Transfer price rule based on average item cost at sub-inventory level

Summary:

We have configured valuation units at the sub-inventory level and can view item costs accordingly. Our transfer pricing rule is set up to apply a markup on the item cost.

However, when creating a transfer order, the system uses the organization-level average item cost instead of the cost at the specific sub-inventory.

For example:

• Sub-inventory S1 had an item cost of $762.89 at the time of transfer order creation from where the item is picked and shipped, but the transfer order amount was only $451.
• Based on the configuration, the expected price should be $762.89 + 15% markup = $877.32.
• This discrepancy resulted in a negative intercompany profit