Inventory Management - EBS (MOSC)

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Purchase of item whose UOM conversion rate varies on each purchase

edited Oct 22, 2015 10:02AM in Inventory Management - EBS (MOSC) 1 commentAnswered

Our client buys steel pipes.

The pipe UOM is Feet. It is received, stored, consumed, etc in Feet.

Many vendors price them in Kg's.

Eg 1 :  Co has to buy 10 Feet of pipe.

           Vendor weighs 10 Feet pipe and it comes at 35 Kg    X   $10   =   $350  

Eg 2:     On another occasion, 10 Feet of Pipe weighs 31 Kg   x   $10   =   $310

           

Standard UOM conversion for item was defined at 10 Feet = 30 Kgs

Standard PO is made in Kgs because price is charged in Kgs.

PO Receipt is done in Feet because Co wants to receive 10 Feet pipe.

UOM is changed on PO Receipt window to Feet.

Problem:

Eg 1: when we receive 10 Feet pipe system only absorbs cost of 30 Kgs (as per standard UOM conversion) ie $300

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