Summary Box:

Shows a Total cost per Kg and a Total cost per unit summary. Please reference 3.4 Cost Model Set Up – Cost File and Price File (Page 25) for a description on Fixed and Variable Costs.


Variance from cost recovery is the Difference between the total cost and the Fixed / Variable cost total giving you an indication on whether you need to increase or decrease your prices


8 Key Steps: these are the 8 sequential steps you need to take to run the cost model

Step 1:    Expand model – this opens the model so all ‘Mother’ cuts are visible. These are cuts which are created from the initial cutting of the carcass and have a yield associated, which represents the % in which they are, to the entire carcase.


Note: The ‘% of scenario’ column shows an even split of %’s to create 100% of the mother. The explanation for doing this is because we must have the same amount of volume generated against the individual daughter yields to ensure there is the same kg’s multiplied against the yields to give a legitimate value.

a.   In the above image you can see a yielded price. The Yielded Price is the price that the ‘Daughter Product’ returns the ‘Mother Product’ to when the total value of the Daughter Product and the offcuts that makes it up are included. Below is an example of the calculation performed to create a yielded price


Step 2: Calculate Top Level Prices – This Pulls the Yielded Value from the Daughter product up to the Top Level ‘Mother’ code 

Step 3: Collapse Model – This Collapses the Model to show the volumes at the Top-Level Mother Product level. The reason for Collapsing is so you can easily view and ensure each line has populated correctly as shown below.

Note: What you will notice at this stage is whether the market prices are over/under recovering on the cost. In this example you can see it is over recovering as the “Variance from cost recovery” is + £53.56


Step 4: Balance Primary Model – this will now automatically bring the recovery back to match the total cost. It does this based on the Variable %’s which you can see by clicking on the ‘(i)’ icon circled in red below: 

Step 5: Expand Model – by expanding the model again at this stage it is allowing you to visibly see all Prices allocated to Offcut parent articles which are generated from the Mother. These will have the adjusted prices where applicable

Step 6: Calculate Top Level Prices – In the instance where the Yield Value has not pulled into the top-level mother code - the system will recognise the zero value and present the correct value at this point. 

Step 7: Balance Child Products - This step is where the ‘New’ yielded prices are then populated into the daughter products to create a new purchasing price where applicable. This is essentially working the Yielded price calculation from step 1 in reverse

NOTE: As you can see from the above – the Yielded prices have now been replicated to the same values as the Mother Pricing, which has auto populated prices for each of the daughters situated below based on their yields and offcut values


Step 8: Export Prices – Now that ALL line items have a price value, you can now export these to the company “price file” in which you wish to use for pricing moving forward.