We recently discovered that quantities scrapped using INVSCRAP are counted as demand when calculating Averages/Issues receipts and also the auto safety stock calculation. What scrap transaction should be used for scrapping aged, excess or obsolete inventory?
Question
Best transaction for scrapping aged, excess or obsolete inventory
I would recommend creating a Financial Project that allocates the expense to the desired department/business/cost center/account, then use the Issue Inventory Part function to issue the material from inventory rather than scrapping.
It allows more flexibility for allocating the financial expense for the parts whereas Scrapping is a bit more rigid financially.
However, I don’t think either path is going to alleviate your calculation issue because it is always going to be seen as some sort of demand on inventory. From a process standpoint, as part of issuing material that is slow, excess or obsolete, there should also be a review of the safety stock settings for the part, they definitely shouldn’t be set to automatic at that point.
Interesting approach with the financial project. I'm more concerned with inventory management than finance, but I'll pass this idea along to the right people.
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