Create Formula – A summary of the activity

This activity enables you to create formula for an item.

This activity is used to define the mix to be used for producing the primary product item or processing the primary input item. The “Type” that you set in the header governs this. A ‘Primary Product’ Header Type would mean that the Formula is defined to produce the Header Item. Alternatively, ‘Primary Input’ Header Type would mean that the Formula is defined to process the Header Item. A unique code identifies each formula.

The input items may include “Raw Material”, “Intermediate” or “Utilities”. The output items may include “Finished Good”, “Intermediate” or “Scrap”. Output items may further be classified as “Primary Product”, “Co-Product” and  “By-Product”. Similarly the input item is also defined as “Primary Input”. It is essential to ensure that a formula has atleast one Input (other than the Primary Input, if any) and one Output item with the type “Primary Product” or “Co-Product”.

Co-Products are items that are produced together with the “Primary Product”. These are planned during production and have net realization value. By-Products are unwanted products, which are produced along with the “Primary Product”. These are not planned during production and have a disposal cost or a negative realization value.

You can also categorize or group a set of formulae and identify them with a unique code.

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