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 !

Hi @EvaStrandberg 

In addition to the above explanation by Buddhika, you can find additional information by referring to the below help doc link.

It explains all the inventory valuation methods including ‘Weighted Average’

http://clouddocs/ifsdoc/Greenhouse/Documentation/en//MaintainInventory/AboutValuationMethodsAndCostLevels.htm
 

Best regards,

Ushan

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

Linda

@PRODQ You can try the link for the public site, check if the following works?

https://docs.ifs.com/ifsclouddocs/23r2/default.htm?openpage=https://docs.ifs.com/ifsclouddocs/23r2/MaintainInventory/AboutValuationMethodsAndCostLevels.htm

Thanks, @Buddhika Kurera !