Background

As an ERP consultant you have to provide the POC( Proof of Concept) to your client. The main
processes that this client is interested in are:

Procurement
Bill of Material
Manufacturing
Financial Reporting
Automatic Reordering
Stock movements
Sales and distribution
Supplier and customer payments

For the purpose of this POC client has provided you with the data of one of their products. This is
three wheeled trolley for movement of material. Schematic diagram of this product is here:

Name of the Product: Trolley, 3 wheeled

Product is manufactured ONLY and never procured. Selling price is Rs. 12,000 per unit. To
manufacture 1 (ONE) trolley, following BoM is required:

Part No Description Unit QTY Purchase Price (in Rs.) Initial Order Quantity Minimum Quantity Maximum Quantity

112-001 Plywood,12mm,2400x1200 each 1 110 1000 800 1200

111-006 Varnish, Semi Gloss liters 0.05 73 50 40 60
110-001 Side Piece each 2 35.5 2000 1600 2400
105-001 MS Flat 80x8 meter 0.75 28 750 600 900
111-001 Galvanising kg 0.009 18000 20 16 24
102-108 Wheel, with tyre, 100mm each 3 250 3000 2400 3600
100-001 MS Bolt, M10x70, Galv each 3 10 3000 2400 3600
100-002 M10, washer, Galv each 6 2 6000 4800 7200
100-003 M10, Nut, Galv each 9 12.5 9000 7200 10800
100-004 MS Bolt, M10x30, Galv each 3 13.5 3000 2400 3600
100-005 M10 Square Nut each 3 11 3000 2400 3600

Description of the various columns are as follows:

Part No. : Identification part number

 Unit: Unit of measurement of product
Qty: Quantity required to manufacture each Trolley (Finished product)
Purchase price: Purchase price in INR PER UNIT without tax
Initial order Quantity: Initial order that you will place on supplier
Minimum quantity: Minimum quantity that you have to maintain in your stock.(For
automatic reorder calculation)
Maximum quantity: Your stock should not exceed this quantity (for automatic reorder
calculation)

Process

A. MOST IMPORTANT: BEFORE YOU BEGIN, GET A PRINT (PDF) OF YOUR PROFIT AND LOSS
ACCOUNT AND BALANCE SHEET. THIS CAN BE DONE FROM ACCOUNTING MODULE AND
PDF REPORTS SUB MENU.
B. Create products in your product master.
C. Create a new supplier by name: Trolley Supplier Pvt. Ltd.
D. Create BoM as per given data.
E. Procure the quantities as mentioned in column Qty. Take taxes with defaults as per Indian
GAAP. (Supplier as mentioned above)
F. Receive the material in your main stock location
G. Accept the invoice from supplier.
H. Gen invoice from supplier, validate and PAY.
I. Generate manufacturing order for 500 three wheeled Trolleys. (Finished product)
J. Produce these 500 units.
K. After this production, produce another batch of 125 units.
L. Sell 350 of these trolleys to any customer available in your system.
M. Collect the payment from your customer as per list price. (Through bank)
N. Customer finds 10 trolleys defective and sends these back. Accept in your stock and replace
with another 10 units.
O. Process scheduler and generate automatic reorder.

Answer following questions on the basis of processes and transactions mentioned above

1. Take a print of your P&L and B/S now. Compare the previous pdf report and this report.
Calculate profit amnually and justify the results shown. (10 Marks)

P&L now :
Balance sheet now :

P&L before :

Balance Sheet Before :

Current Income=Rs 8564500
Current Expenses=Rs 3597300
Net Profit now= Rs. 4967200
Income before=Rs 4364500
Expense before= Rs, 2053650
Net Profit before=2310850

Hence actual profit=2656350=Net profit before -net profit now

2. What is invoiced order value (including tax) you placed on supplier for raw material
mentioned in point D above? (2 marks)
Your answer here: 1734482.18

3. What is the stock position of all the raw material after step N? (5 marks)
 Stock
Part No Description Unit Position

112-001 Plywood,12mm,2400x1200 each

111-006 Varnish, Semi Gloss liters
110-001 Side Piece each
105-001 MS Flat 80x8 meter
111-001 Galvanising kg
102-108 Wheel, with tyre, 100mm each
100-001 MS Bolt, M10x70, Galv each
100-002 M10, washer, Galv each
100-003 M10, Nut, Galv each
100-004 MS Bolt, M10x30, Galv each
100-005 M10 Square Nut each

4. Reproduce ONLY LAST THREE stock moves including raw material and finished goods for all
the transactions. Your report should have following columns: (10 marks)

5. After Step N, what was the order quantity generated for Varnish? (3 marks)

42 litres was the quantity generated for N+1 th order