I had created two items here, Coffee beans which are the raw material and ground coffee which is the finished good. If I go into ground coffee here and go into the production side, I can see I've actually set up Production BOM number right here. If I go into that and show how that was done, it's pretty simple, basically, the finished good is ground coffee and the ingredients are going to be coffee beans and there is going to be 1 pound in 10% scrap.
Release production order
That’s it. If I go out of that, one thing to know, I don’t need the routing number, if I'm just doing a production with no necessary capacity planning, then the routing number I not necessary. I'm going to go ahead and create a release production order, so I go in here, hit new and enter to get a new one, go into item. The item that I want to make is ground coffee like that. I say how much quantity I need, let's say 80 pounds and I say refresh production order and hit ok.
That will create the finish good line here for 80, and if I go into the line for example and look at the components, you can see that its estimating 88 pounds for 80, because its 10% scrap, so you can see that the system is adding the 10% in the requirement. So how do we get something out of this? we go into the production journal in the line and say that we used 90 and we output at 80 pounds, so all we must do here is to record the component and the output and go ahead and post, say yes. Now it's been posted so, we can now look at the actual item.
From the production order, I can take a look at the entries that were created and that is the same thing as the item, it's filtering the item ledger entries based on the production order and I can see here that I have consumed 88 and 2, so actually consumes 90 and it splits it out because we did do two more than we expected and then the output is 80. If I go into my inventory list, I can see the ground coffee has 81, I had made before, I was testing for this video, now I0ve made 80, so that why I have 81.
I go in here, navigate > entries >, ledger entries, I can see that it has been outputted, so that's how it can convert. Maybe next time we'll move into how we actually get the cost over, you can see the post is zero here, I think on the items I have zero cost so I have not got into the costing of things, but that would be the logical step, to analyze that and set up something with real costs. Until next time!