CTO Cost Rollup

Cost Rollup Process For Configured Items
(CTO)
Devaraju Holenarasipur
Rajkumar Chockalingam
Copyright 2015 Oracle and/or its affiliates. All rights reserved. |
Objectives
How cost rollup works in case of Configured Items (CTO)
Key setups / Processes Involved
Agenda
1
Introduction
Cost Rollup Process For CTO
Basic setups and Process Flow
Scenarios
Troubleshooting CTO Cost Rollup Issues
Question And Answer
Introduction
What is Configure to Order

Environment in which product or service is assembled or kitted on receipt of
Sales Order
Includes ATO, PTO and Hybrids
ATO Configuration item is created from selected options using configurator
ATO Item can be used to Create Pre-Configurations

In case of PTO, Pick slip used to kit included items and selected options.
Introduction
CTO Cost Rollup
Calculates the cost of an Assembly Item (Configured item) as per the required
components, subassemblies, resources, and overheads.
Configuration item cost rollup is a single level cost rollup.
Optional Process that occurs during the Auto create configuration Process
Also can be run manually for all sales orders and preconfigured items using the
CTO Calculate Cost Rollup concurrent program.
Introduction
CTO Cost Rollup
If the organization is using standard costing, CTO will update the frozen cost of the
configuration with the cost rolled up in the CTO cost type.
If the costing organization is an average, LIFO, or FIFO organization, the valuation cost
of the item is not updated and the cost in CTO cost type serves as an estimated cost.
If a configuration item is purchased, an entry will be created in CTO Buy Cost type,
based on the list price of the configuration in the PO Validation Organization
CTO cost rollup will internally call Supply chain cost rollup.
Introduction
CTO Cost Rollup
In the case of Multilevel configuration items, CTO performs the cost rollup for all
configuration items in the BOM, starting with the lowest level configuration item.
Cost of the parent configuration uses the cost of the child configuration from the
CTO cost type.
For procured configurations, the cost specified in the profile BOM: CTO Buy cost
type is used as the Buy Cost, and is included in the rollup of the parent configuration
Make Configuration Cost Rollup Process

For Make configurations, the cost is rolled up by adding up the valuation costs of
all the components / subassemblies in the configuration BOM for which Include in
cost rollup flag is set to Yes.
The cost is first rolled up in seeded, non updatable CTO cost type, then the value
in CTO cost type is copied to frozen
This is the total Rolled up Cost for the configuration. The cost is calculated in the
manufacturing organization.
Buy Configuration Cost Rollup Process

If a configuration item is purchased, an entry will be created in the cost type
specified in the profile BOM: CTO Buy Cost type, based on the list price of the
configuration in the PO Validation Organization.
This cost is the total Rolled up Cost for the configuration.

The cost in the buy cost type will be used in the rollup only if the configuration has
a buy type sourcing rule in the assignment set.
If a configuration is procured, but does not have buy type sourcing rules, it will be
treated as a manufactured item for the purposes of cost rollup
Setups and Processes

Define Costs
Define items, BOM, routings
Setup valuation costs for Components and Subassemblies.
Define buy cost type
Setup MRP sourcing rules
Define sourcing rules
Assign sourcing rules to Assignment Set
Set up Profile Options

Run CTO Cost Rollup Program
10
Setups and Processes

Profile Options
BOM: CTO Perform Cost Rollup
BOM: CTO Buy Cost type
BOM: Match to Existing Configurations
MRP: Default Assignment Set
BOM: Send Notifications for Autocreate Config Exceptions
BOM: CTO Perform List Price and Purchase Price Rollup
11
Scenarios
Case 1: Make Configurations
Case 2: Pre-Configurations
Case 3: Buy Configurations
12
Scenarios
Case 1: Make Configurations
13
Make Configurations
Model Bill
14
Make Configurations
Setup items (Model)
15
Make Configurations
Setup items (Model)
Make Configurations
Setup items (Option Classes )
Make Configurations
Setup items (Option Classes )
Make Configurations
Model Bills Setup
Has two option classes under it.
Each option class has two optional
items.
Option class one has two procured
optional items under it.
Option Class two has two Sub
Assembly items under it.
19
Make Configurations
Option Class Bills Setup
Option Class1 have two procured components.

Optional check box Is checked.
Similarly option Class2 BOM is also set with two optional Sub-assemblies.
20
Make Configurations
Item Costs setup for components and subassemblies

Before performing Cost rollup,
ensure all components under
Model should have item cost
defined in Valuation (Frozen) cost
type .
Cost of Sub-Assemblies also
needs to be rolled up and updated
in frozen cost type since CTO cost
rollup process will perform only
single level rollup..
21
Make Configurations Process Flow

Create Sales Order
Enter sales order header
and line details.
For a model item,

Click on Configurator
Button to invoke
configurator
22

Configure using Oracle Configurator
In the configurator window,
after Choosing appropriate
Components, Click Finish
button to complete
configuration.
In this case the option items
under option class chosen are
highlighted
23

Book Sales Order
Once configuration is
complete , Option
Items chosen during
configuration are
copied into the sales
order line
24

Progress Sales Order
Actions(N)-> Progress Order
Next step is to progress the
model line to Create
Configuration.
Upon completion of this
process, The configured
item gets created and new
line is inserted to Sales
order line.
25

Newly Created Configuration Item
26

Configuration Item
Configuration Item (star
Item), Configuration BOM
and other related entities
are created by Auto Create
configuration process.
Configured Item :
Make_Model*381006
Base Model:
Make Model
27

Configuration Item BOM
28
Make Configurations Cost Rollup

Configuration Item cost details
Cost rollup is performed by auto create
configuration process, since profile option
BOM: CTO Perform Cost rollup is set to Yes.
The cost is rolled up in CTO cost type by
adding up the valuation costs of all the
components in the configuration BOM for
which Include in cost rollup flag is set to Yes.
In standard costing org, the cost in CTO cost
type is copied to Frozen cost type.
29
Make Configurations Cost Rollup Summary

Configured Item Make_Model*381006 Created with highlighted Components from Base Model
Cost of Configured Item

(Make_Model*381006)
Material ( 10 + 7.7+5.5) = 23.2

Resource ( 10 + 5) = 15
Total Item Cost = 23.2 + 15
= 38.2
30
Cost Rollup Scenarios
Case2: Pre-Configurations
31
Pre-Configurations Model Structure

Create Pre-configuration from the Base Model
32
Pre-Configurations - Setup
Setup items (Preconfigured Item)
Create a new item in the

master organization and
assign it to the appropriate
manufacturing organization.
Enter the base model

item (on which the preconfigured item is
configured) in the Base
Model field on the BOM
tab of the item master for
the pre-configured item.
33
Pre-Configurations Process Flow

Preconfigured Item Bill
Steps to Create Pre-Config BOM

Create a new bill of material for
your item, without
components.
Place your cursor in the
Components region.
From the Tools menu, choose

Configure Bill.
A New Configurator Screen will
open
34

Pre-configuration in Configurator
Configurator window is
launched from BOM.

After Choosing appropriate
button to complete configuration.
In this case the components
chosen are highlighted
35

Bill for completed Pre-Configuration
Once configuration is
complete , Option Items
chosen during configuration
process in configurator are
inserted in BOM accordingly,
and completes Configuration
BOM.
This process also creates
respective routings if there
are any for Model / Sub
Models
36

Pre-Configured item cost before rollup
Pre-Configured Item cost is

zero in both CTO and Frozen
cost types since CTO cost
rollup was not done.
37

Run CTO cost rollup
Profile option BOM: CTO
Perform Cost rollup is set to Yes
and this has no impact , as it is
applicable for configurations
created from sales orders
Run CTO Calculate Cost rollup
from BOM responsibility
Choose configuration and
created days ago request
parameter.
38
Pre-Configurations Item Cost Details

Pre-Configuration Item cost details
Cost is rolled up in CTO cost type
by adding up the valuation costs of
all the components in the
configuration BOM for which
Include in cost rollup flag is set to
Yes.
buy cost type does not have any
cost since Pre-configuration is a
make configuration.
The cost in CTO cost type is copied

to Frozen cost type.
39
Pre-Configurations Cost Rollup Summary

Pre Configured Item Make_PreConfig Created with highlighted Components from Base Model
Cost of Pre-Configured Item

(Make_PreConfig)
Material ( 15 + 7.7+6.6) = 29.3
Resource ( 10 + 5) = 15
Total Item Cost = 29.3 + 15
= 44.3
40
Cost Rollup Scenarios
Case3: Buy Configurations
41
Buy-Configurations
Model Bill
42
Buy Configurations - Setup

Setup items (Model)
43

Setup items (Model)
Under General Planning
tab ensure the Make or Buy
attribute value is set to Buy
44

Setup items (Option Class )
45

Model and Option Class Bill
Model Bill contains two
option classes under it.
Each option class have
two optional purchased
items.
46

Sourcing Rule creation and assignment
Sourcing rule is created with Buy
from sourcing type and assigned It
to Assignment set for the Buy
model.
If a configuration is procured, but

does not have buy type sourcing
rules, it will be treated as a
manufactured item for the
purposes of cost rollup
47

Profiles Set up applicable for buy configuration
Procured configuration item should have
a buy type sourcing rule in the assignment
set defined by MRP: Default sourcing
Assignment Set.
For Buy item, an entry will be created in

the cost type specified in the profile BOM:
CTO Buy Cost type, based on the list price
of the configuration in the PO Validation
Organization.
This cost is the total Rolled up Cost for
the buy configuration
48
Buy Configurations- Setup

Component Costs
Item cost is not set for any
components under of Buy
Model since this configuration
is procured and the cost is
rolled from list prices of
components.
Also Based on Rollup flag
needs to be manually checked
for Buy_Model since by default
it will be unchecked.
49

Component List Price
Similarly list price is set in
item validation
organization for other
two components
- Buy_OC2_Comp1 : 30
- Buy_OC2_Comp 2 : 35
50
Buy Configurations Process Flow

Create Sales Order
Create sales order for Base
Buy Model and click on
configurator button.
This action will invoke
configurator if the sales order
line is against a Model item.
51

Configurator Choosing the options
Choose the appropriate
button to complete
configuration.
In this case the components

chosen are highlighted
52

Book and Progress Sales order
53

Configuration Item Created
Configured Item
Buy_Model*381980 Is created
from base model (Buy_Model)
54
Buy Configurations- Process Flow

Configured Item
Configured item is created
and its list price is rolled up
during auto create
configuration process.
55
Buy Configurations- Process Flow

Configuration Item BOM and sourcing Rules
Configured Item BOM and Sourcing rule

created during auto create
Configuration process
56
Buy Configurations Item Cost Details

Configured Item cost details
Cost rollup is performed by auto create configuration
process, since profile option BOM: CTO Perform Cost rollup
is set to Yes.
An entry is created in the cost type specified in the profile
BOM: CTO Buy Cost type, based on the list price of the
configuration in the PO Validation Organization.
A single level cost rollup is performed in the CTO cost type,
using Buy cost type.
If the organization is using standard costing, the frozen cost
of the configuration is updated with the cost rolled up in the
CTO cost type
57
Buy Configurations Item Cost Details

Configured Item cost details
A single level cost rollup is performed
in the CTO cost type, using Buy cost
type.
If the organization is using standard
costing, the frozen cost of the
configuration is updated with the cost
rolled up in the CTO cost type
58
Buy-Configurations Cost Rollup Summary

Buy Configured Item Buy_Model*381980 Created with highlighted Components from Base Model.
List Price and Cost are rolled up.
Cost of Buy-Configured Item

(Buy_Model*381980)
Material ( 12 + 30) = 42
59
References - Troubleshooting CTO Issues

Note 1387196.1 -> Things to do Prior to Logging a Configure to Order (CTO) Service
Request or Bug in EBS Release 12
Note 1565190.1 -> Configure to Order (CTO) for a Basic Assemble to Order Item (ATO) for
Release 12 [Video]
60
Summary
What we covered today
Learnt Concepts around CTO Cost Rollup
Basic Setups for Performing CTO Cost Rollup
Demo flows for
Make Configurations
Pre-configurations
Buy Configurations
MOS Notes to troubleshoot CTO related Issues
61
THANK YOU
62

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Cost Rollup Process For Configured Items

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Cost Rollup Process For CTO

Basic setups and Process Flow

Troubleshooting CTO Cost Rollup Issues

Question And Answer

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

What is Configure to Order

ATO Item can be used to Create Pre-Configurations

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configuration Cost Rollup Process

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Buy Configuration Cost Rollup Process

This cost is the total Rolled up Cost for the configuration.

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Setups and Processes

Set up Profile Options

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Setups and Processes

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Case 1: Make Configurations

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Option Class1 have two procured components.

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Item Costs setup for components and subassemblies

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Process Flow

For a model item,

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Process Flow

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Process Flow

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Process Flow

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Process Flow

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Process Flow

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Process Flow

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Cost Rollup

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Make Configurations Cost Rollup Summary

Cost of Configured Item

Material ( 10 + 7.7+5.5) = 23.2

Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

Cost Rollup Scenarios

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Pre-Configurations Model Structure

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Create a new item in the

Enter the base model