Inventory with zero value
In this blog I would like to show a way of how to keep inventory of the same product in a site, but parts of the inventory have zero value. There might be different use case for that, e.g.
- Some quantities need to be scrapped, but I still want to see the quantity on stock
- Inventory is not owned by me, but in my site
The idea is as follows: inventory valuation can be done either on business residence (site) or on product specification level. Since I want to keep valued and non-valued stock in the same site I will use a product specification instead, to model the zero-valued stock. However since product specification usage always means identified stock (iStock) management (…) I will use the ‘Option Specified Stock’ setting in the product master. By this I am not forced to manage iStock in my normal transactions but only in case I want to manage the zero-valued stock.
In the following you find a step-by-step explanation of how to set this up:
- Set the ‘Identified stock type of the product to ‘Optional specified Stock’
- Set the valuation level type of the product to ‘Product Specification’
- Maintain the standard inventory costs for the product. In this example I set the costs to 20 USD.
- Create the product specification master data in the product development work center to reflect the ‘zero value’ part of the product. You do not need to assign this product specification to a product. By this you can reuse the product specification for multiple different products. Release the product specification, so that it can be used in the processes.
- In the valuation tab of the product master there is a button called ‘Maintain Product Specification Valuation’. Press the button and add a line with zero value for the corresponding product specification. You have to do this for every business residence, where you want to store zero-value inventory.
- Create an iStock master record in the ‘Warehouse and Logistics Master Data’ work center for the product referencing to the product specification. I recommend to name the iStock the same as the product specification.
- Now do some inventory postings with and without reference to the iStock. As a result in the valuated stock overview (Physical Inventory work center) you see two lines for the product, one with a value and one without a value.