Costing Methods

Item Model Group Parameters: We can select costing methods from Item Model Group. Also we can decide Whether or not Physical value of the item should be included in respective Costing method or not. Costing Methods: FIFO LIFO Weighted Average Standard Cost

Include Physical value means include those items cost which are only physically updated (packing slip Updated), INVOICE yet to be posted. So such items can be included in Costing methods along with Invoiced transactions. FIFO and LIFO: Both Costing methods behave as weighted average till Inventory Closing is not done. Average cost= Total updated cost of item/Total No. of item Available After Inventory Closing, Adjustment is done with the Inventory Transactions as per Costing Model Group. Also for calculating average cost of the item, Physical value Parameter in Inventory Model plays important role. This parameter is just to ensure whether physical Cost of items ( ie Cost of item whose only Packing Slip is Posted, Invoice yet to be Posted) should be consider or not.

Scenario I: Item No: 000035 Inventory Model Group: Chairx Costing Method: FIFO Include Physical Value: UNCHECKED

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Fig 1: Item Model Group: Chairx, FIFO, Include Phy. Value= Unchecked

TRANSACTIONS: a. Create PO1 of qty=10, Unit price=5, Total amount=50. Only Post Packing Slip. b. Create PO2 of qty=10, Unit price=7, Total amount=70. Post Invoice. c. Create PO3 of qty=10, Unit price=9, Total amount=90. Post Invoice.

At this point Inventory Status is: Physical On-hand= 30 Physical Cost amount= 50 (PO1) Financial Cost amount= 70+90 =160 (PO2+PO3) Cost Price = 160/20 = 8/unit (Unless FIFO, Weighted Avg. Method is followed) Here: Only financial cost amount (160) and number of items associated (20) are considered, as Include Physical value=UNCHECKED

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d. Raise SO1 of qty=5. Post Invoice. Due to calculated cost price=8/unit. Invoice of 8*5=40 is been posted.

After SO1 Invoiced Transaction: Physical Cost amount=50 AND Financial Cost amount=120 Now, Check Include Physical value checkbox. Inventory Model: FIFO Include Physical Value= CHECKED

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Here: To calculate Cost Price Physical as well as Financial Cost summed up and divided by total Physical Inventory. Cost Price= (50+120)/25 = 6.80/Unit e. Raise SO2 of qty=8. Post Invoice. Due to calculated cost price=8/unit. Invoice of 8*6.80= 54.40 is been posted.

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That means, AX calculates cost of each item as Average Cost, depending upon Physical value parameter in Item model group. Unless Costing Method is FIFO, average item costs get assigned at the time of Invoicing but not the cost of the first item as per FIFO rule. When we close Inventory, All respective transaction got settled against Item model group.

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TRANSACTIONS IN PURCHASE ORDER

How purchased items should flow once they have arrived to company is handled with the help of Item model group: Physical Update parameters.

Registration

Packing Slip

Invoicing

Registration Requirements:

When it is ACTIVE, Purchased items must be registered before Update physically (Post Packing Slip). Quantities to be Updated physically should be registered with tracking dimensions like Serial No, Batch No etc.

When it is Disabled, Purchase items can be Update physically successfully into inventory without Registration process of items.

Receiving Requirements:

When it is ACTIVE, Purchased items must be received into Inventory (Post Packing Slip) before Invoicing. Here only items those are Physically updated into inventory can only be Invoiced. So we can check PO Invoice qty against Quantity actually received.

When it is Disabled, Invoice can be raised for PO items those yet to receive OR to be updated into Inventory.

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SCENARIO: Item No: Binbag Item name: Binbag Inventory Model Group: Std Chair Registration Requirements= CHECKED Receiving Requirements= CHECKED

Fig. Item Model Group Parameter.

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Fig: Item Storage Dimensions AND Tracking Dimensions TRANSACTIONS: Create PO of qty=20, Unit price=5, Site=2, WH=21 Total amount=100. Confirm PO.

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Sr.No

Purpose 1 Try Confirm

Steps Taken Confirm Button Fill all necessory Information

Result PO Confirmed Inventory Transaction is 20 qty ORDERED 20 qty is ON Order Status PO is OPEN ORDER STATUS

Explaination

2 Try Packing Slip Before Registration

Try to generate Packing slip to Update Physical Inventory

ERROR Due to Registration Req=CHECKED

Qty 20 cant received,Registration Required Items should be registered into company before it get updated into Inventory.

Registration Updateline->Registration 3 Process (Depending on Tracking Enter Batch No. Manually Dimensions)

ERROR

Batch No should be created before, for specific Item. Cant directly specify, has to be selected from already created List of Batches e.g. SrN-BB## (Sr-BB01 TO Sr-BB20)

Create Sr. No with Wizard Sr. No and Batch No is created Sr. No is created with given format in Wizard Select Batch No from dropdown Batch No also assigned to bunch of items. POST ALL Item got registered with given Inventory Transaction Sr,No and Batch NO ON hand=Physical Available 20 Status= Registered PO is OPEN STATUS

Try Invoicing Before 4 Packing Slip

try to update Invoice for PO

ERROR Due to Received Req=CHECKED

Qty cant be Invoiced cause Inventory trans are not with Status= Received Generate Payment only for items which we have received updated into Inventory

Post Product Receipt 5.1 ALL

Try to generate Packing slip Update Physical Inventory Enter Receipt No. Qty updated=20 (ALL) 20 items got updated into Inventory. Status= Recieved PO is Received Status

Receipt Form->Lines->Qty=15 (5 remainder to Deliver yet) 5.2 PARTIAL Product receipt,Qty=5

15 qty got updated

On hand =20 Received=15 Registered=5 On hand=20 Received=20

PO is Open Status

5qty got Updated

PO is Received

6 Cancel Product Reciept Receipt Journal-> Cancel Cancel already received Items

Cancel Successfully

All transactions from Product receipt and Regeistration got Deleted Inventory Transaction for 20 qty = On Order Again PO is OPEN STATUS Again Again Process From Registration->Product Receipt PO is recceived Status

7 Invoice

Post Invoice Receipt

Ledger A/c got updated with item Cost

Inventory Tranactions 20 qty PURCHASED SO is INVOICED

Fig. Transactions in Various Stages of PO. (*Reference : Pratik-ITTI Mumbai CaseStudy.xls) Page | 9

Packing Slip Before Registration:

Registration Process Screen-shots:

Fig: Registration Form

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Fig: Inventory Status after Registration Packing Slip Process Screen-shots:

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Fig: Inventory Status after Packing Slip Updated

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TRANSACTIONS IN SALES ORDER

How items should move out of the Inventory once SO confirmed? Set up Item model group: Physical Update parameters.

Picking Items
Picking Requirements:

Packing Slip

Invoicing

When it is ACTIVE, Sales items must be Picked from Inventory before Update physically (Post Packing Slip). Quantities to be updated physically should be picked with help of tracking dimensions like Serial No, Batch No etc.

When it is Disabled, Sales items can be moved out of inventory without Picking Process. We can Update Packing slip without Picking of Items.

Deduction Requirements:

When it is ACTIVE, Sales items must be deducted from Inventory (Post Packing Slip) before Invoicing. Here only items those are physically updated and deducted from inventory can only be Invoiced. So we can check SO Invoice qty against Quantity actually deducted.

When it is Disabled, Invoice can be raised for SO items those yet to deduct OR to be updated out of Inventory.

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SCENARIO: Item No: Binbag Item name: Binbag On Hand= 30 qty

Inventory Model Group: Std Chair Registration Requirements= CHECKED Receiving Requirements= CHECKED

Reservation Method: AUTO

Fig. Item Model Group Parameter. Page | 14

TRANSACTIONS: Create SO of qty=20, Unit price=5, Site=2, WH=21 Total amount=100. Confirm PO.

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Sr.No

PurSOse 1 Try Confirm

Steps Taken

Result 20 qty is Reserved Physically SO is OPEN ORDER STATUS on hand=30 reserved=20

Explaination

Confirm Button SO Confirmed Fill all necessory Information Inventory Transaction is 20 qty Physically Reserved

Available=10

2 Try Packing Slip Before Picking

Try to generate Packing slip Update Physical Inventory

ERROR Due to Picking Req=CHECKED

Qty 20 cant Dedcted,Picking Required Items should be Picked from the Inventory before it get deducted from Inventory

Picking 3 Process Depending ON Picking Route Status in A/c receivable param

Updateline->Pick

SO is Open Status On hand=10 Picked=20 Available=10 Automatically Picking No picking Registration is required. Item Transaction status=PICKED Automatically

Route=COMPLETE

Route=Activated

For Physical Picking or manual Have to do picking registration ,Manually picking. Item Transaction status=ACTIVATED Enter Qty in Registration form -> Update ALL Status=PICKED

Try Invoicing Before 4 Packing Slip

try to update Invoice for SO

ERROR Due to Deduction Req=CHECKED

Qty cant be Invoiced cause Inventory trans are not with Status= Deducted Generate Payment only for items which have deducted from Inventory

Post Packing Slip 5.1 ALL

Try to generate Packing slip to Update Physical Inventory Enter Receipt No. Qty updated=20 (ALL) 20 items got Deducted From Inventory. Status= Deducted SO is Deducted Status

Receipt Form->Lines->Qty=15 15 qty got updated (5 remainder to Deduct yet) 5.2 PARTIAL Packing Slip,Qty=5 5 qty got Updated

On hand =10 Deducted=15 Picked=5 On hand=10 Deducted=20

SO is Open Status

SO is Deducted

6 Cancel Packing Slip

Receipt Journal-> Cancel Cancel Successfully Cancel already Deducted Items

All transactions from Picking registration and Packing slip got Deleted Inventory Transaction for 20 qty = Physicaly Reserved Again SO is OPEN STATUS Again Again Process From Picking Registration->Packing Slip Update SO is Deducted Status

7 Invoice

Post Invoice Receipt

Ledger A/c got updated with item Cost

Inventory Tranactions 20 qty SOLD SO is INVOICED

Fig. Transactions in Various Stages of SO. (*Reference : Pratik-ITTI Mumbai CaseStudy.xls) Page | 16

Registration Process Screen-shots:

Fig: Registration Form

Fig: Inventory Status after Registration Page | 17

Packing Slip Process Screen-shots:

Fig: Inventory Status after Packing Slip Updated

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ITEM RESERVATIONS Manual Auto Ordered Reserve

MANUAL RESERVATION: Accounts receivable>Acc. Receivable parameter>Reservation>Manual Here, When SO confirmed, NO items got reserved against PO items. Here SOs issue Status is Still On Order With this No items is kept reserved for SO items from already received or items yet to receive PO lot automatically. You have to reserve items manually. Here you can reserve items of specific Sr. No from specific Batch. Select SO>Lines>Inventory Tag> Reservation> Reserve line>Ok AUTO RESERVATION: Accounts receivable>Acc. Receivable parameter>Reservation>AUTO Here, When SO confirmed, items got reserved against PO items. Here SOs issue Status updated to Reserved from On Order With this items can be reserved for SO items from already received (Physical Reserved) or items yet to receive(Ordered Reserved)PO lot automatically. ORDERED RESERVATION: We can reserve from the PO items which are yet to receive physically into inventory.When PO items are at Ordered status (Packing Slip not updated), we can reserve from the ordered quantity if On-hand inventory=0 (Insufficient in hand). Here when items got reserved from ordered quantity called Ordered Reserved. Shows no of items under Ordered reserve column. To enable Order reservation, Inv. Warehouse Mgmt>Inv and Warehouse Parameters> Ordered Reserve= CHECKED

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Automatic reservation is dependent on Reservation Parameters set On Item Model Group Setting. Date Controlled Backwards from Shipdate

Date Controlled Reservation is act as FIFO for PO items to reserve. Here items those received first got preference for reservation over those received later.Here oldest PO lines reserved for latest SO lines. Backward Shipdate Reservation is act as LIFO for PO items to reserve. Here items those received latest got preference for reservation over those received first. Here PO of closest date of receipt considered for latest SO lines.

Date Controlled reservation:

PO1

Delivery Date: 1 Aug 2013

PO1 lines reserved FIFO rule

PO2

Delivery Date: 10 Aug 2013

SO1 15 Aug 2013+4 days dYSDays

PO3

Delivery Date: 17 Aug 2013

Backward Shipmdate reservation:

PO4

Delivery Date: 25 Aug 2013

PO3 lines reserved Received 17 Aug LIFO

Scenario: Physical Available=3 , Oredered=5 , On-order=6 After SO line reservation: Physical Available=0, ordered=5, Physical reseverd=3, ordered reserved=3, on-order=2 Here, 3 qtys are reserved from available on hand items ie Physical reserve=3 And other 3 are reserved from Ordered qty (3 out of 6) ie Ordered reserve=3

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Sr No
Step-1 Step-2 2.1 2.2

Scenario
On hand=96 Raise SO1 for qty=96

Action

Observation

Confirm Reserve qty=78 from available (18 qty yet to reserve/pick )

Availble Physical qty=96 Are available to reserve , On order qty=96 (Due to Confirm SO1) Reserved = 78 , Availble Physical qty=18 Are available to reserve , On order qty=18 (Due to Confirm SO1)

Step-3 3.1 3.2

Raise SO2 for qty=20 Confirm Picked 18 from available (2 qty yet to reserve/pick ) Scenario 1 : [Oredered qty=0, Available=0] Try to Reserve remaining 2 qty Reserved = 78 , Availble Physical qty=18 Are available to reserve , On order qty=38 ( SO1 qty =18 + So2 qty=20 ) Reserved = 78 , Availble Physical qty=0 Are available to reserve , On order qty=20 ( SO1 qty =18 + So2 qty=2 ) ERROR: Qty 2 not available for reservation as 0 is Physical available We cant reserve qty when there is not qty available physically. Item Model group Not allowed Physical -ve Inventory. Reserved = 78 , Availble Physical qty=0 Are available to reserve , On order qty=20 ( SO1 qty =18 + So2 qty=2 ) ,Ordered in total = 2 (PO1 qty = 2 )

Step-4

Raise PO1 for qty =2

Confirm

Step-5

For SO2 Scenario 2 : [Oredered qty=2, Available=0] Try to Reserve remaining 2 qty ON reservation form Ordered qty = 2 , Available to reserve = 2 , So try to reserve qty=2 reserved qty=78 , Available Physical=0, On order = 18, Ordered in total=2, Ordered Reserve=2 Here, Items which we have ordered but not yet physically updated , can be reserverd for SO qty. Those were reserved against ordered reserved qty but not in reserved qty.

Register All

Scenario: 3

Try to reserve more than ordered Here, We have already ordered 5 qty with raising PO. Now We will try to raise SO for qty=7 and reserve them against ordered qty Confirm Reserved=20 Physical Availble=0 , ordered=5 , On Order=7 Ordered=5 , Available to reserve= 5 , Qty to reserve=7 ERROR 5 is available only to reserve Qty changes to 5 (Maxm qty)

Reserved=20 Physical Availble=0 , ordered=5 SO qty =7 3.1

Reserve

3.2

Register All

Reserved=20 Physical Availble=0 , ordered=5 , oredered reserved=5, On Order=2 Instead of Error, We can reserve atmost qty that has Ordered. Reserved against Ordered reserved

Fig. Case studies Order Reservation. (*Reference : Pratik-ITTI Mumbai CaseStudy.xls)

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Bills of Material

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MAXIMUM, MINIMUM ORDER SETTINGS We can set maximum, minimum quantity of specific item to be purchased or sell from In Default Order Settings, We can link up default sites that have to link up with specific Item number for Specific Order type. Also we can control order quantity to be allowed from selected sites. In Site Specific Settings, We can link up default Warehouses to site for specific item. Here also we can control order quantity to be allowed from selected warehouses. We can also override Default Order settings of particular site. Scenario: Default Order set up for Purchase Order Item number: 000035 Default Order Site=1 Mandatory Multiple=2 Minimum Order Qty=2 Maximum Order Qty=10 Standard Order Qty=5

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Actions Create PO, Update line

Input Select item number=00035 on PO line

Observation Site=1 got selected Qty get updated with qty=6 (Rounded to 6 from Stdqty 5)

Change Site

Change site=2 from site=1

ERROR: Transactions must

be for Site=1 (Mandatory Selected) Change qty to less than Minimum Change qty=1
MsgBox : Minimum Qty=2 Update? Click YES Qty to updated=2 MsgBox: Multiple of 3, Update? Click YES Qty Updated=3

Actions

Input

Observation

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Change qty to more than Maximum

Change qty=13

MsgBox : Maximum Qty=10 Update? Click YES Qty to updated=10 MsgBox: Multiple of 3, Update? Click YES Qty Updated=12 Click NO Qty Updated=15

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Scenario: Site Specific Order Setting for Purchase Order Item number: 000035 Default Order Site=1 Mandatory WH=13 Override: Multiple=2 Minimum=4 Maximum=15 Standard=4

Parameters /Actions WH=13 Not Mandatory

Input

Observation Site=1 WH=13 got selected

Select item number=00035 on PO line

Qty get updated with qty=6

Change WH=12 from WH=13

NO ERROR

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Parameters /Actions

Input

Observation

WH=13 Mandatory

Change WH=12 from WH=13

ERROR: Transactions must

be for WH 13

Check all min, max order Override= Disabled setup

It will take all Default Order Setting assigned to respective Site.

Site=1 WH=13 got selected Override= Enabled (Site Specific settings overrides Default order Settings) Change qty less than minimum Change qty=3
MsgBox : Minimum Qty=4 Update? Click YES Qty updated=4

Select item number=00035 on PO line

Qty get updated with qty=4

Change qty more than maximum

Change qty=15

MsgBox : Multiple of 2 Update? Click YES Qty updated=16ssss

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