FIFO date-controlled items cannot be used with reservation hierarchies?

(0) Share

Report

Posted on by gregBHS

I have run into a conflict when trying to use FIFO date control on an item model group when an item is WMS enabled. Below is the error message we are getting:

"One or more items associated with this Item model group are controlled by processes defined for warehouse management and the use of reservation hierarchy. FIFO date-controlled reservations will not be used for these items."

The client requires that costs of raw materials be attributed to the cost of the finished good item on a FIFO or 'layered' basis. So for example, we purchase 100 units at $1.00/each today and 100 units at $2.00/each tomorrow. This item goes into a produced FG, which we make on day 3. If the production consumes 100 units, it will consume the first batch but at a cost of $1.50/each. The client wants it to consume the first batch at a cost of $1.00/each.

We also require WMS enabled items, which in turn require a reservation hierarchy, and it appears that these cannot work in conjunction with each other. The client is on AX7, but it appears from digging around that this is also the case in 2012. Has anyone run into this and/or know of a way around it without a customization?

*This post is locked for comments

I have the same question (0)

All responses (4)

Answers (1)

Verified answer

Community Member on at

Like (1)

Report

Hi,

Create Batch enable item and make sure FEFO date controlled check box is checked on Item model group.

And use FIFO as your inventory valuation method.

we purchase 100 units at $1.00/each today with Batch B1 (expiry date is 12/25/2016) and 100 units at $2.00/each tomorrow with Batch B2 (expiry date is 12/26/2016).

As per setup FEFO date controlled, system pick the Item from Batch B1 and after perform Inventory closing adjustment, System consume at a cost of $1.00/each because of we are using FIFO.

Ax always use Weighted Avg as inventory valuation model. We have to perform Inventory closing adjustment, in case we using some other Inventory valuation model like FIFO, LIFO..... It will adjust the value.

Perform Inventory closing adjustment and check the value, it will show $1.00/each

1 people found this reply helpful.

Was this reply helpful? Yes No
Guy Terry 28,924 Moderator on at

Like (0)

Report

Hi greg,

Are you using the Batch inventory dimension on these items?

Was this reply helpful? Yes No
gregBHS on at

Like (0)

Report

Guy and Parnjothi thanks for the replies, we are using Batch as an inventory dimension, so I believe Paranjoti's solution may work for us. I will try this and report back.

Was this reply helpful? Yes No
Guy Terry 28,924 Moderator on at

Like (1)

Report

Hi Greg,

In your example, it's important whether you have ticked 'Financial inventory' on the Batch dimension (on the Tracking dimension group). If you haven't, and if the inventory model on the item model group is FIFO, then AX will initially value the raw material consumption at $1.50, but after the periodic 'Inventory close' routine is run, it will revalue it to $1.00.

In terms of WMS, you could set 'Batch below location' in your reservation hierarchy. Then on the Location directive action (which should have 'Batch enabled' ticked), you will be able to use the query to Sort batches by any of the dates that are available on the batch form. In this way, you can direct AX to pick the oldest or first expiry batches. If 'Financial inventory' is not ticked on the Batch dimension, then the batch that you actually consume is irrelevant to the cost that is assigned to that consumption.

Was this reply helpful? Yes No