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Inventory Costing Setup (ICOS) |
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Sun Documentation -
Inventory Management
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Inventory Costing Setup provides additional functionality within the Inventory module which includes being able to set the following parameters- The stage at which latest and weighted average costs can be updated.
- Whether costs are kept in all currencies set up for the Business Unit.
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The most recent Actual Cost. This appears as an Item Cost and may be an Issue Cost if there are no allocations.
Weighted Average Cost (WAV)
The average cost calculated on receipts by taking the existing quantity in the inventory, that is, unissued stock, multiplied by the existing weighted average cost from the item record. The incoming quantity is then multiplied by its actual unit cost. These two values are totalled. The existing quantity balance is then taken plus the incoming quantity. The total value is then divided by the total quantity.
That is:
[ (QTY1 x COST1) + (QTY2 x COST2) ] / QTY1 + QTY2
Where :
QTY1 = existing quantity currently in inventory, that is, unissued stock
COST1 = existing Weighted Average Cost from the item record
QTY2 = incoming quantity
COST2 = incoming actual unit cost
Note: In order to avoid negative average cost problems, if the inventory quantity used to calculate WAV is negative, WAV is set to the same value as Latest Actual Cost which is set as normal.
If movement costs are updated online or via a batch process.
Note: Only one Inventory Costing Setup can be defined per Business Unit.
To define the way costing is carried out in the Inventory module, use Inventory Costing Setup (ICOS) which contains the following fields:
Click here to see the screenshot
Purchase Earliest Latest Cost
Earliest purchasing stage that can be used to update the latest actual cost of an item.
Purch Earliest Wghtd Avg Cost
Earliest purchasing stage that can be used to calculate and update the weighted average cost of an item.
Movement Earliest Latest Cost
Earliest movement stage that can be used to update the latest actual cost of an item.
Mvmt Earliest Wtd Avg Cost
Earliest movement stage that can be used to calculate and update the weighted average cost of an item.
Earliest Stage for Service LAT
Earliest purchasing stage that can be used to update the latest actual cost of a service item.
Earliest Stage for Service WAV
Earliest purchasing stage that can be be used to calculate and update the weighted average cost of a service item.
Mvmt Earliest Svc Latest Cost
Earliest movement stage that can be used to update the latest actual cost of a service item.
Mvmt Earliest Svc Wtd Avg Cost
Earliest movement stage that can be be used to calculate and update the weighted average cost of a service item.
Multi-Currency
Indicates how costs will be kept in terms of the currencies set up in a multi-currency Business Unit. See Introducing the Multi-Currency Functionality for more information on the following options:
Base Currency Only Base and Reporting Currencies Only Maintain Costs in all Currencies (Base, Reporting and Transaction).
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Reserved for future development.
Defined Avg Time Frame Unit
Reserved for future development.
Defined Average Future Only
Reserved for future development.
Cleardown Delay
Information on transactions that have failed during the costing processing run are kept on the costing work tables. This field shows the number of days this information is kept for, before being deleted.
Freeze Standard Costs
If this box is checked, the updating of standard costs is not allowed.
Run Movement Costs Online
If this box is checked, all inventory costs are calculated at the same time as the recalculation of the item costs as part of the online transaction. This is usually set where little or no use is made of Analysis Costing or Landed Costs. If this box is not checked, the item costs are calculated in the same way but the inventory costs are calculated in the background without you having to wait.
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