 100$ based on the Landed Cost Estimation.
BSD 1: Actual Freight bill received after Item is received and invoiced.
Item Cost at the time of Purchase order Invoice: 2000$ + 500$ = 2500$ Estimated cost
Adjustment due to Actual freight Invoice = 100$ USD
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