Inventory Cost

How do I change our inventory to work on average cost vs. last purchase?

Hi Pat,

I actually had this same question yesterday. For detailed info. on how this works (which I could not find anywhere else on Cetec documentation), go to any Part Record screen and hover over “Last Buy Cost”
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If your part record screens show Last Buy Cost, obviously you are using Last Purchase cost. If it shows Average Cost, then you are using Average Costing. I believe this has to do with LIFO vs. FIFO logic in your environment.

The config setting to change this is “cost_use_last_buy_cost”. 1 = last buy cost, 0 = average cost. This is a global configuration setting for the cost engine. If you click into the explanation for Last Buy cost / Average Cost, there is really good documentation in there that explains this.

I hope this helps.

During our transition training and support I was under the impression that if i used the average cost that our inventory would be looked at as just one location.

We currently use “last buy”. This causes us to have new bin locations each time we receive parts ( example 100-A, 100-AA-1, 100-A-2 and so on.

I want just one inventory location regardless of when the parts were received or what p.o. they came in on. Will “average cost” provide this? What are the guidelines for determining the average cost?

thank you,

Pat

Can I get some feedback on this topic?

thank you,

Pat

Please review my follow-up question.

thank you,

Pat

Can I please get a response to my last question?

thank you,

Pat

Hi @patg,

Using average cost vs. fifo will not affect your bin locations or your warehouses.

If I’m understanding your issue correctly, your concern is which bin your inventory is put away to, is that correct?

The reason the system defaults to creating “NEW” and “…-###” bins is because having a discreet bin per receipt is crucial to maintaining proper traceability of inventory as it move through the system to ultimately be shipped out as part of a build to your customers.

If you’re not concerned about maintaining that traceability, there is a config setting that will force all inventory for a given part to be put away into the “Primary Bin” of the warehouse location when it’s received. The setting is called “Auto Put Away Stock At Receipt” but please be aware that, as the description of that setting says “This will DESTROY TRACEABILITY and merge Bin Costs and is not recommended!”

Please let us know if you have any additional questions about this.

Thanks!

Ok thanks for the info. Also would like to know the guidelines the systems uses to determine the average cost. Could not find this in the system. Is it based on so many purchases over a specific amount of time?

Thank you,

Pat

If you click the link for “Avg Cost” from any part record, it will bring this page up in a popup window: Costing & Pricing

That information should help clarify where the various values you see originate and/or are calculated.

ok, thank you.

Consider this complete.

Pat