Commercial BOM

The commercial bill of material describes each family item in terms of the finished products involved. For example, let’s consider a finished product produced with two colors (blue and red for example). If the typical sales proportions correspond to 70% for the blue items and 30% for the red items, we will describe this using the commercial bom by introducing the corresponding proportion (namely 70% and 30%) of each finished product in the family item. This information is used in order to transform family sales forecasts (established during the S&Op Plans procedure) into individual item sales forecasts that are necessary for each finished product’s master schedule. In the considered example, a family forecast of 100 units will be decomposed into a forecast of 70 units for the blue item and a forecast of 30 units for the red item. It is worth noting that the commercial boms have a unique level.

It is important noting that one can define for each link a validity time period. In this way, it is possible to define commercial bom links that evolve along time. For example, if the coefficient for FG1 is expected to be equal to 40% in 2004 and 45% in 2005, two links are created: a 40% link valid from 01/01/2004 to 12/31/2004 and a 45% link valid from 01/01/2005 to 12/31/2005.

When using the Distribution function (Preference menu) it is necessary to have sales forecasts for each regional distribution center. The individual item sales forecasts (in the master plans) are then decomposed for each distribution center according to the proportions defined in the Item reorder policy window. In this case, using the S&Op Plan Disaggregation function, item sales forecasts are established for each regional distribution center.

It is worth noting that item sales forecasts entered in the Sales forecast maintenance window (Sales menu) are automatically added to those forecasts obtained by the S&Op Plan Disaggregation function.