Inventory and Production cost issues

[jennyYTSPP]

In our production process we often ship or consume inventory while the Production Order is in progress. As more quantities are produced, the cost of each production gets updated over time. However, the consumption and shipping inventory movements are not updated with the latest cost, causing inaccuracies in our production costs.

Example:

• 1 unit produced on day 1, with cost 10
• this unit was consumed in day 2, with cost 10
• 1 additional unit produced on day 3, with cost 5
  • this results in an average cost of 7.5 for each unit
• this additional unit was consumed in day 4, with cost 7.5
• in the end, the inventory value is not accurate because the unit consumed in day 2 was consumed with cost 10, instead of 7.5

The only way to have accurate data is ensure that intermediary goods are consumed in the final assemblies after the Production Orders for those intermediary goods have been completed, which is not feasible for us.

[andrade_david]

Thank you for your idea, @jennyYTSPP 

Beware I've made some edits to your original text, let me know if you have any remarks on what has been changed.

[jennyYTSPP]

Hello andrade_david,

Thank you for the edits, the only thing I do not understand is "The only way to have accurate data is ensure that consumptions only occur after production has been completed". I was under the impression all consumptions need to be done prior to completing productions.

[andrade_david]

Thank you for catching it, @jennyYTSPP. I was referring to the consumption of intermediary products on the Production Order for the finished good. Let me know if you have any feedback on this version:

"The only way to have accurate data is ensure that intermediary goods are consumed in the final assemblies after the Production Orders for those intermediary goods have been completed, which is not feasible for us."