Production Order / WIP gettiing transferred as FG Inventory

s_venkatesh78

Dear Users,

I have the following query.

Right now in Navision, the WIP value gets transferred as FG inventory only if we close the production order and run the adjust cost routine.

But in reality, when the partial output is given the corresponding WIP should get transferred as FG inventory (Credit WIP and Debit FG inventory) even if the production order is in open status.

Is there any setting available for this ? or is it the way Navision works ?

This creates problem during month end.

Example : Production order for item A - 1000 Nos.
I have consumed 1000$ worth of raw materials and 500 $ worth of machine capaicty. Now my WIP is 1500 $. But if i give a partial output of 800 Nos. in the month end, still my WIP is 1500 even though i have given the output.

Can any one help me on this issue ?

Regards,
Venkatesh

darshanm

Namaste!

The only way is to Finish the Prod. Order and run the batch job.
Till the time status of the Prod Order is not Finished it treates
it as a WIP inventory.

ayhan06

it is by design.

think of a production order which has 5 operations on the routing and quantity of 100.. (never mind consumption for now.).. at the month end, you finish 40 of them, but you run the work centers as 80 % of total time relatively.. in this case, system will calculate the cost of 40 quantity as 80 % of total cost, which is not correct.. to keep calculation correct, you must tell the system that you totally finished production order..

s_venkatesh78

Dear Ayhan,

Point 1: I agree with your point.
Point 2 :But still if you see, if my production order spreads over a period between 28th of this month and 5th of the next month and on 30th i have completed 50 % of my production order quantity, at this stage if i dont close my production order my FG will still be at 0 cost where as my WIP will be having all the rawmaterials and capacity which i have consumed which is incorrect right.

Appreciate if you could tell me any workarounds or how the way we can explain this to the customer. When i justify point 1 customer is always referring point 2.

Regards,
Venkatesh

AdamRoue

It is the fact the WIP is for the "order" not the item. You make 2 and at the end of the month you have 1 in stock and 1 in WIP, the 1 in WIP is scrapped, where do the costs then go? You have already costed it by "finishing" it. Whilst I would not advocate this is the way it "should" be done this is how it is done. Ultimatley when you finish the order the system knows what the cost of the produced finished goods are at this point, prior to this it simply does not know, so although you have some in stock, financially the finished cost is unknown until all contributing factors are known, and the finishing of the order is this point as you cannot undo it (another debate as users want to be able to unfinish an order).

Hope this helps you understand although you may not agree!