A manufactured item can be treated as a purchased item for master scheduling and cost-rollup purposes. The typical situations include a purchased item that is occasionally manufactured or a manufactured item which has switched to being a primarily purchased item. The item will initially be designated as a manufactured item in order to define bill of material and route information, and to support production orders for the item.
The item cost record can be calculated for the manufactured item, but it may not match the standard cost that you want for purchasing purposes. The standard cost that you want must be manually entered and activated for the item cost record. In addition, a manufactured item at one site may be transferred to another site, so that the item's cost must be manually entered and activated for the transfer site.
When you use the manufactured item as a component in higher-level products, the component's costs should be treated as a purchased item whether they were calculated or manually entered. That is, a BOM calculation should treat the item's costs as a purchased component, rather than calculating costs that are based on its bill and route information. You can prevent this calculation by selecting the stop explosion flag that is embedded in the BOM calculation group that is assigned to the item.
Prevent master scheduling calculations from exploding requirements through the item by selecting the stop explosion flag (for item coverage) for the item. The master scheduling calculation will treat the item as a purchased item (such as recommending planned purchase orders) and will not perform further calculations for its bill and route information.