Business Process Flow in Oracle Applications

Business Process Flow in Oracle Applications

Case Study:
Dell Computers is manufacturing Computers based on the Orders received
from the Customers.
Dell Computer has received an Order from IBM Corporation for supply of
Dell Computers. Dell computer Purchases Raw materials from two suppliers
for manufacture of Dell Computers.
Motherboard, Floppy Drive, Compact Disc Drive is purchased from
Flextronics Inc for manufacture of CPU subassembly.
Monitor, Mouse, Printer is purchased from HP Incorporated for manufacture
of Dell Computers. For the purchases made from HP Incorporated, Dell
computer Uses Self billing to make payment to the supplier.
The Cost Prices and the Process of Manufacturing is detailed below.

Assumptions:
1. It is assumed that for this cycle all the Basic set up required in Oracle
Applications is in order. (i.e) Business group, Set of Books, Operating
Unit, and Inventory Org.
Business Group – Vision Operations
Set of Books – Vision Operations
Legal Entity – Vision Operations
Operating Unit – Vision Operations
Inventory Org – M1-Seattle Manufacturing

2. Basic Set up required in Application Modules like (PO, INV, AP,
MFG, OM, AR & CM) are in place.

3. For this exercise, we are using Standard Costing which is set in the
Inventory Org – M1- Seattle Manufacturing
Dell Computers is Manufacturing Slim Computers and their Manufacturing Process is as follows
(M) Finished Goods
Assembly Department
10 Hours @ 40 USD per Hour
Monitor Mouse Printer CPU (Sub Assembly) (M)
(P) (P) (P)
500 USD 100 USD 900 USD
Mother Board CD Drive Floppy Drive
(P) (P) (P)
1000 USD 750 USD 250 USD
Soldering Department
10 Hrs to 10 USD per Hour
Fixing Department
4 Hrs @ 125 USD per Hour
P – Stands for Purchased Item
M – Stands for Manufactured Item.
Overheads Apportionment for this Product for each of the Department is as Follows
Soldering Department - 250 USD
Fixing Department - 400 USD
Assembly Department - 350 USD
Dell Computer
The Purchase cost of a CPU Sub Assembly Item is as follows
CPU (Sub Assembly)
Mother Board 1000 USD +
CD Drive 750 USD +
Floppy Drive 250 USD
--------------
Purchase Item Cost 2000 USD
=========
Manufacturing Cost of CPU Sub assembly is as follows
Purchase Item Cost is 2000 USD
Operations Cost
Soldering Dept Cost 100 USD
Fixing Dept Cost 500 USD
600 USD
Departmental Overheads 650 USD
--------------
Manufacturing Cost of CPU 3250 USD
========
The Purchase cost of a CPU Sub Assembly Item is as follows
CPU (Sub Assembly) 2000 USD
Mouse 100 USD
Printer 900 USD
Monitor 500 USD
--------------
Purchase Item Cost 3500 USD
=========
Manufacturing Cost of CPU Sub assembly is as follows
Purchase Item Cost is 3500 USD
Operations Cost
Soldering Dept Cost 100 USD Variable cost of an Item
Fixing Dept Cost 500 USD
Assembly Dept Cost 400 USD
1000 USD
Departmental Overheads 1000 USD Fixed Cost Apportionment
--------------
Manufacturing Cost of Dell Computer 5500 USD
========
Selling Price of Dell Computer is 6000 USD