1. Template v7 January 30, 2013 1 Copyright © 2013. Infor. All Rights Reserved. www.infor.com 1 LN: v10.3 to v10.4 Moving Average Unit Cost (MAUC) Hours Differences LN 10.4 Rollout Training Campus course code:02_0021040_EEN0433_ELN June 2014 Patrick Noblett, Business Analyst, patrick.noblett@infor.com

2. Template v7 January 30, 2013 2 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Intended Audience Pre-Sales Consulting Support Pre-requisites to know: The concepts of Moving Average Unit Cost (MAUC), Last in First Out (LIFO) and First in First Out (FIFO) from industry perspective How LN handles actual costing methods such as Moving Average Unit Cost, Last in First Out (LIFO), and First in First Out (FIFO).

3. Template v7 January 30, 2013 3 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Agenda Why – Moving Average Unit Cost (MAUC) Hours Big Picture Business Requirement Business Problem What Solution Overview Solution Details Summary

4. Template v7 January 30, 2013 4 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Big Picture Aerospace &Defense (A&D) companies work in a project based environment A&D companies work with actual costing methods such as Moving Average Unit Cost (MAUC) for valuation of the items they make for customers Actual costing helps to better compare costs to budgets for profitability of a project Labor hours are tracked on projects and budgeted on projects. Each project that makes something will have its own MAUC or project MAUC (PMAUC) Projects tend to share inventory or transfer excess to other projects.

5. Template v7 January 30, 2013 5 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Business Requirement A&D companies need the hours and the inventory value of an item. The hours need to move from the project that made the item to any project that ultimately gets the item (via transfer of project ownership). Hours are captured and stored for the items that are delivered to the end customer (a government agency) Pegged Items Need to capture hours (internal to the company) that made a pegged ite Do not need production subcontracting hours (these are external) Have the hours roll into another Bill of Material Level Non-Pegged Items When making non-pegged items, the hours need to be tracked Have the hours roll into another Bill of Material Level

6. Template v7 January 30, 2013 6 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Business Problem No production hours associated with an item’s value means, when an item is moved to another project, the new project : Applies incorrect overhead (total project costs are wrong) Bills customers incorrectly (customers get invoices based on bad information) Incorrectly track project progress based on hours correctly, leading to overruns and projects out of control Ultimately incorrect project profitability leads to incorrect company profitability

7. Template v7 January 30, 2013 7 Copyright © 2013. Infor. All Rights Reserved. www.infor.com 7 Solution Overview - MAUC Hours

8. Template v7 January 30, 2013 8 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Software Requirements Retain Production Hours as part of the warehouse value (Project MAUC (PMAUC), MAUC, Last in First Out (LIFO), First in First Out (FIFO), Fixed Transfer Price (FTP)) New field called Moving Average Unit Hours (MAUH) Allows transfer of hours and costs between projects (which happens often) Allows (re) calculation of overhead costs based on hours invested Allows Projects to bill based on hours when appropriate (Time and Material or Cost Plus Invoicing) Production Orders costing has to incorporate and pass the hours into Warehousing, Finance and Project Extend internal Work In Process

9. Template v7 January 30, 2013 9 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Actual Hours =5 per piece Actual Hours =28.5 per piece Actual Hours =1222.25 per piece Total Actual Hours =1222.25 per piece + 38.5 from issued mfg per piece =1260.75 Total Actual Hours =5 per piece Total Actual Hours =28.5 +10 (2x5) from issued mfg per piece = 38.5 Total Hours for End Item Production – Hours roll up like costs into End Items

10. Template v7 January 30, 2013 10 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Orders Impacted Production Order (non-pegged) (pegged) Production hours variance Revaluation Orders MAUC Correction by Item Actual Costs Correction Cost Peg Transfer Inventory Adjustment/Cycle Count Orders

11. Template v7 January 30, 2013 11 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Production Orders Manufactured items will be issued with ‘production hours’ Use standard cost price ‘unit hours’ when manufactured material has FTP valuation method Most all procedures related to costing is touched: Hours booking Issue Handling Receipt Handling Close Order (Variance Calculation) Pegged and Non-pegged Items included

12. Template v7 January 30, 2013 12 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Cost Peg Transfer – Prior to 10.4 Project A Project B Costs Hours Soft Pegged

13. Template v7 January 30, 2013 13 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Cost Peg Transfers – 10.4 Project A Project B Costs Hours Soft Pegged

14. Template v7 January 30, 2013 14 Copyright © 2013. Infor. All Rights Reserved. www.infor.com MAUC Hours Parameters Implemented Software Components (Concepts (Logistics)) Hours in Costing (this to show them or not on various sessions). Other parameters to consider Inventory Handling Parameters (Receipts Tab) Default Inventory Receipt Value Standard Cost (Always takes standard hours) Inventory Value (Will take inventory value to determine hours)

15. Template v7 January 30, 2013 15 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Sessions containing MAUC Hours Inventory Receipt Transactions (whina1512m000) MAUC by Warehouse Valuation Group (whina1534m000) Inventory Consumptions (whina1514m000) Inventory Variances (whina1516m000) Item Lot (whltc1100m000) and Lot Cost Details (whltc1501m000) MAUC Correction by Item (whina1231m000) Actual Cost Correction (whina1230m000)

16. Template v7 January 30, 2013 16 Copyright © 2013. Infor. All Rights Reserved. www.infor.com MAUC by Warehouse Valuation Group (whina1534m000)

17. Template v7 January 30, 2013 17 Copyright © 2013. Infor. All Rights Reserved. www.infor.com MAUC Correction by Item (whina1231m000)

18. Template v7 January 30, 2013 18 Copyright © 2013. Infor. All Rights Reserved. www.infor.com Summary Big Picture – A&D companies need hours in the value of items for project management, overhead application and invoicing Solution – MAUC Hours added to inventory costing When inventory (happens often) is moved from one project to another the costs and hours can move Take some time to review this for yourself

19. Template v7 January 30, 2013 19 Copyright © 2013. Infor. All Rights Reserved. www.infor.com