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1380910 - What Is the Purpose of the AvgPrice Field in Item MD?

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Symptom

What is the purpose of the Item Cost (AvgPrice) field on the Inventory Data tab of the Item Master Data for a standard price item when item cost and inventory are managed by warehouse?

 

Solution

System behavior before SAP Business One 9.2:

When Manage Item Cost per Warehouse is selected (Administration → System Initialization → Basic Initialization) the Item Cost column is displayed in Inventory → Item Master Data → Inventory Data tab → Warehouse matrix.

The valuation method of an item is defined in Inventory → Item Master Data → Inventory Data tab → field: Valuation Method (OITM, EvalSystem).

When the valuation method selected is Standard, an additional field is displayed under the EvalSystem field; this field is for Item Cost(OITM, AvgPrice). At first glance it appears illogical that this field is displayed since item cost prices are defined for each warehouse individually.

The purpose of this field becomes clear when the In Stock quantity in each warehouse goes to zero. Then this field becomes active and editable.
Entering a value and pressing the Tab key triggers the display of the system message: Update the item cost for all warehouses? Yes/No.

    • Choosing Yes updates the Item Cost field in the matrix for each warehouse with that value (OITW, AvgPrice), thus facilitating an easy global update of standard item cost for all warehouses.
    • Choosing No allows manual updating of the item cost for each warehouse individually. Once all item costs for that particular item have been completed, choose the Update button to save the changes to the permanent file.

Note:

This system behavior has been changed from SAP Business One 9.2. Please check KBA 3480207 - From SAP Business One 9.2, Standard item cost update via Inventory Revaluation document only for more information.

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