<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/ti/onlinemanual/000026" xml:lang="en">
   <Header>
      <Title>Cost price calculation methods</Title>
      <Keyword type="header" order="d1e2410513">
         <Level1>Cost price calculation methods</Level1>
      </Keyword>
      <Keyword type="header" order="d1e2410516">
         <Level1>Calculation methods</Level1>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>The calculation method
		determines how the product structure is analyzed during the calculation of the
		cost price and the valuation price. The BOM that follows is used to explain the
		calculation methods:</Paragraph>
      <Figure space-and-orientation="indented-estimated">
         <HTML:IMG xmlns:HTML="http://www.w3.org/TR/REC-html40" height="288" width="230"
                   SRC="../images/tr_graph_tiom000026.gif"
                   alt="[...]"/>
      </Figure>
      <Paragraph>Top-down ERP Enterprise calculates the cost price of each item that affects the cost price of the
		selected item. During a cost calculation, ERP Enterprise analyzes the structure of the
		item by means of the <GUIRef href="/baanerp/ti/bom/tibom1110m000" role="session">Bill of Material (tibom1110m000)</GUIRef> session.</Paragraph>
      <ExampleSection>
         <SectionTitle>Example</SectionTitle>
         <Paragraph>When the cost price of
		  item C in the example is calculated, ERP Enterprise calculates the cost prices of items
		  E, D, and B in this sequence.</Paragraph>
      </ExampleSection>
      <Paragraph>Single-level: similar to
		the top-down method, except the cost price and the valuation price of the
		underlying structure that already exist, are adopted.</Paragraph>
      <ExampleSection>
         <SectionTitle>Example</SectionTitle>
         <Paragraph>When the cost price of
		  item C is calculated, ERP Enterprise reads the prices of items D and B in the <GUIRef href="/baanerp/ti/cpr/ticpr2505m000" role="session">Item - Cost Price Details (ticpr2505m000)</GUIRef> session.</Paragraph>
      </ExampleSection>
      <Paragraph>Bottom-up ERP Enterprise searches the structure for items that are used in a bill of material at higher
		levels, by means of a where-used process. These items are included in the cost
		calculation process.</Paragraph>
      <Paragraph>Bottom-up means that the
		price of each item is calculated, because of a change in the price of the
		chosen item. The prices of items that are on a lower level in the BOM are not
		calculated, but are read in the <GUIRef href="/baanerp/ti/cpr/ticpr2505m000" role="session">Item - Cost Price Details (ticpr2505m000)</GUIRef> session.</Paragraph>
      <ExampleSection>
         <SectionTitle>Example</SectionTitle>
         <Paragraph>When the price of item
		  B in the above figure is calculated, the price of items A and C will also be
		  calculated.</Paragraph>
      </ExampleSection>
   </GeneralSection>
</ManualTopic>