Inventory UOM Information

Items purchased from suppliers and how its issues from inventory is one of the most important aspect of inventory management both for quantity and cost. Our Inventory Module automates and controls the quantities and cost flowing in and out of inventory based on these variables. At a minimum, an inventory item requires an inventory Unit of Measure (1) , Purchase Unit of Measure (2) and a Package Qty (3) value (Previously called Conversion Ratio).

Terminology used in the article:
  • Inventory UOM– Identifies the UOM when dispensing from Inventory (normally the lowest UOM)
  • Purchase UOM –Identifies the UOM at the time of purchase from a vendor
  • Shipping Method – Does not affect inventory costing or quantity and therefore is currently irrelevant


How Microix utilizes these values to manage inventory and compute cost:

Widget 1
- Purchase UOM is Each
- Inventory UOM is Each
- Package Qty (Conversion Ratio) is 1

Warehouse Mangers orders and receives 20 Widget1 at a price of 2.99/unit. Microix records the following entries:
  • Quantity Received into Inventory is 20
  • Issuing cost for each inventory unit is $2.99

Widget 2
- Purchase UOM is Case (12 per case)
- Inventory UOM is Each
- Package Qty (Conversion Ratio) is 12

Warehouse Mangers orders and receives 20 Widget2 at a price of $15.99/case. Microix records the following entries:
  • Quantity Received into Inventory is 240 (20 case x 12 per case)
  • Issuing cost for each inventory unit is $1.33 (15.99/case divided by 12/units)


Widget 3 (Need to Issue in Milliliters of 25/50/100)
- Purchase UOM is Bottle (1000 ML per Bottle)
- Inventory UOM is ML (milliliters)
- Package Qty (Conversion Ratio) is 1000

Warehouse Mangers orders and receives 20 Widget3 at a price of $21.99/bottle. Microix records the following entries:
  • Quantity Received into Inventory is 20,000 (20 Bottles x 1000ML per bottle)
  • Issuing cost for each inventory unit is $.022 (21.99/bottle divided by 1000ML)



Creation date: 12/17/2018 12:09 PM     Updated: 12/17/2018 10:15 PM
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