Lot pricing

This topic describes the inventory valuation method of lot pricing.

Using the Lot Price (Lot) valuation method, the inventory is valued against a price that is differentiated for each lot. The lot price is determined at the first receipt of the lot. If the price of the item changes and subsequent receipts are performed for the same lot, the inventory is still valued against the lot price determined at the first receipt of the lot. The price variance between the first receipt and subsequent receipts is balanced as a lot result in the financial reconciliation. For further information about financial reconciliations, refer to the User's Guide for Financial Integration and Reconciliation Transactions (U8967B US).

Example

A purchase order lists one lot with a total quantity of 90 electric switches. The purchase price of the first receipt of 50 switches is $5 each. As a result, the lot price of the switches is $5 each.

Lot price5
Receipt 150 switches of $5 each
Receipt 230 switches of $6 each
Receipt 310 switches of $6.5 each

 

The next day, you receive another 30 switches for the same lot with purchase price $6, and after one more day you receive the remainder at a purchase price of $6.50 each. Because the lot price is determined at the first receipt, the lot price is still $5 each for the second and third receipt.

The lot result for the second and third receipt is $ -30 (150 - 180) and $ -15 (50 - 65), respectively.

To set up lot pricing

To use the inventory valuation method Lot Price (Lot):

  • In the Items - Warehousing (whwmd4500m000) session, select:

    • The Lot Price check box.
    • The Lot in Inventory check box.
  • In the Inventory Valuation Method field of the Warehouse - Item (whwmd2510m000) session, select Lot Price (Lot).

As a result, LN calculates a separate valuation price for each lot.

Note

To use lot pricing, the items must be lot-controlled. For more information, refer to To set up lot items.

To calculate the lot price for purchased items, you can have LN add surcharges to the purchase price. To have LN add surcharges in the lot-price calculation, in the Lot Control Parameters (whltc0500m000) session, click Calculate Surcharges.

If you want to change the inventory valuation method after any inventory arrived for the item or after any issues have been made, use the Change Valuation Method (whina1232m000) session.

Lot price

The Total Lot Price field in the Item - Lot (whltc1100m000) session displays the actual price.

To view details, on the appropriate menu, click Cost Details.

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