Using Periodic Weighted Average —Exercises

Basic Data Setup

Site

Purpose: The purpose of this exercise is to show you how to create a site for use in the main exercise.

Windows:
Site
Sites per User

1. Open the Site window.
2. Create a site. Click on the Inventory tab. Select Standard Cost as the valuation method.
3. Open the Sites per User window, and connect the site to your user ID.

General exercise for Site

Inventory Locations

Purpose: The purpose of this exercise is to show you how to set up inventory locations for use in the main exercise.

Windows:
Inventory Locations

1. Open the Inventory Locations window.
2. Create inventory locations of the Arrival, Quality Assurance, and Picking types.

General exercise for Entering Inventory Locations

Inventory Part

Purpose: The purpose of this exercise is to show you how to create an inventory part for use in the main exercise.

Windows:
Inventory Part

1. Create inventory parts XX-58-410, XX-58-411 and XX-58-412, with the Purchased part type.
2. Create inventory part XX-58-413 with the Manufactured part type.

General exercise for Purchased Inventory Part

General exercise for Manufacture Inventory Part

Supplier for Purchased Part

Purpose: The purpose of this exercise is to show you how to create a purchased part for use in the main exercise.

Windows:
Supplier for Purchase Part

1. Open the Supplier for Purchase Part window.
2. Connect the purchased part to a supplier.

General Exercise for Supplier for Purchase Part

Main Exercises

Purpose: The purpose of this lesson is to show you how to perform both single-level and multilevel periodic weighted average (WA) revaluation.

Windows:
Aggregate Inventory Transactions per Period
Order Report
Manual Supplier Invoice
Inventory Part
Inventory Transactions History
Calculate Periodic Weighted Average
Product Structure
Routing
Shop Order

Single Level Periodic WA Update

Note: The day before you complete this exercise, you must prepare for it by establishing a starting point for the periodic WA calculations. A workaround that enables you to complete the exercise the same day is to modify date applied 1 day back for all today's transactions before going to step 2. It is essential that when you run Update Inventory Statistics (step 2.) there are no transactions with today's date applied in your site.

Day 1

1. Create a purchased inventory part using standard cost (XX-58-410), valued at $20 each. Enable periodic WA.
2. Open the Receive Inventory Part window, query for the part and receive 10 pieces into inventory. 
3. Open the Aggregate Inventory Transactions per Period dialog window.
4. Create a starting point for periodic WA calculations by submitting the job.

Day 2

1. Open the Order Report window. Print the Inventory Values report, and note the inventory value for your part.
2. Create a purchase order for five pieces of the part, and receive the part into inventory.
3. Issue seven pieces of the part.
4. Open the Manual Supplier Invoice window, and enter the supplier invoice. Enter an invoice price $75 higher than expected. Match the invoice so that the remaining amount is zero, and save your changes.
5. Open the Inventory Part window, and click the Costs tab. What value appears in the Cum Price Difference field?
6. Open the Inventory Transactions History window, and select the part you entered. Look at the transactions. What is shown?

Note: Do not refresh or close the Inventory Transactions History window. You will use it to compare the status before and after the actual cost update.

7. Open the Calculate Periodic WA window, and perform the periodic WA calculation.
8. Return to the Inventory Part/Costs tab. What has happened to the cumulative difference and the inventory value?
9. Open a new Inventory Transactions History window, and search for the part you entered. Compare the transactions after the update with the ones before. Compare the information in this window with the one you opened before the actual cost update. What is the difference? Why?

Multilevel Periodic WA Update

Note: The day before you complete this exercise, you must prepare for it by establishing a starting point for the periodic WA calculations. A workaround that enables you to complete the exercise the same day is to modify date applied 1 day back for all today's transactions before going to step 2. It is essential that when you run Update Inventory Statistics (step 2.) there are no transactions with today's date applied in your site.  

Day 1   

1. Create a purchased inventory part using standard cost, valued at $100 each (XX-58-411). Select periodic WA as supplier invoice consideration. Receive 23 pieces into inventory.  
2. Create another purchased inventory part using standard cost, valued at $200 each (XX-58-412). Select periodic WA as supplier invoice consideration. Receive 29 pieces into inventory.
3. Create a manufactured inventory part using standard cost, valued at $770 each (XX-58-413). Select periodic WA as supplier invoice consideration. Receive 10 pieces into inventory.
4. Open the Product Structure window, and create a structure for the manufactured part. Enter the purchased parts as part of the structure with two pieces as the quantity per assembly for each purchase part. Right-click and click Build to make the structure buildable.
5. Open the Routing window, and create a routing for the structure using one operation. Right-click and click Build to make the structure buildable.
6. Open the Aggregate Inventory Transactions per Period window.
7. Create a starting point for the periodic WA calculations by submitting the job.
8. Open the Inventory Transactions History window, and check for the parts that you created above. You should now have three transactions:

Day 2

1. Open the Purchase Order window and create a purchase order for 30 pieces of XX-58-411 and 35 pieces of XX-58-412, and receive it into inventory.  
2. Open the Manual Supplier Invoice window, and enter the supplier invoice. Enter invoice amounts $1,000 higher than planned for each part. Match the invoice so that the remaining amount is zero. Save your changes.
3. Create a shop order for one piece of XX-58-413. Receive the shop order into inventory.
4. Open the Inventory Part window, and click the Costs tab. What value appears in the Cum Price Difference field? For which parts?
5. Open the Inventory Transactions History window, and select the parts you entered. Check on the transactions. What is shown?

Note: Do not refresh or close the Inventory Transactions History window. You will use it to compare the status before and after the periodic WA update.

6. Open the Calculate Periodic WA window, and perform the periodic WA calculation.
7. Return to the Inventory Part/Costs tab again. What has happened to the cumulative difference and the inventory value?
8. Open a new Inventory Transactions History window, and search for your part. Compare the transactions after the update with the ones before. Compare the information in this window with the one you opened before the actual cost update. What is the difference? Why?