Update Periodic Weighted Average

Explanation

The concept of periodic weighted average (periodic WA) means on a high level, that costs for material and time used in the process to purchase and manufacture parts should be the cost that actually been accounted for on deliveries to customer.

Prior to the periodic WA update, the accumulated price difference per part is summarized. The update then calculates a new periodic average, revalues beginning inventory and changes cost on historic transactions for the affected parts. The periodic WA background job is divided into two parts:

• Single-level periodic WA update, i.e., periodic WA for purchased parts, based on the cumulated price difference per part.
• Multi-level periodic WA update, i.e., periodic WA for multi-level manufactured parts, based on the remaining work in process (WIP) value on all shop orders that are closed during the period.

Note that the start date of a periodic WA update will be the same for subsequent periodic WA updates as long as an update of inventory statistics has not been performed or transactions has not been transferred to IFS Financials. This means that it is possible to update the same transactions several times. The new start date will be set when using either Aggregate Inventory Transactions per Period, or Transfer Inventory Transactions.

The fact that all transactions are updated with correct costs when a periodic WA update is performed (and not before) means that it is highly recommended not to transfer the periodic WA transactions to IFS Financials between the periodic WA updates. Transactions have to be transferred immediately after the periodic WA calculation has been performed. If you transfer transactions to IFS Financials between periodic WA updates, not all transactions will be considered in the update.

Note that parts not handled by periodic WA can also be affected (i.e., new cost variances can be created) by this update. This is the case when, for instance, the top part in a structure is not handled by periodic WA, while other parts in the structure are. The cost variance for the top part will then be affected.

Prerequisites

• At least one inventory part must have been set to use periodic WA.
• Normally, you should at least have matched one supplier invoice, and/or closed a shop order.

System Effects

In a periodic WA update, all transactions are updated with a correct periodic weighted average, i.e., postings for transactions are re-created using the new cost, and the beginning inventory is revaluated.

Refer to About Periodic Weighted Average for a more detailed description.

Window

Calculate Periodic WA

Related Window Descriptions

Calculate Periodic WA

Procedure

1. Open the Calculate Periodic WA dialog box. 
2. Use the List of Values to select the site you want.
3. Click OK.