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Profitability for level 2 WBS elements

Hi Experts,

I am new to the blog and starting with a requirement. Please help me with your expertise.

Consider the scanario where car is manufactured.

In that design there are 4 wbs elements created.

1) Engine

2) Body

3) Seats

4) Tyres

There is no dependency of any of the WBS elements to start my project and

each of the WBS will start independently( start to start in PS terminology)

But my sale order will be created on car.

Billing Element will be checked for level 1 WBS element which is CAR and

sale order will be created and mile stones will be triggered to get the revenue.

After a month I have posted few costs and when I execute RA it will show me

some profit based on costs I have planned and spent.(Considering that we follow

cost based POC for result analysis)

It will show my revenue recognization on level 1 WBS element only.

But here the scenario is while running RA they want to see the profitability

on each ane every WBS.

Assume I have triggered a milestone by which 20% of the work is done

I have done 10% on engine, 5% on Body, 2% on seats and 3% on tyres and now I

want to see the profitability made on all engine, body, seats and tyres.

But revenuw will be triggered on CAR only.

Ideally they want to see if Body is turning loss or Tyres are turning loss or

engine is turning loss or seats is turning loss on the month only and they want

to correct it.

In plane statement Revenue will be triggered using level 1 WBS element using milestone

and they want to see profitability on below 4 level 2 WBS elements.

Can you please suggest me the best solution.

Thanks for your help in advance.

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1 Answer

  • Best Answer
    Oct 13, 2015 at 08:31 AM

    Hi Srinivasa,

    Best solution in your case create lowest level of WBS as billing element . Assign this Level WBS's in Sales order items. Then you check profitability at all level's of WBS. And you need to make sure cost is booked to only lowest level WBS.

    Thanking you


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