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Finance | Project Operations, Human Resources, ...
Unanswered

Production order valuation process problem

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Posted on by 5

Hello everyone

Our inventory item values on production orders/batches are building up value as the production goes on in AX. When any material and/or hours are being booked against the production order the value of that particular batch is increased by the standard cost of each of those posted operations/consumptions. All these values are being booked to our Work in Progress inventory.

Problem is that when the RAF & Put away transaction is done and moved to our intermediate inventory it will take the full cost of the batch i.e. including also the remaining operations (like batch review and release of the batch).

This will lead to a situation where our WIP valuation will be negative.

When eventually the remaining operations are performed and the batch is ended all the production variances will be booked and the situation will be even but this will take months.

How to avoid all the costs going to WIP after RAF and put away and WIP being negative? 

  • Taitska Profile Picture
    5 on at
    RE: Production order valuation process problem

    Hi Andrew,

    Manufacturing process takes something like 1 month and after that we make RAF to get the product in inventory physically (we will which location it will be and how much we have produced). After that we still have operations to like testing, reviewing and releasing for sales and those take about 3 months.

  • andrewlencsak Profile Picture
    361 on at
    RE: Production order valuation process problem

    Hi, you mention "When eventually the remaining operations are performed and the batch is ended all the production variances will be booked and the situation will be even but this will take months." Why are labor operations being posted that far after the  actual production? It would make sense that it would stay negative if that is the company's practice as you have said yo RAF'd and manufactured something without recording the labor. I would recommend you don't leave Prod orders with open transactions or wait more than a week after RAF to end them. The delay you are suggesting seems unusual.

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