What's new in Microsoft Dynamics AX 2012 R2 – Attribute based pricing and batch balancing

In Microsoft Dynamics AX 2012 R2 we introduce the batch balancing and attribute based pricing features that are used with potency management. Batch balancing feature enables you to modify a production formula by selecting the inventory batches of the active ingredients based on their current potency. Attribute based pricing is applied to the pricing of a potency item.

As the potency of an active ingredient can differ per batch, the quantities of active, compensating, and filler ingredients for a batch order need to be balanced to accommodate the amount of material that is required for production. This also means that after a batch order is created for a formula that includes an active ingredient, the picking list journal cannot be automatically created and posted. The batches of inventory that are selected for the required active ingredient must be picked before the batch order can proceed. This is performed by using the batch balancing function of the batch order. After inventory is reserved for the active ingredients, the balanced quantity for the compensating ingredients can be calculated. To determine the balanced quantity of the compensating ingredient, the following formula is used:

These calculations are part of the batch balancing function in Microsoft Dynamics AX 2012 R2 .

Attribute based pricing is applied to the pricing of a potency item which is an item that has a concentration of an active ingredient. This potency, or concentration, of active ingredient can be used to affect the amount of material that is required in production or the amount that is paid to a vendor based on the concentration level.

To calculate batch attribute pricing, take the purchase price and divide it by the batch attribute target to get a price per unit at 100% concentration. Then multiply by the batch attribute actual value. For example, a potency item has a price of $55.00 per lb. at a standard/target potency of 40%. If a batch of inventory of this item is received, and it is determined to have an actual potency of 46%, the price per lb. is (($55.00/40) * 46) $63.25. This is a higher price than the standard price that is paid for this material, because the active ingredient concentration of the material is higher and therefore, you use less than the normal quantity in production.