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1.  How to contol inventory on expense items

Posted 4 days ago

Good Morning, I have a best practice question.

We are a label manufacturing company. We create production orders that have BOMs (Bill of Material). The BOM calls out face stock (paper), the color of inks, core size, packaging materials (poly bags, shrink wrap, type of box).

The issue we are having is negative inventory is being created on inks when production orders are being closed out. Our inks are expensed. We do not manage inks through MRP we use a visual inventory management system. However, we need to have the BOMs call out which inks to use for each job. 

Is there a best practice for setting up items in BOMs that are expensed so inventory is not relieved?



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Heidi Lymanstall
CMC Group
Bowling Green OH
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2.  RE: How to contol inventory on expense items

Posted 4 days ago
​My first thoughts are more questions.   Is the ink an inventoried item (item in the item master) or a category?   When you say expensed, how in AX are you doing this?  Direct from the PO?    You also mentioned the ink is going negative.   Does the ink get received into inventory?   If so, there should be some inventory from which to pull.   And that is before getting into costing....

Those questions aside, could you use the route to relay this?   Are the routes specific enough to use the route description as a means to communicate which inks to use?




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Dan Liebl
Sr. Consultant
Stoneridge Software
Minneapolis MN
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3.  RE: How to contol inventory on expense items

TOP CONTRIBUTOR
Posted 4 days ago
Hi Heidi,
If you do not need to track inventory in the system, you can setup the item with an Item model group that has "Stocked product" enabled but then create the expense items as type Service. This allows them to be entered on BOMs without tracking in inventory. I have a lot of clients who use this practice and i did myself as an end user for packaging material which we didn't track in the system.

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Andrew Lencsak
Senior Application Consultant
eBECS
Atlanta GA
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4.  RE: How to contol inventory on expense items

TOP CONTRIBUTOR
Posted 3 days ago
Andrew - can you explain more how setting the item as "service" removes it from inventory tracking?

My understanding that an item would generate inventory transactions if it is flagged as "inventoried" item.
How does the selection of service/item affect the behaviour of the product in the system?

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Zvika Rimalt
Functional Consultant
Vancouver BC Canada
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5.  RE: How to contol inventory on expense items

SILVER CONTRIBUTOR
Posted 3 days ago
​We use a lot of water on our formulas. That's obviously non-stocked and essentially unlimited. Like you, we don't need or want to have it as an inventory item, but it has to be in order to show up with quantities to use on our formulas.

We simply put a ridiculous number of pounds into inventory at $0 cost for it, and will replenish when necessary with an inventory adjustment.  Given a tiny bit of extra planning, we probably should have put the water in it's own group so it could be easily excluded from our inventory reports, rather than including it in our normal raw material group, but that's water under the bridge now. :)

We have some items that we expense, but do track inventory for. For those, we'll have 2 lines on the purchase order. The first line is for the stocked item, where we received the quantity at no cost. On the second line, we'll have the corresponding non-stocked expense item, which we receive a quantity of 1 and all the cost.

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Steve Latta
Accountant
Ortec, Inc.
Easley SC
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6.  RE: How to contol inventory on expense items

TOP CONTRIBUTOR
Posted 3 days ago
It would generate inventory transactions but there would never be any on hand inventory. It would also affect purchase expenditure, these blogs explain some of the scenarios and behavior:
Service item posting - Microsoft Dynamics AX Community Forum

https://blogs.msdn.microsoft.com/dynamicsaxscm/2011/06/01/service-products-in-microsoft-dynamics-ax-2012/

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Andrew Lencsak
Senior Application Consultant
eBECS
Atlanta GA
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