| # Subcontracting rates Subcontracting rates can be specified in the Subcontracting Rates (ticpr1160m000) session by price calculation code, subcontractor, and Task. How subcontracting costs are calculated, and consequently, how the subcontracting rate must be interpreted, depends on the Calculation Method for Subcontracting Costs field in the Subcontracting Rates (ticpr1160m000) details session. This field can be set to: Fixed Amount by Product Operation Rate Man Hour Rate Machine Hour Rate Fixed Amount by Product The costs or prices are calculated by multiplying the end item quantity displayed in the Ordered Quantity field in the Purchase Order Lines (tdpur4101m000) session by the subcontracting rate. Select this method if the subcontracting costs are directly related to the number of subcontracting items. The subcontracting costs are based on the gross input of the end items. Operation Rate The costs or prices are calculated by multiplying the end item quantity displayed in the Ordered Quantity field of the Purchase Order Lines (tdpur4101m000) session by the subcontracting rate factor and the subcontracting rate. The subcontracting rate factor is defined in the Routing Operations (tirou1102m000) or the Subcontract Operations (tisfc2210m000) sessions. Use this method if the subcontracting costs relate to the number of products, but an extra factor is required. Example: The painting of the item is subcontracted. The subcontracting rate is defined as $50 per square meter painted. Each item has a surface area of 2.5 square meters, which is entered as the rate factor. In addition, the subcontracting rate is based on the end item quantity displayed in the Ordered Quantity field of the Purchase Order Lines (tdpur4101m000) session. Man Hour Rate If the method is man hours rate, the costs or prices are calculated by multiplying the estimated man hours by the subcontracting rate. The estimated man hours are calculated using the operation planning data such as gross end-item quantity, cycle time, and man occupation. Machine Hour Rate If the method is machine hours rate, the costs or prices are calculated by multiplying the estimated machine hours by the subcontracting rate. The estimated machine hours are calculated using the operation planning data, such as gross end-item quantity, cycle time, and machine occupation. To view examples of the calculation methods, refer to Examples of subcontracting rates. Related topics Overview of subcontracting Examples of subcontracting rates Subcontracting purchase prices |