💰 Cost Configuration

Manage labor costs, overtime rates, and production expenses

ℹ️ About Cost Configuration
Configure all costs used for Impact Analysis calculations.

🏭Production Line Hourly Rates

Line Code	Line Name	Regular Hourly Rate ($) ℹ️ 💡 Regular Hourly Rate This is the TOTAL hourly cost for running this production line. 📊 INCLUDES: • Labor costs (all workers) • Electricity & utilities • Operating costs 💰 EXAMPLE: 5 workers × $15 + $25 overhead = `$100/hour`	Overtime Multiplier ℹ️ 💡 Overtime Multiplier Applied to regular rate for overtime. `1.5x` = 150% of regular rate Example: $100 × 1.5 = `$150/hour`	Weekend Multiplier ℹ️ 💡 Weekend Multiplier Extra pay for weekends. Saturday: `1.5x` Sunday: `2.0x` (double time)	Actions
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⏰Overtime & Weekend Configuration

Regular Working Hours Per Day

Standard: 8 hours/day

hours

Maximum Overtime Hours Per Day

Standard: 4 hours/day maximum

hours

Overtime Rate Multiplier

1.5x = Time-and-a-half (150%)

Saturday Rate Multiplier

Sunday Rate Multiplier

Holiday Rate Multiplier

👷Temporary Worker Suppliers

Add New Supplier

Supplier Name

Daily Rate Per Worker ($)

Notice Period (Days)

Contact Person

Phone

Supplier Name	Daily Rate ($)	Notice Period	Contact	Phone	Status	Actions
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⚙️General Cost Settings

Currency

Default Notice Period (Days)

Cost Display Precision

📖 Cost Configuration User Manual

📑 Table of Contents

1. Overview & Purpose 2. Production Line Costs Explained 3. Overtime & Weekend Rates 4. Working on Holidays 5. Temporary Workers Management 6. Real-World Examples

1. Overview & Purpose

What is Cost Configuration?

Cost Configuration allows you to set up all cost-related parameters used by the Impact Analysis system to calculate the financial implications of scheduling decisions.

Why is it Important?

When you need to reschedule an order, the system needs to:

Calculate costs of different solutions (overtime vs weekend work)
Compare temporary worker options
Evaluate financial impact of delays
Help you make informed, cost-effective decisions

⚠️ Important: Without accurate cost configuration, Impact Analysis calculations would be meaningless. Take time to configure costs accurately based on your actual operational expenses.

2. Production Line Costs Explained

Understanding Regular Hourly Rate

IMPORTANT: This is the TOTAL hourly cost for running the production line, NOT per person!

What's Included?

The hourly rate should include ALL costs to run the line:

Labor Costs: All operators, supervisors (allocated), support staff
Direct Costs: Electricity, machine wear & tear, consumables
Overhead: Facility costs, insurance, depreciation

📊 Calculation Example: Canning Line

Labor:
• 5 machine operators @ $15/hour = $75
• 1 supervisor (20% allocation) = $6
• 1 QC inspector (shared, 10%) = $3
Total Labor: $84/hour

Direct Costs:
• Electricity (machine consumption) = $12
• Machine maintenance allocation = $5
• Consumables = $3
Total Direct: $20/hour

Overhead:
• Facility costs allocated = $8
• Insurance & admin = $3
Total Overhead: $11/hour

TOTAL HOURLY RATE: $115/hour

Alternative Calculation Method

You can also use historical average:

📊 Historical Average Method

Review last quarter's production:
• Total production costs: $450,000
• Total production hours: 4,000 hours
• Average rate: $450,000 ÷ 4,000 = $112.50/hour

3. Overtime & Weekend Rates

Overtime Rate Multiplier

The multiplier determines how much extra you pay for overtime hours.

📊 Understanding Multipliers

1.5x (Time-and-a-half):
If regular rate is $100/hour
Overtime = $100 × 1.5 = $150/hour

2.0x (Double time):
If regular rate is $100/hour
Double time = $100 × 2.0 = $200/hour

Complete Day Example

📊 12-Hour Production Day

Regular Rate: $100/hour
Overtime Multiplier: 1.5x

Regular Hours (8 hours):
8 × $100 = $800

Overtime Hours (4 hours):
4 × $100 × 1.5 = $600

Total Cost: $1,400
Extra Cost: $600 (75% more than regular day)

Weekend Work Rates

Different rates for Saturday vs Sunday work:

Saturday: Usually 1.5x (same as overtime) - Less expensive
Sunday: Usually 2.0x (double time) - Significantly more expensive
Holidays: Usually 2.5x or higher - Very expensive, last resort

📊 Weekend Cost Comparison

Need 8 extra hours of production:

Option A: Saturday Work
8 hours × $100 × 1.5 = $1,200

Option B: Sunday Work
8 hours × $100 × 2.0 = $1,600

Cost Difference: $400 more for Sunday
Recommendation: Use Saturday if possible

4. Working on Holidays

Integration with Special Days

The Cost Configuration works with the "Manage Special Days" page to handle holiday work.

Normal Holidays (No Work)

System automatically skips these days
No cost calculations needed
Examples: New Year, Independence Day, Christmas

Working on Specific Holidays

Sometimes you need to work on a holiday due to urgent orders:

📊 Step-by-Step: Working on December 25

Step 1: Go to "Manage Special Days" page

Step 2: Find December 25 (Christmas)

Step 3: Mark as "Working Day"

Step 4: System notes: "Working holiday - 2.5x rate"

Cost Calculation:
8 hours × $100 × 2.5 = $2,000
(vs $800 for regular day)

Extra Cost: $1,200 for the holiday

⚠️ Important: The holiday multiplier only applies when the day is specifically marked as a working day in "Manage Special Days". Regular holidays remain as non-working days unless explicitly changed.

5. Temporary Workers Management

Why Multiple Suppliers?

Compare rates and get best prices
Have backup if one supplier can't deliver
Different specializations (skilled vs basic labor)
Handle seasonal demand variations

Daily Rate Calculation

The daily rate should include:

Worker wage for 8 hours
Supplier's service fee
Insurance and compliance costs

📊 Supplier Comparison Example

Supplier A: $150/day
• Experienced workers
• 2 days notice required
• Good reliability record

Supplier B: $120/day
• Basic training level
• 5 days notice required
• Variable quality

Supplier C: $180/day
• Highly skilled workers
• Same day availability
• Premium service

When to Use Temporary Workers

✅ Good For:

Sudden demand spikes
Seasonal peaks
Emergency situations
Short-term needs (< 2 weeks)

❌ Not Good For:

Regular production
Quality-critical operations
Long-term needs
Complex procedures

6. Real-World Examples

Example 1: Rush Order - 16 Extra Hours Needed

📊 Scenario:

Customer needs urgent order, requires 16 extra production hours

Option A: Overtime (4 hours/day for 4 days)
4 days × 4 hours × $100 × 1.5 = $2,400
Time: 4 days
Impact: Worker fatigue

Option B: Saturday Work
2 Saturdays × 8 hours × $100 × 1.5 = $2,400
Time: 2 weekends
Impact: Fresh workers, no fatigue

Option C: Temporary Workers
2 workers × 4 days × $150 = $1,200
Time: 4 days
Impact: Quality risk, training needed

Decision: Option B (Saturday) - same cost as overtime but workers stay fresh

Example 2: Emergency Order - 24 Hours Needed

📊 Scenario:

Critical customer order, need 24 extra hours ASAP

Option A: Overtime Only
6 days × 4 hours × $100 × 1.5 = $3,600
Time: 6 days
Risk: High fatigue, quality issues

Option B: Weekend + Overtime
Saturday: 8 hours × $100 × 1.5 = $1,200
Sunday: 8 hours × $100 × 2.0 = $1,600
Overtime: 2 days × 4 hours × $100 × 1.5 = $1,200
Total: $4,000
Time: 4 days (faster)
Risk: Medium

Option C: Temporary Workers + Overtime
3 temp workers × 2 days × $150 = $900
Plus overtime: 2 days × 4 hours × $100 × 1.5 = $1,200
Total: $2,100
Time: 2 days (fastest)
Risk: Quality control needed

Decision: Option C if quality can be managed, otherwise Option A for best quality

Example 3: Cost Comparison Over Time

📊 Monthly Overtime vs Temporary Workers

Scenario: Need 80 extra hours/month consistently

Overtime Approach:
80 hours × $100 × 1.5 = $12,000/month
Pros: Quality consistency, trained staff
Cons: Worker burnout, sustainability issues

Temporary Workers:
2 workers × 20 days × $150 = $6,000/month
Pros: Half the cost, sustainable
Cons: Training time, quality variance

Recommendation: For consistent extra capacity, hiring permanent staff or using temporary workers is more cost-effective than sustained overtime

For questions or support, contact your system administrator