The Rate Bill — Capturing Commonality

3C next computes an RBILL, or rate bill, based on the TOP. 3C developers refer to the RBILL as the most innovative element introduced by the 3C theory. The RBILL describes how material will be consumed in the supply chain and captures the benefits of commonality of raw materials used in end products. It works backward from end products through the bill of material (BOM) to calculate the consumption of each component in the supply chain. 

Our case is simple because both A and B use the same raw material and the constraint is not physical but is the sales level. So, the RBILL for Item 1 is the sum of the requirements from SKUs A and B (Table 33.2). 

Note that the RBILL is the maximum amount of Item 1 that can be consumed daily. Note also that we have separated Item 1 manufacturing from the end product. If there were more SKUs requiring Item 1, these would be added until a capacity limit elsewhere, such as Packaging, was reached. 

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