MTS #06D –Box Rate Based Landed Costs Setup

Purpose:

To define the sequence of actions needed to establish Vendor Box Rate based landed costs for Purchase Orders.

Keywords:

• Box Rates – Box Rates represent all of the shipping costs associated with getting the box to you.  These costs can include: box charges, freight, customs duties, ground transportation, etc.
• Full Box Equivalent – THIS DOES NOT APPLY TO BOX RATES.
• Unit of Measure – a standard unit to describe a box size or units such as an each, a bunch or a stem.

• Country/Region – is a field in the Vendor table that represents an area from where products are shipped.

Overview:

A Vendor/Farm identifies how to calculate Landed Costs when Purchase Orders are created.

Box Rate based Landed Costs are typically established by Country/Region.  For example, the country Colombia would breakdown transportation costs by Region for Bogota and separately for Medellin due to the cost based on location.

When using Box Rates for the State of California it can be sub-divided into zones, such as, Northern California, Central California and Southern California.

Setting up Box Rates to calculate Landed Costs on Purchase Orders includes:

• Defining Country/Region
• Identify Units of Measure to include in this process
• Setting a Box Rate for each Country/Region
• Assigning Country/Region to respective Vendors
• Setting Vendors to calculate Landed Costs by Box Rates

Procedures:

1.       Determine the Country/Region that you want to establish box rates to determine Landed Costs.

2.       Determine your average Landed Cost per box size (Unit of Measure) for:

          A.      Full Box

          B.      Half Box

          C.      Quarter Box

          D       Eighth Box

          E.      etc.

3.       Make sure you have the Box Size defined in the Unit of Measure table which is found on the INVENTORY Menu:

There are 3 required parameters:

• Unit of Measure Code (up to 3 characters)
• Unit of Measure Description
• Box Type (general category, for example HB=half box) this is required for this entry to show on the Country Box Rates table (see #5 below)

Since the Unit of Measure Code is up to 3 characters and you may have more than one box type, for example HB (half box) can use the third character of the code to make it unique.  For example, if you have 3 types of half boxes you can define them as:

• EHB (Ecuador half box regular)
• EHS (Ecuador half box small)
• EHL (Ecuador half box large)

1. Establish Country/Region Table which can be found on the MANAGEMENT Menu.  The Country/Region Table Maintenance looks like this:

Enter the Country/Region Code and the Name of the area.  To remove an entry, highlight the first column and press the delete key on your keyboard.

1. Select the Vendor View and sort by Country/Region to get all of your vendors for the Country/Region you are working with in one place.

1. Select Vendors for the Country/Region you are working with and make sure the correct “Country/Region” is displayed.  If not, use the drop down menu to select the correct Country/Region for this vendor.

7. Select the Purchase Info tab and change the Shipping Calculation Type to “Box Rate” (near the bottom of the screen below):

8. Click MODIFY to save this information.

9. On the MANAGEMENT Menu, select Country/Region Box Rates and the following screen will be displayed: 

              

10. Select the Country/Region that you are working with and enter your Box Rates that will be used to calculate Landed Costs for this Vendor’s purchase orders.  Press enter to SAVE.

1. When your entries are saved you can update vendors for the selected Country/Region by pressing the “Update Vendors” button.  If you do not want to update an existing Vendor Box Rate, click “Do not overwrite existing Vendor box rates.” This update process will match the Vendor Table Country/Region with the Country/Region in this Box Rates Table.
2. You can verify the Vendor’s Box Rate for the Country/Region you are working with by selecting a Vendor:
3. The following is an example of how the Box Rates work with an Ecuadorian Vendor:

   The Box Rate shows the Base Freight Cost at $12.75 for a QB (quarter box) which is set for the vendor:

In the purchase order you can add the Surcharge percent for product like Roses:

You can also add Other Vendor Charges to match with the Vendors Invoice.

See the result in the screen below:

• The Other Vendor Charges of 1.07 are entered and reflexed properly. 
• The Surcharge of $3.375 is calculated correctly based on the 7.5% entered. 
• The total Freight Cost of $17.195 is correct.