Weighted Average

@EvaStrandberg Weighted Average (WA) is calculated considering the available stock. The concept behind this approach is to determine the average cost of a part in the inventory. When there is a new receipt, WA for the specific part is recalculated.

The calculation goes as:

c = cost of received good
n = available units in the inventory at the time of the receipt

WAi = c/n

When there is a new receipt for m number of parts, WA is recalculated

WA = { [WAi * n ] + [cost of the goods received] } / {n+m}

So when the inventory is cleared for a specific part, the WA of a part at the first receipt would be equal to unit price of the Purchase Order for the specific part, if the part is purchased.

Hope this helps !

@Ushan Senarath - your doc doesn’t work for me I’m afraid

Linda

Thanks, @Buddhika Kurera !