Valuing Inventory Cost
The costing engine determines stock value and issue cost under a company-wide valuation method.
Weighted average cost
This is the default method. At each receipt, the system combines existing stock value with the new receipt value and divides by the new total quantity.
- Issues use the current weighted average as unit cost.
- Stock value updates automatically with movements.
First in, first out
The system creates a cost layer for every stock increase, then consumes the oldest layers first until an issue is fulfilled.
- An issue cost may blend more than one layer.
- Fully consumed layers are hidden by default but can be included for review.
Change the method
One method applies across the company. To allow later switching, the system retains cost layers for every increase even while weighted average is active.
- Available choices are weighted average and FIFO.
Valuation reporting
View an item's cost, quantity, and value, or analyze total inventory valuation grouped by product, warehouse, or category.
- Zero-quantity items are excluded from valuation.
- Results can be narrowed by warehouse, category, or product.
