Supply chain | Supply Chain Management, Commerce

Physical Cost Amount is Zero - Average unit cost discrepancy between sites

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Posted on by AhmadMezher

Hi All,

I'm having an issue with the Average unit cost calculation in Dynamics 365. I'm not able, first of all, to determine how is it actually calculated.

The inventory model we are using is the Weighted avg. and the Item model groups that is being used for all our stocked inventory is shown below:

Now, when inspecting the Cost Object for a specific Item that is being used and sold in two different sites, I get the following exported Cost Object:

The issues we're having:

The average unit cost is different in the two sites although they are being purchased and sold the same!!
Physical cost amount is 0, although there is Physical inventory and the Value is only calculated using the Financial cost amount!!

There is also the fact that the last time the Inventory was closed was in Feb 2022.

Any idea on what is Happening?

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BillurSamdancioglu 19,703 Most Valuable Professional on at

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Hi,

For costing, you may use this TechTalk Series.

community.dynamics.com/.../inventory-costing-in-dynamics-365-supply-chain-management-techtalk-series

Can you please check the report of Inventory Value Report.

learn.microsoft.com/.../inventory-value-report-storage

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AhmadMezher 21 on at

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Hi Billur,

Thank you for sharing the TechTalk series.

In regards to the Inventory Value Report, I'm getting similar results and I wasn't able to figure out why the Physical Cost Amount is zero and the only amount that is used for the Value field is only calculated from the Financial cost amount.

I'll be looking at the TechTalk videos and reviewing the Costing configuration.

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nunomaia 25 Moderator on at

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In storage dimension groups you have a setup to define if you will have inventory validation per site. If it's enabled, you will have cost per site. Check column "Financial Inventory"

Physical cost amount is the amount that was posted to the general ledger based on physical update, so the amount that was posted during item receipt or item issue , basically before invoice

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AhmadMezher 21 on at

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Hi Nuno,

Thanks for your reply. We do have this option enabled in Storage dimension groups.

To your point about the Physical cost amount as the amount posted to the GL on update: Why then is the physical cost amount Zero?!

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