Purchasing for Inventory

The company might manage an inventory or stock-based operation, which includes:

• Retail items for sale to customers.

• Items for internal consumption.

• Manufactured items.

• Repair and maintenance items.

You must use the purchasing for inventory method to purchase goods for a stock-based environment. This method enables full integration between the JD Edwards EnterpriseOne Procurement system and the JD Edwards EnterpriseOne Inventory Management system. You purchase items based on the item numbers that exist in the JD Edwards EnterpriseOne Inventory Management system. The JD Edwards EnterpriseOne Procurement system:

• Validates that items exist in the JD Edwards EnterpriseOne Inventory Management system.

• Retrieves item information such as item descriptions, units costs, and units of measure from the JD Edwards EnterpriseOne Inventory Management system.

• Updates item information such as on-hand balances, and unit costs in the JD Edwards EnterpriseOne Inventory Management system.

In a stock-based environment, item costs are classified as inventory on the balance sheet until you issue the items out of inventory. If you sell the items, they become cost of goods sold. If you use the items internally, you determine the expense account to which to charge the items at the time of issuance.