Units of measure

The economic loads that you receive from vendors are rarely the same quantities or packaging your customers demand.

For example, your vendor may distribute items by the case, which you can either resell by the case or package individually for consumer use. Because of the many different sources of products, units of measure (UOM) facilitates purchasing, pricing, selling, and counting products. In the system, you can flexibly handle UOM situations at both the product and consumer level.

There are five types of units that are relevant to the system.

The stocking unit, selling unit, and counting unit are product-specific and are set up in Product Setup. You can apply these units of measure to any location or warehouse in your company that stocks the product. This ensures that the inventory valuation on the balance sheet and the cost of goods sold that are shown on the income statement reflect an accurate value.

The buying unit and standard pack are location-specific records and are set up in Product Warehouse Product Setup. Each location that stocks the product has flexibility in obtaining the product and controlling costs. An order quantity that is less than half a standard pack is recognized by the automated replenishment system, and the buyer is informed. The buyer must compare the cost of obtaining and storing the extra stock and the length of time it takes to sell the extra quantity against the incentive a vendor offers for the standard pack order.

If your warehouse transfers products to and from other warehouses, the transfer UOM is also relevant. The transfer UOM is set up in Product Warehouse Product Setup.