Cost Management - EBS (MOSC)

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Interorg transfers - How to prevent average cost of an item in two inventory orgs from mixing during

edited Sep 19, 2017 5:02AM in Cost Management - EBS (MOSC) 2 commentsAnswered

Client has 4 OUs having one inventory Org each

Each unit can hold inventory belonging to another unit. Typical business case is as follows:

Unit A may have insufficient raw material storage capacity and may do inter-org transfer of the item to Unit B to hold its stock until required for consumption

Requirement:

Item rates should not mix.

A Raw material item such as cotton is used in all 4 orgs. When an item qty is transferred from Org A to Org B for storage, and then from Org B back to Org A for consumption, the rates get averaged out. This causes distortion in the accounts (Stock valuation and COGS) of both Orgs involved.

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