Products or services - the items in your proposal as well as the bill of material components - are typically synchronized from SAP material master or created directly in this application if only used for proposal costing purposes.  From the product or service list double-click on an item to open the details, giving several tabs:

• Product key information
• Product estimating parameters explained below
• A view of the product's standard bill of material
• Comments & files attached to this product
• History

The PLANNING & ESTIMATING tab has the following attributes:

1. An indicator if the product or service is purchased, manufactured in house (make-part) or manufactured at vendor. Sub-contracted parts are purchased but have a bill of material for the parts provided to the vendor to make it from
2. The estimating method for this part's cost estimate e.g. purchased or make part estimate, which in turn determines how it is costed
3. How set-up quantity (for make parts) or the pricing quantity (for purchased parts) is determined. This affects both the set-up time which is amortized or spread over the set-up quantity and the purchased part volume discounts or quantity adjustment factors when costing this part. The options are:
   • Consolidate the total quantity in the proposal or quote for this part number into a single lot for pricing purposes, with any optional proposal line items or optional phases being priced separately. Technically speaking, parts in the same proposal for a different make/buy, supply plant or estimating method are also separated into separate lots for pricing purposes
   • Consolidate all the requirements over a specific time period into a single lot for set-up calculation or purchased part pricing purposes. By default all requirements in a calendar month are combined, so for example the same part number required in July would be a separately priced lot to that part required in June. You can however consolidate all requirements by calendar year, or by quarter. Calendar year is useful if the unit costs are deemed to vary significantly from year to year
   • Consolidate requirements into fixed lot sizes, where the lot size is specified in this tab. All requirements "up to" the fixed lot size are combined into a single proposal, and priced according to that lot size. The cost of each requirement is then the unit cost, or total cost / fixed lot-size multiplied by each requirement's quantity. For example if the part is produced or purchased in lots of 100, then pricing is for 100, and if there are six requirements for 30 the first four (up to 120) will be priced according to the first lot of 100, and the last two requirements for 30 according to the second lot. Typically with the lot-size constant the unit cost is also constant however it is possible that they have different inflation factors, given that costing proposals are based on the earliest requirement date consolidated into each lot
4. Once the cost of each requirement has been established it is important to control how these costs are distributed over the period of performance of the WBS for cashflow reporting purposes. By default material costs are distributed based on the earliest requirement date, which is in turn calculated based on the lead-time offset and due-before the proposal line item delivery date, as measured down the bill of material or BOM. This "MRP style" requirement date calculation is highly accurate accommodating each BOM component's lead time, however it is dependent on having accurate lead times
   • May companies pad their lead-times or set them all to default values like 2 months resulting in costs being projected to be several months earlier than necessary
   • An option to get around this issue is to distribute costs according to a distribution curve over the BOE-WBS start and end dates. This curve, such as a bell-curve, is specified in the WBS and results in material cost proposals being "spread out" between the BOE-WBS start and end dates to achieve the right cost profile. This is an approximation because each material falls into a single calendar month, so large value material costs can skew the cost profile and make it a not quite perfect match to the distribution curve.

5. The production or procurement lead-time is copied in the proposal-specific BOM and can be edited there. It determines how far back in time any sub-components of this product are needed prior to the need date for this part. Costs for this part will be incurred when it is required, not when required minus lead-time; it is the cumulative lead time or "due before" of higher level assemblies which dictates when this part's cost will be incurred in other words

6. The scrap factor is also copied into the proposal-specific BOM and can be edited there. It determines how requirement quantities are calculated - the extended BOM quantity is calculated as:

           quantity of next higher assembly x quantity in next higher assembly x ( 1 + scrap factor )

7. Which site, department or plant-code in SAP is primarily responsible for managing this product. Unlike SAP, where material data is defined separately in each plant, the product master data is shared between all sites in this application

8. If this is a part which is procured from or supplied by a specific plant in your company, select it here. This is based on the configuration of the special procurement key in SAP.  It determines which plant to first search for routings to use to determine make part hours and resource groups for costing purposes.