SAP Business One production planning: MRP, production orders, cost and variances

Production order cost follows the item's valuation method. Components are issued at their cost, and finished goods are received at the order cost. With standard costing, the receipt is valued at the standard price of the finished item and the difference between actual consumption and standard is posted as a variance when you close the order. With moving average or FIFO, the finished goods take the actual cost.

A true multi-level rollup of standard cost is not a one-click function in the standard application. A common approach is to calculate the BOM cost from component prices (for example with a price list based on component cost), then update the finished item's standard price through a controlled process, such as a DI API script or an add-on. Confirm the options available in your version before you design the process.

The standard module does not provide finite capacity scheduling, work center routings with operations, co-product and by-product management, formula recipes with potency or yield adjustments, or shop floor data collection. Companies in process industries such as food, chemicals and pharma, or those with complex discrete routing, usually add a partner manufacturing solution built on the Business One platform.

When you evaluate add-ons, test them against your real BOMs, a real month of orders, your costing method and your upgrade path, and ask how they handle the next feature package. A short pilot on a cloned database is cheaper than a wrong decision.