Problem with report "Inventory valuation"

hazem · 2006-12-07

Hello everybody,

Is it possible to have on the "Inventroy valuation report"
Quantity = 0 and
Inventory Value <> 0

Please can anyone explain me this?
THANKS

Miklos_Hollender · 2006-12-07

Yes. It means that Inventory Costing was buggy, is buggy and probably will always be. This particular problem is usually a typical problem of Average Costing.

What you can do is to look at the Value Entries of the given Item, especially the ones that have Adjustment=True (were created by Adjust Cost - Item Entries who is the usual culprit) and try to figure out how to make a processing batch job that fixes the data. Because trying to fix it for good is very hard unless you are very, very experienced. Or do a good search in this forum - probably using Google as "search terms blah blah site:mibuso.com" is better than the built-in search engine - maybe somebody has a fix.

Also, it's better to catch these errors early. Make a report that shows the margin percentage of each Item. Make it parameterable so that it shows onlyItems above or below a min. / max. margin % threshold. Thus, if a company knows that usually it should have 25-35% margin on Items then it shows the ones that are <25% or >35% and thus you can notice early if the costing is wrong and then try to find a fix here, or on the Partner Source, or writing a processing batch job that fixes the data...

I think these are the problems that don't really have hard and fast solutions. What I personally do is that I hope it will work right in the next version and just hope to survive till that with the above mentioned options.

David_Singleton · 2006-12-07

hazem wrote:

Hello everybody,

Is it possible to have on the "Inventroy valuation report"
Quantity = 0 and
Inventory Value <> 0

Please can anyone explain me this?
THANKS

Yes this happens often, and IS NOT A BUG, its just a quirk of the business logic.

I also thought it a bug when I fist saw it, but sitting down with a pad and paper, and help form other people I eventually understood it. Take a look at these two threads:

http://www.mbsonline.org/forum/topic.asp?TOPIC_ID=14817&SearchTerms=inventory,valuation
http://dynamicsusers.org/forums/post/5298.aspx

Alex_Chow · 2006-12-07

Miklos Hollender wrote:

Yes. It means that Inventory Costing was buggy, is buggy and probably will always be. This particular problem is usually a typical problem of Average Costing.

What you can do is to look at the Value Entries of the given Item, especially the ones that have Adjustment=True (were created by Adjust Cost - Item Entries who is the usual culprit) and try to figure out how to make a processing batch job that fixes the data. Because trying to fix it for good is very hard unless you are very, very experienced. Or do a good search in this forum - probably using Google as "search terms blah blah site:mibuso.com" is better than the built-in search engine - maybe somebody has a fix.

Also, it's better to catch these errors early. Make a report that shows the margin percentage of each Item. Make it parameterable so that it shows onlyItems above or below a min. / max. margin % threshold. Thus, if a company knows that usually it should have 25-35% margin on Items then it shows the ones that are <25% or >35% and thus you can notice early if the costing is wrong and then try to find a fix here, or on the Partner Source, or writing a processing batch job that fixes the data...

I think these are the problems that don't really have hard and fast solutions. What I personally do is that I hope it will work right in the next version and just hope to survive till that with the above mentioned options.

Stop misleading people on this forum by saying that this is a bug! This is not a bug, it's only a bug because you don't fully understand it.

All it takes is to take a few minutes to sit down with someone that understands Navision costing and have them explain it to you, then you will be singing its praises.

Like David said, there's no bug in the costing, just it's a bit quarky. There's a whole course on Navision costing, so it's not possible to explain all of its glory on this forum.

David_Singleton · 2006-12-07

Miklos Hollender wrote:

...
What I personally do is that I hope it will work right in the next version and just hope to survive till that with the above mentioned options.

:shock:

hazem · 2006-12-08

Here my problem with more details:
On the item card i have
- Costing method = average
- Inventory = 0

When i run the "Inventory valuation" report i have:
Increases (LCY) : Quantity = 36, Value = 31000
Decreases (LCY) : Quantity = 36 , Value = 31250
As of 08/12/06: Quantity = 0 , Value = -250, Cost Posted to GL = -250

It's not a bug as you said, but i didn't found a logical explanation for that :-k

For other items i have for example
As of 08/12/06: Quantity = -2 , Value = 360
As of 08/12/06: Quantity = 1, Value = -180

How to understand the cause of this illogical results?

Miklos_Hollender · 2006-12-08

Stop misleading people on this forum by saying that this is a bug! This is not a bug, it's only a bug because you don't fully understand it.

"Bug" is from an end-user viewpoint, of course, not from a narrow-minded development viewpoint ("working as designed"). From this viewpoint "bug" means "behaviour other than expected". When a purchaser with 0 experience in "costing" sits down and looks at some stuff and remember that they bought it three times for $12, £12.5 and $13 then he expects to see something like that. Everything else is a bug. And he expects to see 0 cost in there is 0 stock without having to understand some bizarre, exotic theoretical principles. And these are the people we serve.

Sorry, I'm not willing to accept that the ERP industry can allow itself to disregard all the practices the whole software industry except ERP accepts for usability. I mean, the software industry outside ERP is arguing whether "shut down", "log off" and "sleep" buttons in the Start menu are maybe bad for usability because many people don't understand what they mean while we are expected to accept that an end-user has to grok a good amount of theory when all he asks from a software is to show some realistic costs that can be relied upon? No bloody way! Something that's not obvious at the first glance is an error - maybe not really a bug but a misdesigned feature but that's just playing with words.

Miklos_Hollender · 2006-12-08

David Singleton wrote:

Miklos Hollender wrote:

...
What I personally do is that I hope it will work right in the next version and just hope to survive till that with the above mentioned options.

:shock:

What's so shocking about it? I remember spending about a week in 3.6 finding why transfers are valued badly when I found that it takes the first value entry, not the last one and therefore it stays on expected cost forever, and about two days to find out what the trouble with Manufacturing with Average Costing is when I found that the Valuation Date becomes the date of adjustment and therefore it's all wrong. These errors were repaired in 3.7 and 4.0 but other troubles were introduced and it's not always feasible to spend so much time on features everybody expects to work out of the box perfectly. Workarounds seem to provide a better return on investment on most of the cases.

hazem · 2006-12-08

Thanks David, i red the explanation you give on http://dynamicsusers.org/forums/post/5298.aspx but my problem is how to explain this to the customer? Is there some corretions to make so that this error never occur again? I'm really :?

David_Singleton · 2006-12-08

hazem wrote:

Thanks David, i red the explanation you give on http://dynamicsusers.org/forums/post/5298.aspx but my problem is how to explain this to the customer? Is there some corretions to make so that this error never occur again? I'm really :?

The way I always do it, is to sit with the client, I then pick a problematic item, and copy a number of the transactions into an excel spread sheet. I then manually go step by step through the costing process to show that even if they calculated manually that's how the numbers come out.

In most cases it can be then shown why the numbers are odd. Things such as selling items before they are purchased, then posting the receipt after the shipment, but backdating the purchase invoice to before the sales invoice can cause issues such as your. I am sorry that I can not give you a specific answer for this scenario, since it would need the actual data, and a step by step analysis of it. In the case in that thread, I initially was looking for a bug, because the client was trained to correctly post purchases, but unfortunately a new person came on board and started just doing things differently without anyone realizing till it was too late.

Its all a case of educating the user to understand how the system works.

hazem · 2006-12-08

Thanks for your answer,
So there's no solution to make the "Inventory valuation" report show the right values for the transactions that was already validated...I have just to explain to the customer how to avoid such illogical results by running the "Adjust cost - Item entries" batch job every day and without changing the posting date which must be equal to the workdate... Am i right? :roll:

themave · 2006-12-08

It is a bug,

A bug is a mistake introduced by programing, and this is caused by programing, just because it is doing what the programmer wants it do to, doesn't mean it isn't a bug. It is a bug that was designed into the system, that everyone who uses the system for any length of times knows about,

and it is a bug that the programmers have choosen not to fix for some unknown reason, maybe they have a bug up their aXX from so many people complaining about it.

Stop defending a poorly programed function.

done with my rant for the day.

Alex_Chow · 2006-12-09

It's obvious that we can argue whether this is a "bug" or not for months, if for no better purpose than to boost our posting count. \:D/

All I can say is that there is no bugs in Navision costing. All of our customers that uses inventory and performs inventory costing analysis also knows that there's no bugs within Navision costing.

Are there areas that can be improvement? Of course. But as it is, you're able to generate meaningful analytical reports as well as meet the demands of your auditors and bankers.

And yes, I'm certified in Navision Costing (whatever that means) so this gives me a slight edge when I explain the concepts of Navision costing to our clients.

Before I completely understood how costing works, I thought it was buggy too. But after spending some time figuring it out, it's actually pretty well designed, IMHO.

hazem · 2006-12-11

Deadlizard,
The only document explaining Navision costing i found is :
"Costing for Microsoft® Business Solutions–Navision® Technical White Paper for Navision 4.00". Is it the document you are talking about? Cause i don't really found an explication of the problem i got on this document
:?

Miklos_Hollender · 2006-12-12

Hazem,

the date thing depends on the version. In 3.6 (and before I think) all adjustments got valued on the date entered there wich cause quite some problems. In 3.7 if the date of the original entry is earlier than that date, the it is valued for that date entered, but if it's later, it's valued at the original date. In practice it meant we've been always entering the start of the financial year, so last's years entries were adjusted to this date, leaving the closed year alone, but this years entries were adjusted to the original date. From 4.0 or 4.0SP1, this got a bit complicated. I think now it looks at Accounting Periods, see which is closed, and all adjustments to closed periods go the entered date, otherwise the original date. If accounting periods are months and are being closed, then the date to enter is probably the first date of the first still open month.

Alex_Chow · 2006-12-13

hazem wrote:

Deadlizard,
The only document explaining Navision costing i found is :
"Costing for Microsoft® Business Solutions–Navision® Technical White Paper for Navision 4.00". Is it the document you are talking about? Cause i don't really found an explication of the problem i got on this document
:?

Hi, the course material is Course 8388. It's a 2 day class that will teach you everything on the Inventory Costing. The VUE exam to get certified is #NAV 40-255.

If you have access to Partnersource, here's the link:
https://mbs.microsoft.com/partnersource ... g_Prep.htm

I'm not sure if you can navigate to teh same link from CustomerSource.

MSFT should make this course mandatory to be a certified partner in NAV since so many people are misunderstanding the Costing.

Problem with report "Inventory valuation"

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Problem with report &quot;Inventory valuation&quot;

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Problem with report "Inventory valuation"