Currently, the cost that is pulled into Purchase Order Entry for PO's that are Auto Reordered or Auto Generated does not follow the MAS 90/200 Cost Hierarchy. It appears that Auto Generate uses the Vendor Last Cost, and Auto Reorder uses the Item Last Cost.
The cost pulled into Purchase Order Entry should be the same cost regardless of whether the PO was entered manually (which uses the Cost Hierarchy) or by Auto Generate or Auto Reorder Orders.
This will impove customer's production (user won't have to re-enter the costs in PO Entry) and cost accuracy.
by: John R. | over a year ago | Sales & Distribution
Comments
The cost on PO's created by the Auto Reorder program will use vendor price levels first if they are setup, which is the first step on the hierarchy. The Auto Generate Purchase Orders program, however, definitely does not follow the hierarchy and will not even recognize that vendor price levels exist, which means its not really a useful tool for distributors, many of which buy product based on a distributor's discount off MSRP. The only way to get the right cost in a PO in that case is to setup a "standard cost" vendor price level record for every item in your system. But yes, if you go to that effort, you still can't use some of the reorder tools and get a PO with a correct cost. The costing hierarchy for inventory and sales doesn't make sense to apply to purchasing anyway. For example, if you're on average cost valuation, the hierarchy puts the average cost in as the default in PO Entry. When will you ever pay your vendor an average price for an item???? The default cost in the PO module should be based on a hierarchy that is most likely to yield an accurate purchase price. That's a near universal need, regardless of the valuation method for the product you're buying. This is an area of the software that needs a lot of improvement in general.