FIFO costing -

• 09-03-2008 3:37 PM

  Sahar Saqeb Joined on 07-14-2008 Posts 17

  FIFO costing - Reply Contact Dear costing guru's I have some examples I am trying to create in AX V4 for FIFO costing to understand how AX gets to the cost price figure but it doesn’t make any sense to me. For example, I have create an item from scratch, with FIFO and standard dimension group (which has WH only active, with physical and financial inventory turned ON). I create a PO for 10 @ 20.00 and invoice update this. on 3/9/08 I create another PO for 10 @ 30.00 and invoice update this on 5/9/08 I create a sales order for 1 @ 40.00 and invoice update this on 8/9/08 When I go to the inventory on hand screen it shows me a cost price of $25.00 and a financial cost of $475.00 because it is reducing it by the avg cost price of $25.00. This is the average cost but since we are using FIFO costing shouldnt this be taking the first value in inventory which is $20.00?  I dont have to run an inventory close to see the adjustment back to $20.00 do I? I thought AX was able to illustrate the cost price without running a close? Can someone please help me understand what is going on here.

• 09-04-2008 11:02 AM

  In reply to

  Mohammed Rasheed Joined on 09-06-2007 Sheffield Posts 57

  Re: FIFO costing - Reply Contact Hi Sahar, The field you are looking at (onHand form) show the 'floating value' of the item... floating value of stock is always the current Average Cost price... this field is not dependent on the costing model (Note: the setting on the dim group do have an impact on average cost calculations).. basically i am trying to say that this field will always show the average cost price..so running a close will not really set it to the exact cost according to the model group either (though it might get it close). hope this answers your question..let us know if you need any more information. regards, Mohammed Rasheed www.dynamic-ax.co.uk www.dynamic-ax.co.uk

• 09-04-2008 3:34 PM

  In reply to

  Sahar Saqeb Joined on 07-14-2008 Posts 17

  Re: FIFO costing - Reply Contact Hi Mohammed,   Thank you for the reply. So if the on hand form shows the current average cost price, how would I then get an accurate representation of my items true cost if you say the on hand form shows the avg cost price? After I run an inventory close, in the settlements I see the PO is adjusted by -$5.00 which makes sense but where do I see the adjusted price?  When I go back to the on hand form it still shows me the price of $25.00 so what form would I need to look at to show me the FIFO costing has taken place? or do I just assume it has. Surely AX has a way of illustrating this cost accurately? or am I mistaken? Regards Sahar

• 09-07-2008 3:40 PM

  In reply to

  Mohammed Rasheed Joined on 09-06-2007 Sheffield Posts 57

  Re: FIFO costing - Reply Contact Hi Sahar, Your best bet would be the Inventory Valuations Reports (Stock Management -> Reports -> Status > Stock Value > Stock Value per Dimension/Item group). I dont think any ERP system would be able to give you true/exact cost figure in real time...even if you build a custom form, it would be so slow that it wont be feasible to use it regularly.... its easy to calculate the true value when there are only a few transactions, but when the number of transactions hit the thousands, the calculations wont be so straight forward (imaging how it would be when there are a million transactions).. another possible solution would be to use the 'Latest Cost Price' check box on the item master.. i believe if this check box is checked, then the cost price on the item master is updated automatically when a close/recal is executed. hope this helps. let us know if you have any more questions. regards, Mohammed Rasheed www.dynamic-ax.co.uk   www.dynamic-ax.co.uk

• 10-16-2008 12:29 PM

  In reply to

  Bertil Hökerberg Joined on 10-16-2008 Posts 3

  Re: FIFO costing - Reply Contact If you want real-time FIFO calculation in AX take a look at the company FSB and their module Inventory II. This module will settle your transactions in almost real time and recalcualte your inventory continously and at the same time increase performance of AX dramatically! Inventory II is a must for any AX implementation with 1000+ simoultanous users using the inventory module. Bertil