We have a scenario where goods have been produced and delivered to stock, but later some defect is discovered in the manufactured product.
Production order for the job is closed and all the variances have been settled.
Please provide suggestions in regard to:
1. What is the best business practice for this kind of scenario? I think it is quiet a common thing in discrete industry.
2. We want to capture the costs of repair separetely but require a report to link with the material repaired.
3. What's the normal practice for bearing these costs. Since the rework is done at post production stage, we cannot say that it was production's fault and should have impact on production variances. And if cost centre is going to bear the costs, how can we link a production order to a cost centre (I'm not expecting Production people to enter a cost centre in settlement rules).
4. Is Repair order a better solution as compared to production order?
Please reply at the earliest.