Indicate Inventory Valuation Method

Explanation

Use this activity to define the default inventory valuation method used for inventory parts at your site. This mandatory task is to be performed by a system administrator or equivalent person.

There are four inventory valuation methods from which you can choose:

Type Description
Weighted Average Inventory value will be recalculated at every new purchase order arrival based on the purchase price. IFS/Costing will not affect the inventory value when this valuation method is used.
Standard Cost Default. Inventory value will be based on a fixed value that is either manually entered on the inventory part, or calculated in IFS/Costing.
First In First Out FIFO. Inventory value will vary between different purchase order receipts based on the purchase price. When the stock is shipped, the cost will be calculated based on the FIFO method.
Last In First Out LIFO. Inventory value will vary between different purchase order receipts based on the purchase price. When the stock is shipped, the cost will be calculated based on the LIFO method.

Prerequisites

This activity has the following prerequisites:

System Effects

As a result of this activity: