Transport Location to Destination Back loading
In the real world a Profit centre can run low on product hence it might choose to out source the product from either another Profit centre or another entity, (being a site or location entirely) and so based on this business requirement; Location Management is an essential toolset for the success of daily operations. Back loading is an internal term (commonly meaning between internal Profit centres) used when replenishing (via out sourcing) product from another Profit centre, entity or Location.
The Profit centre is back loading (out sourcing) and in this example;
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The Profit centre is BCD Quarries and so is the Customer.
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The Sand is purchased from the Rock Shop at a cost of $5.50 and because its being (back loaded, therefore transported and) sold to the Profit centre the price is also $5.50.
1. Location Rock Shop with a (rock type) product of Sand, price and cost setup (pictured left, below)
3. Location BCD Quarries with a Sand, price and cost setup (below) now has Sand available for Pre-Entry, Entry and Exit transactions.
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The cost of sand to the Profit Centre is both the sand and transport price combined where under normal circumstances the product cost is the average cost to manufacture.
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We have set (above) a Price by Location (List Price) for Sand of $14.00 per tonne concluding Sand being unprofitable and expensive for customers, more often than not this is the reality of out sourcing product but in order to fulfill contract obligation sometimes a necessity where commonly the Profit centre will absorb such additional costs and maintain existing Customer special pricing if applicable.
4. Resulting in the following Onsite transaction (below, left).