Cost peg transfers - borrow/loan and payback
To handle shortages of project pegged inventory identified during the outbound process, you can use the borrow/loan and payback procedure to temporarily transfer available to transfer (ATT) or excess inventory from other projects with minimum cost impact on either project.
The borrow/loan and payback process
The borrow/loan and payback process constitutes the temporary transfer of inventory between two projects. LN can temporarily transfer cost pegged items from one project, the lending project, to another, the borrowing project, to fulfill an urgent demand. After the inventory is replenished, the borrowing project transfers the borrowed item quantities back to the lending project.
Manual finalization and aging
You can set an aging period or manually intervene to finalize the procedure before the automatic payback is due. Manual finalization is used for individual borrow/loan transfers and aging is used for collective finalization. Manual finalization and aging result in the permanent transfer of the inventory to the borrowing project and a financial compensation to the lending project.
Cost aspects
Item values can fluctuate between the moments of borrowing and paying back. To prevent cost increases from affecting the lending project, inventory is paid back at the inventory value at which it was borrowed.
Tracking borrow/loan and payback information
Various sessions provide insight into the progress of borrow/loan and payback transfers, both logistically and financially. These sessions help you decide whether borrow/loan transfers must be manually finalized, before the payback is due.
To set up borrow/loan and payback transfers
You must set up the required transfer rules and parameters to:
- Use borrow/loan and payback transfers and/or permanent cost peg transfers.
- Allow available to transfer (ATT) and/or excess inventory for borrow/loan and payback transfers.
- Allow manual or automatic creation of borrow/loan and payback transfers.