![]() By contrast, the cost of subcontracted resources is based on the purchase price of the related service. Finally, these resources require their own processes for accounting and cost control.įor internal resources, a fixed cost rate is typically allocated for a period. ![]() When subcontracting operations or activities are used, they affect all stages of operations, from the definition of the operations that are required in production, costing, forecasting, planning, and scheduling, to the management of logistics for materials, semi-finished products, and finished goods. Then the result of the subcontracted operation must be transported either to the location that is allocated to the next operation or to a finished goods warehouse. The vendor might also be able to offer specific resource capabilities or resources at a lower price.ĭepending on the vendor resources that are used in a production process, a route often has additional logistic requirements, because the material and semi-finished products must first be transported to the vendor's site. Typically, vendor resources are used to level periodic excess demand that surpasses the available capacity of a company's own resources. ![]() In production processes, work can be done by resources that are owned or administered by vendors. In other words, it explains how production operations that are allocated to a resource are managed by a vendor. This article explains how subcontracted operations are managed in Dynamics 365 Supply Chain Management.
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