Average Cost Calc.Type

chang_yi

Hi,

Does anyone comment or help on this ?

My client has been setup the "average cost cal. type" by item only. As we know that system not blocking us to create multiple locations eventhough "average cost cal. type" has been setup to only item, we still able to view the average cost by location. However, system sometime may give some unexplainable cost if average cost by location to be viewed. That is why system provide another option where it can set the "Average Cost Calc. Type" by item, location & variant.

However, if we use the principle of average cost by item only, should the system gives us the same average cost for all locations ? (where sometimes, system does gives huge variances of average cost for all locations)

If the option of "Average Cost Calc. Type" by item,location & variant been selected, then how do we ensure that which option to choose will caused the system to calculate the same average cost applied to all locations ? :roll:

Thanks.

Alex_Chow

If your average cost is the same for all locations, the way you would calculate the cost per location is by getting the remaining quantity for the location multiplied by the item's average cost.

Unfortunately, using location filters when your average cost cal. type is by item only will give you strange average cost per location.

chang_yi

Yes, agreed. The system do gives a very strange average cost if just taking the remaining qty filter per location and divided by the Cost amount. This is what I am facing the difficulty at this moment. ](*,) So does it mean that system in calculate average cost by item only is incorrect if filter by location,or it should set the "Average cost Cal. Type" to Item, Location & Variant ?

ssingla

Yes. If you want to see the cost on macro level i.e item wise then item option is selected and if on micro level then item,variant,location is selected.

From Macro level , micro results can not be analysed.

Alex_Chow

chang_yi wrote:

Yes, agreed. The system do gives a very strange average cost if just taking the remaining qty filter per location and divided by the Cost amount. This is what I am facing the difficulty at this moment. ](*,) So does it mean that system in calculate average cost by item only is incorrect if filter by location,or it should set the "Average cost Cal. Type" to Item, Location & Variant ?

I'd recommend setting the Average cost Cal. Type to Item, Location & Variant. This will save you a lot of grief down the road.

When the Average cost Cal. Type is set to Item, Location & Variant, you can still get the average cost on the item level. The advantage is also that when you trying to get cost for a particular location, it won't give you wierd numbers.

Soloper

A question about this topic;

Are the adjusting durations different for these two options? Can anoyone say that "Adjusting with "ITEM" option is shorter than the other one"?

Thanks.