Understanding Item Cost Information

You must provide cost information for items in order to track inventory costs. Cost information determines:

• Whether the system maintains one overall cost for the item or a different cost based on branch/plant.

• Which cost method the system uses to track inventory costs.

• Which cost method the system uses for purchase orders.

You can also add prorated setup costs for manufacturing.

For each cost method that you assign to an item, you must also specify a cost. For example, to use the last-in cost method for an item, you must enter an initial cost for that cost method. The system updates the last-in cost based on the cost of the item as of the last receipt date.

The JD Edwards EnterpriseOne Inventory Management system, with its variety of cost bases, can also help you maintain appropriate valuation of the inventory. Various methods of valuation can help you take into account differences in value resulting from:

• Age

• Changing costs

• Design changes

• Technology changes

The system stores inventory cost records in the Cost Ledger File (F4105).