Landed Cost Management (LCM) helps you capture all the costs related to a purchase such as freight, insurance, taxes (country, state, local etc). Landed Cost Management enables you to calculate landed cost of the item, which is taken into consideration for costing and accounting purposes. This helps customers to valuate goods at actual cost and also helps in complying with the country's fiscal/legal requirements.
Receipts with landed cost are supported only for Inventory Items with Shipment destination type Inventory. PO shipments are flagged as LCM. Landed cost support is not available for Consigned and Outsourced assembly receipts. All other PO receipts with in LCM enabled organizations are costed, based on the PO price as it is done in the existing functionality There is no impact of Landed Cost Management calculation on Internal order receipts, RMA receipts LCM integration.
For a PO if the LCM flag (in Inventory) is Y, then the Invoice match option is set to Receipt as per the default option and the destination type on PO Distributions will be set to Inventory; the field is updatable. The LCM Flag Check takes place at the time of Document Approval Submission. For a release, if the LCM Flag is Y then Invoice match option is set to Receipt as per the default option and the destination type on PO Distributions is set to Inventory; the field is updatable. For Landed Cost Management Purchase Orders, the validation takes place only if the invoice match option is set to Receipt and the destination type is Inventory. If not, the submission check will display an error message.
For information on Landed Cost Management's integration with Receiving, please refer to the Receiving chapter, Integration with Landed Cost Management section.
Simulating costs when creating the purchase orders enables buyers to take better sourcing decisions by comparing the overall landed costs including all applicable costs instead of relying on the item price only.
If integration with LCM is enabled, then buyers can request a landed cost estimation calculation for unapproved purchase documents. They can perform the following activities:
Create a standard purchase order, blanket release, or planned purchase order
Simulate landed costs
Review simulated landed cost information for purchasing and firm the best simulation version
For more information on simulating landed cost, refer to the Managing Simulated Landed Cost topic in the Oracle Landed Cost Management Process Guide
Navigating to the Landed Cost Simulations Page from Purchasing:
To simulate charges, the Manage Landed Costs action is available from Buyer Worker Center.
Follow this navigation path: Buyer Work Center > Orders > Create Order.
After creating the purchase order details, select the Manage Landed Costs action and click Go.
The Landed Cost Simulations page appears to simulate costs.
The buyer can also simulate cost when updating a purchase order.