How is it possible that a inventory part purchase with price 100 and inventory cost shows 1000?
the only transactions happening were transport of stock between locations in the Site.
Different inventory cost and purchase price
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Userlevel 5
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Hi FPayab,
In which window are you referring to the inventory cost? can you please elaborate on your issue?
Userlevel 3
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Hi Infaz,
In the Inventory Part > Costs
The price for the inventory part in PO is different than the inventory cost in the inventory part after PO receipt.
Userlevel 3
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Landed Cost on PO
Unit Cost in Inventory
The Unit Cost in inventory is not solely set by the receipt of a PO. Maybe initially if no cost is set, but not always for subsequent receipts. Is this for a Standard Cost site or a Weighted Average Cost site? If Standard Cost, what is the Standard Cost set to for the receiving site? What does the Inventory Transaction History indicate for the cost received for the transaction?
I think we need more information about your problem to provide an answer.
Userlevel 5
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Hi,
Userlevel 3
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The Unit Cost in inventory is not solely set by the receipt of a PO. Maybe initially if no cost is set, but not always for subsequent receipts. Is this for a Standard Cost site or a Weighted Average Cost site? If Standard Cost, what is the Standard Cost set to for the receiving site? What does the Inventory Transaction History indicate for the cost received for the transaction?
I think we need more information about your problem to provide an answer.
The part is set as weighted average and the inventory transaction shows the 56000 (second screenshot). the inventory transaction trend shows that everytime PO is received the Pur price is set as the new inventory cost but in this case the cost went high above compared to the pur price (37000).
OK, Weighted Average then, the cost will change each receipt to match the PO if the quantity on hand was zero at the time of receipt. Does the price for this item fluctuate significantly from receipt to receipt? The only way I would know to analyze this is go back to the last time that inventory crossed through zero on hand, then check each receipt and delivery to make sure that something else hasn’t happened along the way. In my experience, the average costing mechanism in IFS always works as expected, it is actually humans or other system changes that cause it to go awry. Without the full data set or recent history, I’m not sure how to help find the problem, but I’m sure it will be in the data.
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Yes i understand the WA inventory valuation but in this case it seems quite different.
qty on hand before PO receipt = 103
Inventory value before PO receipt = 36005
PO receipt qty = 452 @ pur price 37000
inventory value updated to = 56000
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The data trend for last 2 months seems valid except the last PO receipt which has the different “landed Cost” and “Inventory Cost”. Not sure why?
But in the mean time, in order to fix the Cost of the Part, what should be be the work around, change the cost in inventory part for the specific part?
Userlevel 3
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OK, Weighted Average then, the cost will change each receipt to match the PO if the quantity on hand was zero at the time of receipt. Does the price for this item fluctuate significantly from receipt to receipt? The only way I would know to analyze this is go back to the last time that inventory crossed through zero on hand, then check each receipt and delivery to make sure that something else hasn’t happened along the way. In my experience, the average costing mechanism in IFS always works as expected, it is actually humans or other system changes that cause it to go awry. Without the full data set or recent history, I’m not sure how to help find the problem, but I’m sure it will be in the data.
There is a price variance posting in the supplier invoice. The exact amount (19000 which is 56000-37000) is under price variance. this mean the inventory transferred with a price variance, which is again strange.
Yes, if there is a variance, then the part doesn’t seem to be transferred as weighted average. Have you double checked the inventory part settings for this part? It is possible to have some parts set incorrectly and working as standard cost or FIFO or LIFO for whatever reason.
Userlevel 3
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Yes, if there is a variance, then the part doesn’t seem to be transferred as weighted average. Have you double checked the inventory part settings for this part? It is possible to have some parts set incorrectly and working as standard cost or FIFO or LIFO for whatever reason.
Yes, some other parts were set as Standard Cost but not this part.
OK, then the final thing I can think to check is the supplier invoice...if it has been invoiced and the part is set for the price to be updated on the invoice processing, maybe it was changed at the point of invoicing and not the value at receipt.
Userlevel 3
+9
OK, then the final thing I can think to check is the supplier invoice...if it has been invoiced and the part is set for the price to be updated on the invoice processing, maybe it was changed at the point of invoicing and not the value at receipt.
Checked. The part is set as “Supplier Invoice Consideration = Ignore Invoice Price “ which means it will not consider the Supp invoice price. But the problem cannot be in the invoicing stage, the variance create in the Posting is sourced from inventory transaction/ PO Receipt/Move into Stock, and the question is why the inventory value did not calculate the inventory value of the stock using the PO price (37000).
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