Inventory costing

Sterling Selling and Fulfillment Foundation provides the capability to maintain inventory costs against specific products assuming that the costs are passed through Sterling Selling and Fulfillment Foundation from financial or procurement systems.

Sterling Selling and Fulfillment Foundation can also provide a method for determining the cost of returned items. By maintaining inventory costs, Sterling Selling and Fulfillment Foundation can pass cost information to financial systems and act as a repository for "cost-centric" reporting.

Sterling Selling and Fulfillment Foundation can be set up to maintain inventory costs on a node-by-node basis. For each node, Sterling Selling and Fulfillment Foundation maintains records for all inventory receipts at the purchase order, item, and node level. Sterling Selling and Fulfillment Foundation also maintains records for shipments out of the node.

Sterling Selling and Fulfillment Foundation provides two inventory costing methods:

Inventory Value is the total monetary value of all on-hand inventory at a given location, based on per unit Average Cost of each item. It is updated whenever inventory is moved in to or out of an on-hand classification.

Sterling Selling and Fulfillment Foundation calculates the new inventory value using the following formula:

Old Inventory Value + Change in Inventory Value Due to Transaction

where “Change in Inventory Value Due to Transaction”:

  1. Can be positive or negative (depending on whether the transaction represents a receipt or issue from on-hand inventory)
  2. Is calculated from transaction quantity * unit value of the transaction document

Sterling Selling and Fulfillment Foundation provides integration into financial applications to vary ledger account determination by something such as product line or department. The Posting Classification attribute specified during Item definition is used to group items into appropriate Financial ledger groups. When translating a transaction from Sterling Selling and Fulfillment Foundation into a series of financial postings, the classification value for the item in the transaction is carried in the interface.