Transfer Orders Freight Costs Question

(Simon Hall) #1

Hello, This is not an area I am too familiar with.

Is there a way to add any additional cost(freight) to transfer orders? E.g. when a part is ship transferred from site A to site B, then this additional cost(freight) is added to cost of the product when received in site B. Costing method used is Avg. Cost.

How do others capture costs when transferring stock between plants/site?


(Ken Adams) #2

Hi Simon,

No, there is nothing in the standard system to allow for the addition of shipping charges on transfer orders.

Is the part always a transfer part in the other plant?


(Andrew Saldivar) #3

We’re also average costing and have found that, in order to add costs to parts for many of the handling tasks we perform, we have to issue to a very basic job.

(Simon Hall) #4

All the parts are purchased. A whilst we do have stock direct shipped to our other sites, our main warehouse transfers stock on a regular basis to other sites. There is a freight cost associated with that, which is different dependent on the destination. So the ideal situation is that freight charge is applied based on a matrix of costs for the transfer order and the Avg cost is recalculated for the specific part/plant(site) on receipt.

All we are really doing is moving stock around to ensure orders can be fulfilled from a particular site, call it a replenishment transfer for the sake of other terms.

What effect does setting the Part-Site-Type from purchased to transfer have apart from enabling the from site and transfer lead time fields?

I guess at the end of the day if you are using a replenishment model of inventory the need for performing transfer orders will be reduced over time, as the stock will be received from the supplier to the correct site and the correct quantities to meet demand between shipments arriving from the supplier. But the need will always be there particularly where we value add in our main site and ship out to the others.


(Nancy Hoyt) #5

Hi Simon,

We transfer many parts normally, both manufactured and purchased. We have parts that are always desired for transfer setup on the Part / Site tab. With this variable setup say for Purchase in plant A and Transfer in plant B, whenever plant B doesn’t have the part in stock and needs it, the system will want it to be satisfied via transfer order. We run MRP and transfer order suggestions are made daily. Where plant A doesn’t have it in stock, plant A will be told to purchase the part via purchase suggestion and then transfer suggestion is made to send down to plant B.

Therefore, where parts are not desired to transfer pretty much all of the time, it might not be so good to setup as transfer as you will purchase to a wrong site and send to the right site in these cases… quite inefficient.


(Ken Adams) #6

Hi Simon,

What about taking the average freight cost and then simply adding a material burden percentage to the parts?


(Simon Hall) #7

Thanks Ken, I’ll make that suggestion.