Physical Inventory Method

A physical inventory method is the way a physical inventory is carried out. M3 contains these methods:

  • Cyclic

    Physical inventory is carried out on a recurring basis at set intervals. You define the cycle and then use it to determine which items need to be inventoried at what time.

  • Periodic

    Physical inventory is carried out at any determined time based on user-determined selections.

  • Zero-point

    Physical inventory is carried out on selected items having an on-hand balance that meets one of these criteria:

    • Negative on-hand balance
    • On-hand balance under the limit for safety stock
    • On-hand balance under the reorder point
    • On-hand balance under the reorder point plus a specified percentage .
  • Deviation

    Selection is made for items that have at least one balance ID in a deviation location. This method restricts the physical inventory lines to items that suffered from a DO deviation, making balance inaccuracy likely.

Description

A cyclic physical inventory is a good method for taking inventory, allowing you to repeatedly check on-hand balances. You can supplement it with a periodic physical inventory for inventories that lie outside the normal pattern.

A zero-point physical inventory is suitable for high-volume items or items stocked at numerous locations.

A physical inventory based on deviation targets possible stock inaccuracy due to errors in reporting during the distribution order process. We recommend that you use this in warehouses that serve as large distribution centers, from which goods are distributed to other warehouses.