How Cycle Count Approval Tolerances Are Calculated

This topic discusses how cycle count approval tolerances are calculated.

Settings That Affect Approval Tolerances

You specify values for these settings on the Define Classes and Items and Define Schedules and Approvals pages:

• Positive Quantity Tolerance Percentage and Negative Quantity Tolerance Percentage: Limits that you define for the positive and negative difference between the actual cycle count quantity and the tracked on-hand quantity.

• Positive Adjustment Value Tolerance and Negative Adjustment Value Tolerance: Limits that you define for the total value of a cycle count adjustment.

How Approval Tolerances Are Calculated

Approval tolerances are first calculated using class- and item-level values that you specify on the Define Classes and Items page. If you don't specify values on the class and item level, approval tolerances are calculated using values that you specify on the Define Schedules and Approvals page.

Example: Calculating Approval Tolerances

This table provides examples of values for quantity variance and adjustment value tolerances for one item in a cycle count.

Item Attributes	Value
Item Standard Cost	$10.00
Positive Quantity Tolerance Percentage	5%
Negative Quantity Tolerance Percentage	10%
Positive Adjustment Value Tolerance	$200
Negative Adjustment Value Tolerance	$250

Using the values from the previous table, the following table provides examples of four different count scenarios for the item, and the tolerances that each different scenario violates.

Application On-Hand Quantity	Count Quantity	Quantity Variance	Adjustment Quantity	Adjustment Value	Tolerance Exceeded
100	106	+6%	+6	+$60	Positive Quantity Percentage
100	88	-12%	-12	-$120	Negative Quantity Percentage
100	122	+22%	+22	+$220	Positive Quantity Percentage and Positive Adjustment Value
100	73	-27%	-27	-$270	Negative Quantity Percentage and Negative Adjustment Value