Hi, I have set my store(s) to use the averageing system in options for items since the cost of items varies all the time. Can someone please tell me how RMS calculates the average and does it keep a list of different costs ina table somewhere per item or does it take the last known cost and the new one, average it and update the cost field with the new averaged value? Thanks in advance Dan
The only thing RMS keeps is the Last Cost and current Cost of each item. The way Weighted Average works is like this: i.e. ItemA has a current Qty of 10 and a current cost of $10. You have just receive 10 more items at a cost of $12.
WeightedAverage = (CurrentCost * CurrentQty) + (NewCost * NewQty) / (CurrentQty + NewQty) WeightedAverage = ($10 * 10) + ($12 * 10) / (10 + 10) Your new cost for all 20 will now be $11.
What this gives you is a closer representation of the total cost of goods in your inventory.
Rob
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