Landed Cost Calculation Issue in LCM When PO Is Over- or Under-Received

Summary:

We are implementing Oracle Landed Cost Management (LCM) and have observed what appears to be an incorrect landed cost calculation when a purchase order (PO) is over-received or under-received. The issue occurs not at the time of receipt, but when the actual invoice is applied.

Content (please ensure you mask any confidential information):

Here’s an example to illustrate the behavior:

Scenario Setup

• Material PO: Quantity = 10 units, Price = $5 per unit
• Freight PO: Amount = $10
  Both POs are linked in a Trade Operation within LCM.

Material Receipt

• Quantity received = 8 units
• PO line status = Closed for Receiving
• Inventory valuation at receipt = $48 ($40 material + $8 freight)