Maintain Inventory Definition – A summary of the activity

Financial transactions form the basis of cost analysis and hence the need to capture cost centers at the time of financial postings becomes inevitable. Purchase, Sales and Inventory transactions will derive and cost centers by a mechanism addressed in this business component.

Through this activity, inventory transactions derive the cost centers for the inventory account. Cost center rule can be defined for the inventory account using the mandatory parameters or for a set of additional parameters.

Some illustrations are:

Illustration 1

The following example illustrates an inventory cost center definition with mandatory and additional parameters

Definition I, illustrates the definition for the mandatory parameters: for company: “TestComp”, its finance book: “TestFB”, the event: “Adjustment” and the account: 900008 (which could be an expense or a consumption account). Any transactions posted to the account 9000008 for TestComp, TestFB and Adjustment from 01 Jan 02 will update the cost center CC1.

Definition II, illustrates the definition for additional parameters: for company “TestComp”, its Finance book “TestFB”, event “Adjustment” and Account 900008, a cost center rule can be defined by selecting additional parameters as “Yes”. For definition II, cost center and effective from date are specified along with the additional parameters as shown in the illustration below:

Illustration 2

The following example illustrates an inventory cost center definition with additional parameters.

Company – TestComp, Finance book – TestFB, Event – Adjustment and Account - 900008

For company “TestComp”, finance book “TestFB”, event “Adjustment”, account 900008, the table shows an illustrative list of additional parameters such as Item type, Item group, Item Code, Requester etc.  For each definition, a cost center has been specified with an effective from date

In Definition I, the additional parameters: item type “Raw Material”, requestor “E001” and for all the item groups defined for inventory costing, item codes and the corresponding variants mapped to these item groups, have been mapped to cost center CC1. This definition is valid from 01-Jul-02.

In Definition II, the additional parameters:  item type “Raw Material”, requestor “E001” and specific item group IG1, item code I001 and the variant IV001, have been mapped to the cost center CC2. This definition is also valid from 01-Jul-02.

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