Production Management with Real FIFO Cost Calculation
Stop estimating production costs. Loribase tracks every consumed batch, calculates real FIFO costs automatically, and gives you an accurate cost for every finished unit, including materials, labor, energy, and depreciation.
Production Management
The true cost of estimated production costs
Most businesses know their production costs are approximations. Raw material prices change with every purchase. Labor hours vary by batch size. Energy consumption fluctuates. A standard cost set six months ago may no longer reflect today's reality, but everyone is pricing and planning as if it does.
The practical consequences are real: underpriced products that erode margin, overpriced products that lose customers, purchase decisions based on stock levels that do not account for what is already reserved in open work orders, and no way to compare the actual cost of two production runs of the same product on different months.
These are not edge cases. They are the daily operating reality for any manufacturer without a proper production management system.
Loribase solves this by treating every production run as a series of inventory events, deriving the real cost from those events automatically with no estimation.
Blueprints
Reusable production blueprints
Every product you manufacture starts with a blueprint (also known as a bill of materials or recipe). A blueprint in Loribase defines the inputs (which materials, in what quantities and units) and the expected output. Blueprints are reusable: create once, use for every production run of that product.
Flexible yield definitions
Define output by fixed quantity, percentage yield, or container-fill logic. Loribase handles the conversion automatically.
Version control for recipes
When a formula changes, update the blueprint. Previous production runs retain their historical record; new runs use the updated specifications.
Multi-level bill of materials
Blueprints can reference semi-finished goods that themselves have blueprints. Loribase handles the full depth chain in a single production order.
Scale by batch size
Define quantities for a standard batch. When you run twice the batch, the system scales all component requirements proportionally and tracks the actual consumption.
How It Works
How real FIFO costing works in Loribase
Each purchase batch keeps its own cost
When raw materials arrive, the purchase event records the exact unit cost for that batch. 100 kg of cocoa butter at $18.40/kg on January 10th is a distinct lot from 100 kg at $19.20/kg on March 5th. Both are in your warehouse, but with different costs.
Production consumes the oldest batch first
When a production run starts, Loribase allocates the oldest available batches first (First-In, First-Out). If one batch is fully consumed and more material is needed, the next-oldest batch is consumed. The split is exact: the system never rounds or averages.
Cost is calculated from actual consumption
At the end of the production run, the system knows exactly which batches were consumed, how much from each, and at what unit price. The production cost is the sum of those actual values, not a standard cost from a spreadsheet.
Additional costs are added and allocated
Beyond raw materials, you can configure additional cost components: labor hours at a defined rate, energy consumption, equipment depreciation per hour. These are added to arrive at the total production cost per unit.
Costs
Full production cost breakdown
For every completed production run, Loribase provides a detailed cost statement:
Raw material cost (FIFO)
Sum of all consumed batches × their actual purchase price
Labor cost
Configured hourly rate × production hours logged
Energy cost
Energy rate × consumption recorded (or estimated by batch size)
Depreciation
Equipment depreciation per production hour, allocated to the batch
Total cost per unit
Sum of all components ÷ units produced = exact cost per unit of finished good
Suggested selling price
Total cost per unit × (1 + target margin %) = price that preserves your margin
Integration
Connected to inventory in real time
Production management in Loribase is not a separate module. It is built on top of the same event-driven inventory foundation. When you start a production:
Raw materials are automatically reserved (they cannot be double-allocated to another order)
Available stock for each component decreases immediately
When production completes, consumption events are recorded for each input batch
Finished goods are added to inventory as a new lot, with the calculated cost as its unit cost
The new lot is immediately available for sale or for use as input in another production
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