AX2009_ENUS_TL1_02

Chapter 2: Inventory

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CHAPTER 2: INVENTORY Objectives

The objectives are:

• Set up an Item group • Determine posting types associated with item groups and investigate

what they are used for • Set up an inventory model group and state the effect of different

parameter settings in the groups on items • Set up a Dimension group • Work with the Inventory dimensions form • Create item dimension combinations • Set up Inventory management parameters • Create an item and state the effect of setting in the Items form on the

item • Set up default order settings • Set up Units of measurement and Unit conversion • Set up a Warehouse and attach it to an item • Set up Item pricing, automatic updates of item prices and Costing

versions

Introduction Inventory discusses creating and setting up new items. Creating new items is performed through the Inventory management module. All item-based data that is created in this module is used by the company accounts for purchases, sales, warehouse management, quality management, inventory journals, production, and projects.

When you create a new item in Microsoft Dynamics® AX 2009, you must, as a minimum, specify the following settings:

• Item number • Item group • Item type • Inventory model group • Dimension group

Microsoft Official Training Materials for Microsoft Dynamics ® Your use of this content is subject to your current services agreement

Trade and Logistics I in Microsoft Dynamics® AX 2009

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This course covers the setup of these mandatory item setup elements and identifies how different settings affect item behavior. Additionally, it covers several non-mandatory setup elements that are important to item creation such as warehouse setup, unit conversion, and item pricing.

Item Groups In every Microsoft DynamicsAX 2009 implementation, you must set up at least one item group, because it is a prerequisite for creating a new item.

Consider the structure of item groups carefully before you continue with the setup, because as soon as an item group has been created and used (meaning transactions have been posted against the item group), the item group cannot be deleted.

Item groups serve three main purposes in Microsoft Dynamics AX 2009:

• Post each item group to different general ledger accounts. • Use item groups for retrieving sales and purchase data on groups of

products. • Use item groups to report detailed financial information, queries, and

create other ad hoc reports.

To create an Item group, click Inventory management > Setup > Item group. Specify which accounts from the Chart of accounts to use for the various account types in each area.

Overview Tab

View the following fields on the Overview tab:

Field name Description Item group Identifying code for the Item group

Name Descriptive name for the Item group. For example, the name that is used on reports



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FIGURE 2.1 ITEM GROUP FORM - OVERVIEW TAB

Sales Order Tab

The Sales order tab shows the accounts that are used for sales order related posting for the item group.

FIGURE 2.2 ITEM GROUP FORM - SALES ORDER TAB



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The Sales order tab contains the following field groups:

• Packing slip • Commission • Invoice • Sales tax

Sales Order Tab - Packing Slip Field Group

The Packing slip field group contains the following posting accounts that are used for sales order packing slip posting:

• Packing slip: Transactions are generated in this account when the item is packing slip updated (issue). Verify the following for posting to occur: o Post physical inventory in the inventory model groups attached

to the item must be selected. o Post packing slip in ledger in Accounts receivable, Setup,

Parameters is selected. o Posting in ledger can be done periodically by using the Post

estimates periodically parameter in Inventory management, Setup, Parameters, General tab.

• Packing slip offset: Transactions are generated in this account when

the item is packing slip updated (consumption). Parameter setup for the item inventory model group and Accounts receivable Parameters must be the same as for packing slip posting to post to this account.

Sales Order Tab - Invoice Field Group

The Invoice field group contains the following posting accounts that are used for sales order invoice posting:

• Issue: Involves posting issues from inventory, usually a status account. The account is credited by selling the item at the item cost price multiplied by its quantity. This account is also known as the inventory account.

• Consumption: Involves posting item consumption. Posting is usually to a profit and loss account. The account is debited by selling the item at the item cost price multiplied by quantity and offsets the Issue account.



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• Revenue: The item sales price multiplied by the quantity, excluding tax, is credited in this account when the sales order is invoice updated.

• Discount: If an account is specified for line discounts, sales are posted before the line discount is deducted, and the line discount is debited in Discount. If no account is specified for line discounts, Revenue minus the line discount is posted, and the line discount will not appear directly in an account in the ledger. This account segregates discount amounts into a separate General ledger account. Using this account facilitates tracking of the value of discounts granted, and provides data with which to better gauge the price of goods sold.

Sales Order Tab - Commission Field Group

The Commission field group contains the following posting accounts that are used for sales order commission posting:

• Commission - If you calculate commissions when posting the invoice, the system debits the commission in this account.

• Commission offset - If you calculate commissions when posting the invoice, the system credits the commission in this account. This account segregates the amount of the invoice paid out in commissions. In this manner, the amount to be paid in commissions is immediately offset from the invoice.

Sales Order Tab - Sales Tax Field Group

The Sales tax field group contains the Item sales tax group field. This is where you specify a default item sales tax group for items in the selected item group.



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Purchase Order Tab

The Purchase order tab shows the accounts that are used for purchase order related posting for the item group.

FIGURE 2.3 ITEM GROUP FORM - PURCHASE ORDER TAB

The Purchase order tab contains the following field groups:

• Packing slip • Invoice • Purchase tax • Credit note • Fixed receipt price

Purchase Order Tab - Packing Slip Field Group

The Packing slip field group contains the following posting accounts that are used for purchase order packing slip posting:

• Packing slip: Use this account for posting expected revenue when you are updating packing slips. When the item is received, this account is debited with the packing slip update. Posting to this account occurs if: o Post physical inventory in the inventory model group attached

to the item is selected. o Post packing slip in ledger in Accounts payable, Setup,

Parameters is selected.



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The transactions are based on the item's cost price at the time of the update.

• Packing slip offset: Use this account for offsetting posted expected revenue when you update packing slips. When the item is received, this account is credited with the packing slip update. The same inventory model group and Accounts payable Parameters apply to posting to this account as they do for Packing slip posting. The transactions are based on the item's cost price at the time of the update.

• Packing slip purchase, Packing slip purchase - offset and Packing slip tax - Use these posting types to accrue vendors’ receipts, eventually separating projected tax from received not yet invoiced.

Purchase Order Tab - Invoice Field Group

The Invoice field group contains the following posting accounts that are used for purchase order invoice posting:

• Receipt: When the purchase is invoice-updated, the item's realized cost is debited in the account, and credited in the vendor summary account based on the posting setup in the Accounts payable module.

• Discount: Depending on whether an account is specified in this field, the posting occurs in different ways: o If an account for line discounts is specified, then the value of the

inventory receipt is debited in the Receipt field before the line discount is deducted and the line discount is credited separately in this Discount account.

o If no account is specified for line discounts, the inventory receipt is posted after deduction of the discount and the discount will not appear directly in a ledger account.

• Charge and Stock Variation: Charge and Stock variation enables

you to post stock movement through a profit and loss account before capitalizing it in inventory. This offers the benefit of having a footprint in the profit and loss account of the stock variation that occurs during a fiscal period.

• Fixed asset receipt: Enter the account number to use for posting the receipt of items in this group. This account is updated when you post an invoice with an assigned fixed asset, and the system is set up to not post an acquisition transaction for the asset when you post the invoice.

Purchase Order Tab - Purchase Tax and Credit Note Field Groups

The Purchase tax field group contains the Item sales tax group field. This is where you specify a default item sales tax group for items in the selected item group.



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The Credit note field group contains the following posting accounts that are used for purchase order credit note posting:

Consumption - Use this account to post item consumption for a purchase credit note, where the cost price differs from the purchase price. To use the account, you must have selected the Post financial inventory parameter in the item's inventory model group. This account is helpful when you use Standard cost as the Inventory model group.

EXAMPLE: You purchase an item for 500 U.S. Dollars (USD). Later, when you return it, the Standard cost is 520 USD. The variance of 20 USD would be posted to this account.

Purchase Order Tab - Fixed Receipt Price Field Group

The Fixed receipt price field group contains the following posting accounts that are used for posting with purchase orders:

• Fixed receipt price profit • Fixed receipt price loss • Fixed receipt price offset

Use these accounts when purchasing items if Fixed receipt price is selected for the Inventory model group and the purchase price differs from the standard cost price listed in the Item table.



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Inventory Tab

The Inventory tab shows the accounts that are used for inventory-related posting for the item group.

FIGURE 2.4 ITEM GROUP FORM - INVENTORY TAB

The Inventory tab contains the following field groups:

• Inventory • Inter-unit offset • Fixed receipt price • Fixed assets • Variance

Inventory Tab - Inventory Field Group

The Inventory field group contains the following posting accounts that are used for Inventory journal posting:

• Receipt and Issue - Use Receipt and Issue to post item receipts and item issues in the inventory journals.

• Profit and Loss - Use Profit and Loss to post item profit and item loss in the inventory journals. When you use counting journals, the account number must be specified for the inventory schedule to be posted.



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Inventory Tab - Inter-unit Offset

The Inter-unit payable and Inter-unit receivable accounts are used to post profit or loss incurred when you transfer between item dimensions within the same site, and between sites.

Profit or loss can occur when different item dimensions have different costs, or if different sites have different costs for the same item.

Inventory Tab - Fixed Receipt Price

The Fixed receipt price field group contains the following posting accounts that are used for posting inventory:

• Fixed receipt price profit - Account for posting gained difference in relation to fixed receipt price.

• Fixed receipt price loss - Account for posting lost difference in relation to fixed receipt price.

Inventory Tab - Fixed Assets and Variances Field Groups

In the Fixed asset issue field, enter the account number to use when you issue items in this group. This account is updated when the asset acquisition is posted, either through invoice posting or an acquisition proposal.

The Rounding variance field is where you set up the account for posting standard cost rounding variances.

Production Tab

The Production tab shows the accounts that are used for production-related posting for the item group.



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For production orders, transactions are generated for both the component raw materials, and the produced bill of materials.

FIGURE 2.5 ITEM GROUP FORM - PRODUCTION TAB

The Production tab contains the following field groups:

• Items in process • Costing

Production Tab - Items in Process Field Group

The Items in process field group contains the following posting accounts that are used for process posting in Production:

• Picking list and Picking list offset account - When a production order is started, or physical item consumption is registered for the production order, issue transactions for the component items are created, and item consumption is posted in Picking list, Issue account, and Picking list offset account. The cost price of the raw materials is calculated according to standard rules for issues.

• Report as finished and Reported as finished offset account - When production orders are reported as finished, receipt transactions are generated for finished items, and the items’ calculated cost price is posted in Reported as finished (receipt account), and Reported as finished offset account.



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Production Tab - Costing Field Group

The Costing field group contains the following posting types with regard to costing and production:

• Issue and Issue offset account - When you cost account production orders with End date of job selected, the four accounts that were mentioned earlier are reset and the actual consumption of raw materials is credited to Issue and debited from Issue offset account.

• Receipt and Receipt offset account - The cost price of the finished item is debited from Receipt and credited to Receipt offset account. When the standard cost price is used for the finished item, these transactions are made at standard cost price.

Setup Tab

The Forecast field group contains the following account:

Default item allocation key - Select the user-defined allocation key to serve as the proposed standard key when you create forecasts for the item group. Item allocation keys are created in the Item allocation keys setup of the Master planning module.

FIGURE 2.6 ITEM GROUP FORM - SETUP TAB



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Item Group Buttons

The following buttons are available in the Item group form:

• Posting - Click the Posting button to view the Inventory posting form on the selected item group.

• Forecasting - Click the Forecasting button to access the Sales, Purchase, or Inventory forecast forms on the selected Item group.



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Lab 2.1 - Locating Inventory Posting Accounts Contoso Entertainment Systems - Company CEU

Scenario

You are the new accounting clerk for Contoso Entertainment Systems. You have been asked by your manager to determine, in Microsoft Dynamics AX 2009, the tabs and field names on which the posting account numbers must be entered.

Determine the following:

• Costs associated with a sales order at the point of packing slip update.

• The commission paid to a salesperson after a sale has been completed.

• Discounts granted on sales orders. • Costs associated with a purchase order at the point of packing slip

update. • The variance in the amount an item was sold for compared to the

cost of the item at the time that it was returned.

Challenge Yourself!

In Microsoft Dynamics AX 2009, locate the information described in the scenario.

Need a Little Help?

• Posting account numbers are defined in Inventory management > Setup > Item groups.

• Sales posting accounts are defined on the Sales order tab. • Purchase posting accounts are defined on the Purchase order tab.

Step by Step

1. From the Navigation pane, click Inventory management >Setup > Item groups.

2. Click the Sales order tab and note the content of the Packing slip field.

3. Also, on the Sales order tab, note the content of the Commission offset field.

4. Also, on the Sales order tab and note the content of the Discount field.



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5. Click the Purchase order tab and note the content of the Packing slip field.

6. Click the Sales order tab, and note the content of the Consumption field.

7. Close the Item group form.



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Inventory Model Groups Inventory management > Setup > Inventory > Inventory model groups

Inventory model groups are an important part of calculating inventory values and determining how the item is posted to the General ledger. Inventory model groups contain settings that determine how items are controlled and handled upon item receipt and issue.

Inventory model groups help determine:

• The calculation of cost prices and item consumption. • If physical and financial negative inventory is permitted. • If inventory transactions are to be posted to the General Ledger. • The workflow used when you send or receive items. • The reservation rules, when you create sales order lines for items

where some or all of the quantity of the item has the status Ordered.

The setup of an item's inventory model group is important when you determine how the item will integrate with other areas of the Microsoft Dynamics AX 2009 system. Not all fields are covered in this lesson as they apply to other areas of the system which will be covered in other Trade and Logistics courses.

FIGURE 2.7 INVENTORY MODEL GROUPS FORM



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Inventory Model Tab

Inventory is closed and recalculated according to the rules of the selected Inventory model. The choices are:

• FIFO • LIFO • LIFO date • Weighted Average • Weighted Average date • Standard Cost

Learn more about Inventory models in the Microsoft Dynamics AX 2009 Inventory Costing and Valuation course.

Setup Tab

The Setup tab of the Inventory model groups form has five field groups.

• Negative inventory • Warehouse management • Ledger integration • Physical update • Reservation

FIGURE 2.8 INVENTORY MODEL GROUPS FORM - SETUP TAB



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Setup Tab - Warehouse Management Field Group

The Warehouse management field group is where you set up and maintain parameters for the selected inventory model group's warehouse management. It contains two parameters:

• Quarantine management • Consolidated picking method

Quarantine Management

Select the Quarantine management check box to indicate that items attached to this group are under quarantine management rules and requirements. This is used for items set aside that are waiting for approval for reception into the physical inventory. If the check box is clear, items will not be under quarantine management unless a quarantine order is created manually in Quarantine orders. When the item is registered, a quarantine order is generated with the status of Started.

Consolidated Picking Method

With the Consolidated picking method check box you can pick multiple orders and use picking areas and shipment functionality.

Setup Tab - Negative Inventory Field Group

The Negative inventory field group determines whether Physical or Financial negative inventory will be permitted. It contains the following two parameters:

• Physical negative inventory • Financial negative inventory

Setup Tab - Physical Negative Inventory

Select the Physical negative inventory check box to help you sell an item even though you have no stock. This parameter is sensitive for inventory value calculation. The decision whether to select or clear this parameter must be taken with the utmost care to prevent incorrect use of the functionality.

EXAMPLE: There is usually a time lag between arrival of items in the warehouse and when the purchasing department updates the received item's packing slips. When visiting the warehouse, you can notice that the items have arrived for your purchase order, even though it is not a part of your warehouse in the system. If the item's inventory model group has Physical negative inventory selected, you can deliver the item even though it has not yet been registered as being physically present in the inventory.



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Setup Tab - Financial Negative Inventory

When the Financial negative inventory check box is clear, you are prohibited from selling stock, although physically available, if there is no financially updated on-hand inventory for the item. Depending on how the system is used, this typically means that an invoice must first be posted before selling stock is permitted. When this field is selected, negative financial inventory is enabled and the user can sell items without knowing the real cost price. The invoice of these items might be posted after the items are sold and then an inventory closing has to adjust the cost prices to the real cost prices. This setting is frequently used for services.

NOTE: If the Financial negative inventory check box is selected, you should also enter a cost price on the item. Otherwise, your temporary average cost price on sales order line/production line will be zero until the closing/recalculation of the inventory finally settles the issue. Enter the cost price in the Cost price field on the Price/Discount tab in the Items form. If you select Use combination cost price in the Items form, the system will enter the cost price in the Cost price tab in the Combinations of item dimensions form. To find this form from the item, click Setup > Combination of item dimensions.

Examples - Financial Negative Inventory

The following two examples show situations where you select the Financial negative inventory parameter for the inventory group attached to an item:

Example 1

There is a vendor that you frequently deal with. They invoice you, without fail, one week after you have received delivery of the goods and notified them of the delivery. You attach all items from this vendor to an inventory model group that enables negative financial inventory because, although you have not financially updated the purchase, you will be doing this within the next seven days. Therefore, you can sell items that belong to this inventory model group immediately on reception and physical update, safe in the knowledge that the financial updating of transactions will occur within the next few days, creating minimum financial irregularity between the financial receipt and issuing of the items.

Example 2

In the item's inventory model group select the Financial negative inventory check box if you have to send the invoice to another department for verification but still want to be able to sell the item while you wait for final approval.



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Setup Tab - Ledger Integration Field Group

The Ledger integration field group determines whether inventory transactions are to be posted to the General ledger physically or financially and when they must be posted. The fields in this group are as follows:

• Post physical inventory • Post financial inventory • Post physical revenue • Post physical purchase

Setup Tab - Post Physical Inventory

The following table explains the effect of the Post physical inventory parameter when it is selected or cleared.

Selection status Implication Selected If this field is selected, physical item transactions are posted in the ledger

if: • The Post packing slip in ledger parameter is selected in the

Accounts receivable and/or Accounts payable Parameters form. • You are working with Bills of Material and the Post report as

finished in ledger is selected in Production Orders Parameters. NOTE: If you select this parameter, packing lists from purchases or sales are posted at cost price in the ledger. This means that the value of physically received, delivered, or floating items is not only reflected in the inventory, but also in the ledger. When the same purchase or sales invoice is updated, the transactions are reversed from the packing slip update.

Clear The Post Packing Slip in Ledger and Post report as Finished in Ledger updates are not posted in the ledger, regardless of the setup selected in the Purchase, Sales, and/or Production order parameters.

Setup Tab - Post Financial Inventory

The following table explains the effect of the Post financial inventory parameter when it is selected or cleared:

Selection status Implication Selected If this field is selected, the updated financial value of items is posted in

the ledger: • When a purchase order is invoice-updated, the value of the items is

posted to the inventory receipt account. • When a sales order is invoice-updated, the value of the items is

posted to the inventory issue and consumption accounts.



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Selection status Implication

Clear Purchases are posted to the item consumption account when the purchase is invoice-updated. No posting occurs in the inventory receipt account when purchases are invoice-updated. Similarly, no posting occurs in the item consumption account or the issue account when sales orders are invoice-updated. Additionally, when the check box is clear, records in the Movement and Profit/Loss Inventory journals will not generate ledger postings.

Setup Tab - Post Physical Revenue and Post Physical Purchase

Select the Post physical revenue parameter to post the expected revenue or turnover, with regard to updating the packing slip, in the General ledger module. Balance can figure both a realized and an expected contribution margin. This is typically used when a company recognizes revenue at the time of shipment instead of at the time of invoicing a customer. When the order is invoiced, the transactions are reversed from the packing slip.

Select the Post physical purchase parameter to post the estimated purchase for packing slip updates to the General ledger.

Setup Tab - Physical Update Field Group

The fields in the Physical update field group determine the workflow used when you send or receive items and you use them to set rules around how an order is handled, both for receiving and shipping.

The Physical update field group contains the following four parameters:

• Registration requirements • Receiving requirements • Picking requirements • Deduction requirements

Setup Tab - Registration Requirements

By selecting the Registration requirements check box, the user must register the receipt before inventory is updated through the packing slip on a purchase order. Register an item to record the item's physical presence at the company. However, the items are not yet part of the company's warehouse until they are physically updated with a packing slip update. Generally, this option is used with the Warehouse management functionality.



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EXAMPLE: Select the Registration requirement parameter to monitor the vendor performance or the reception of goods into the company. In this case, you must monitor the goods as soon as they arrive at the company.

Setup Tab - Receiving Requirements

When the Receiving requirements parameter is selected, item receipts must be physically updated before they can be financially updated.

A packing slip must be entered and posted before the corresponding vendor invoice can be posted. If there is a difference between the received quantity on the packing slip and the invoiced quantity on the invoice, an icon is shown in the Packing slip quantity match column in the Posting invoice form. Setup Tab - Picking Requirements and Deduction Requirements

When you select the Picking requirements parameter, item issues must have the status of Picked before inventory is physically updated. The item issue inventory transactions must have the status of Picked before the packing slip can be updated.

NOTE: Select the Picking requirements parameter with the warehouse management functionality when you use location management on the item and when shipments are collected by using picking routes.

When you select the Deduction requirements parameter, item deductions must be physically updated before they can be financially updated.

A packing slip must be entered and posted before the corresponding vendor invoice can be posted. If there is a difference between the deducted quantity on the packing slip and the negative invoiced quantity on the invoice, an icon is shown in the Packing slip quantity match column in the Posting invoice form.

Setup Tab - Reservation Field Group

The Reservation field group contains two parameters:

• Date-controlled • Backward from ship date

When selecting these parameters for the inventory model group you determine how Microsoft Dynamics AX 2009 makes reservations of the type Automatic, where no on-hand inventory or receipts with the status Received or Invoiced exists for the item but there are receipts with the status Ordered for the item.

Additionally, for these parameters to come into effect, the Reserve ordered items parameter must be selected in Inventory management > Setup > Parameters > General tab.



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Setup Tab - Reservation Field Group Definitions

The following table explains the Reservation field group parameters.

Parameter Effect Date-controlled and Backward from ship date (clear)

Sales order lines are reserved against the purchase order line with the lowest dimension number. For example, there are three receipts with the status of Ordered with batch numbers AA_0001, AA_0002 and AA_0003. As AA_0001 is the batch with the lowest alphanumeric identifier and is the batch that is reserved against for a sales order line.

Date-controlled (selected) Select Date-controlled and the lot with the earliest delivery date before the issue is selected to fulfill the issue, inventory is therefore handled according to a FIFO principle.

Backward from ship date (selected)

Select Backward from ship date and the purchase order line with the closest ship date before the issue is reserved for the sales order line.



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Lab 2.2 - Set Up an Inventory Model Group and Apply It to an Item

Contoso Entertainment Systems - Company CEU

Scenario

You have been asked to create an Inventory model group for an item Lab DVD Player that your company will sell within the month. As soon as you have created the inventory model group, create the new item, and attach it to that inventory model group.

You will also perform some purchase order and sales order transactions to explore how the inventory model group affects the behavior of the item when you create transactions.

Challenge Yourself!

1. Create the Inventory model group IMG.DVD. It must have the following features:

• You can only sell quantities of the item that are fully financially updated.

• Ensure that physical updates (packing slip updates) for the sales order are posted in the ledger.

• Items must be registered on receipt and picked on issue. • Accept the default settings for the inventory model group • The item must have the specifications outlined in the following table:

Setting Value Item number 170320

Item name Lab DVD Player

Item group DVD Player

Inventory model group IMG.DVD

Dimension group N-W

STOP HERE: The remaining steps in this lab, Challenge Yourself - Part 2, require skills you will gain after completing the Trade and Logistics I course. The rest of the lab is therefore a demonstration. The reason for the additional steps in the lab is to show the effect of parameter settings in inventory model groups when you create item transactions and posting updating. You may want to revisit this lab later, at which stage you can execute all the steps in the lab.



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1. Create a purchase order with vendor 1203 for ten pieces of item 170320 to be received at site 2, and warehouse 21.

2. Perform all the necessary stages to packing slip update the purchase order. Do not invoice update the purchase order yet.

3. Create a sales order for customer 2021, for five pieces of item 170320 from site 2, and warehouse 21.

4. Perform all the steps that are required to packing slip update the sales order.

5. From the sales order line click Inventory > Transactions > Ledger tab. Investigate if any posting has occurred in the ledger after the packing slip update.

6. Try to financially update the sales order. 7. Consider the following:

o The reason(s) why the sales order cannot be invoice updated? o The steps you must take to invoice update the sales order?

8. Take the steps that are required to financially update the purchase order and sales order.

Need a Little Help?

1. Click Inventory management > Setup > Inventory > Inventory model groups to create the Inventory model group as specified in the scenario.

2. Refer to the definitions of the various inventory model group parameters.

Step by Step

Challenge Yourself - Part 1

1. Click Inventory management > Setup > Inventory > Inventory model groups.

2. Press CTRL+N to create a new Inventory model group. 3. Type “IMG.DVD” in the Inventory model group field and the

Name field.. 4. Click the Inventory model tab. 5. Ensure that FIFO is selected as the Inventory model. 6. Clear the Financial negative inventory field on the Setup tab. 7. Ensure that the Post physical inventory and Post Financial

inventory fields are selected. 8. Select the Registration requirements check box. 9. Select the Picking requirements check box. 10. Close the Inventory model groups form. 11. Click Inventory management > Item details



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12. Click CTRL+N to create a new item. 13. Type “170320” in the Item number field. 14. Type “Lab DVD Player” in the Item name field. 15. Click the arrow in the Item group field, and select DVD Player 16. Click the General tab. 17. Click the arrow in the Inventory model group field, and select

IMG.DVD. 18. Click the arrow in the Dimension group field, and select N-W. 19. Close the Items form.


1. Create the first purchase order as specified in the lab description. 2. Register the items arrival by clicking Inventory > Registration and

then selecting the Auto-create check box to register the arrival of the item and then click Post all to complete the registration.

3. Click Posting > Packing slip and in the Quantity field select All. 4. Enter a number in the Packing slip field and then click OK 5. Create a sales order with customer 2021 for five pieces of Lab DVD

Player from site 2, and warehouse 21. 6. Pick the quantity of the item from the line, according to the

specification of the inventory model group, by clicking Inventory > Pick and then selecting the Auto-create check box and then clicking Post all.

7. Packing slip update the sales order by clicking Posting and selecting the sub-menu item Packing slip. In the Quantity field, select All and then click OK.

8. From the sales order line click Inventory > Transactions > Ledger tab. You will see the amount that has been posted to the packing slip account and the Packing slip account number is visible (check the Item group for DVD Player to cross reference this account number).

9. Try to invoice update the sales order by clicking Posting > Invoice and in the Quantity field selecting All. You cannot invoice update the sales order until a quantity of the purchase order receipt has been financially updated. This occurs because the Negative financial inventory parameter is clear for the item’s inventory model group. You can invoice update the sales order as soon as sufficient financially received on-hand inventory exists for the item. You must therefore invoice update the purchase order before you can invoice update the sales order.



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Dimension Groups Inventory dimensions are used to define the physical characteristics of inventory items. They control how items are stored and drawn from inventory and enable inventory to be managed on a detailed level. Inventory dimensions are split into item dimensions and storage dimensions.

The dimension group is a mandatory field in the Items form. However, if only a few dimension groups are used, include the dimension group in the item templates used when you create new items. In this manner, the dimension group does not have to be selected manually for each item being created.

Setting Up Dimension Groups

Inventory dimensions are used to:

• Determine the physical characteristics of an item • Determine how items are stored in inventory • Track inventory transactions • View on-hand inventory for each dimension • Link issues to receipts by using marking

The two types of inventory dimensions are:

• Item Dimensions • Storage Dimensions

NOTE: There are no set guidelines for selecting dimensions. However, you should only use the number of dimensions that will actually be used for each item. If some items are tracked, and other items are not, create several dimension groups. Carefully consider how inventory must function before setting up inventory dimensions and dimension groups. As soon as you have created transactions for an item attached to a dimension group you cannot make any additional changes to the dimension group.

Item Dimensions

An item dimension is used to determine item attributes, for example configuration, size, and color. The following table shows the item dimensions that are available.

Dimension Definition Size Size characteristic of an item.

Example: PB-Frame 10, 12, and 15.

Color Color characteristic of an item. Example: PB-Paint Black, Blue, and Chrome



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Dimension Definition Configuration A third identifying characteristic of an inventory item.

Example: Product model

The following rules apply to item dimensions:

• The dimension must be specified when you create item transactions, for example, when a purchase or sales order line is created.

• The specified dimension applies only to the item transaction. You can neither fully nor partly change the dimension value for the related inventory transactions upon physical issue or receipt.

• Items are always reserved for each dimension. You cannot reserve items for dimension values other than those specified on the actual item transaction.

Procedure: Create Item Dimensions and Specify Default Dimensions

To specify specific item dimensions for a particular item, for example, a range of colors or sizes:

1. Ensure that the dimension group attached to the item has the parameters for dimensions you want to specify for the item, in this case color, size or configuration.

2. Click Setup > Color/Size/Configuration. 3. In the Color form, specify the colors you want to associate with the

items.

Each time that you create a purchase order or sales order you can specify the item dimension value on the line.

You can also set up default item dimension values for the dimensions Color and Size that are automatically proposed every time that you create, for example, a purchase or sales order line for the item.

Scenario: Setting Up Default Item Dimensions

Contoso Entertainment Systems has been selling CRT Television model 02 for several years. The most popular model is the black model with a screen size of 17 inches. This accounts for 80 percent of the orders of the item.

To save work configuring the item to this popular combination of size and color, the sales manager has set this size and color up as the default item dimensions for the item.

Therefore, every time that a sales order line is created for CRT Television model 02 these dimension values are automatically proposed.



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Procedure: Set Up Default Item Dimension Values

To set up the default item dimension values for an item:

1. Click Inventory management > Item details. 2. Select the item for which you want to set up the default item

dimensions. 3. Click the General tab and in the Size and Color fields; specify the

size and colors you want to automatically use on order lines for the item.

Storage Dimensions

A storage dimension is used to determine where and how an item is stored. The following table shows the storage dimensions that are available.

Dimension Definition Warehouse Storage location, such as a building.

Site Site in a multisite enabled company.

Batch number ID for a group of related items like a container, pallet, or box of the same items.

Location Detailed item storage location, such as aisle-rack-shelf-bin. Typically, use this dimension when you operate with Warehouse management.

Pallet ID ID for a group of items on the same pallet. Only used when operating with Warehouse management.

Serial number Unique or non-unique ID for each item.

Dimension Groups and Items - Creation Guidelines

Each item must have an associated inventory dimension group. The dimension group determines the relevant dimensions and how and when they are used.

Although it is difficult to define a standard inventory dimension setup, there are some basic principles to be aware of when you set up inventory dimensions:

• Determine if the dimensions are relevant for the business. • Consider the relevance of each dimension for the various groups of

items before setting up dimension groups. • Only set up the number of dimensions that will actually be used for

each item. If some items are tracked, and other items are not, create several dimension groups.



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The Inventory Dimensions Form Inventory management > Setup > Dimensions > Dimension groups

The Inventory dimensions form is split into three panels:

• Dimension group ID • Item dimensions • Storage dimensions

FIGURE 2.9 INVENTORY DIMENSIONS FORM

The Dimension group ID panel provides an overview of all dimension groups set up in the system. You can add as many new inventory dimension groups as you need.

Item dimensions can be activated and set up in the Item dimensions panel.

Storage dimensions can be activated and set up on the Storage dimensions panel.



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Inventory Dimensions - Active

If the Active parameter is selected, the dimension is enabled for any items associated with the dimension group.

Example:

The dimension group is for items sold in different colors. Therefore, the dimension Color is selected as Active.

Inventory Dimensions - Primary Stocking

If the Primary stocking parameter is selected, it is mandatory that the dimension be entered before any physical updates.

If cleared, this dimension is considered secondary stocking. Primary stocking is also important with regard to how inventory is re-reserved.

Example:

An item requires full forward-backward traceability. This item will have Batch selected as Primary stocking.

Inventory Dimensions - Blank Receipt Allowed

If the Blank receipt allowed parameter is selected, Microsoft Dynamics AX 2009 accepts a blank value for the dimension at the physical update of a receipt.

NOTE: If you select the Primary stocking parameter for this dimension the Blank receipt allowed parameter is automatically cleared.

Examples:

1. The Contoso Entertainment Systems purchases high value projector lamps from a vendor. Although these lamps are delivered with a serial number the company does not register these when they receive items. However, ensure that the items have a serial number attached to them on issue. Therefore, the dimension group attached to this must allow blank receipts for serial numbers but will not allow blank issues for items attached to the dimension group when the items are sold or when items are consumed in a production order.

2. You might select Blank receipt allowed with collectors items. It might not be important for the distribution company to register a serial number upon receipt of items. However, it is important for the customer that they have an item with the specificity of a serial number.



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Inventory Dimensions - Blank Issue Allowed

If the Blank issue allowed parameter is selected, Microsoft Dynamics AX 2009 accepts a blank value for the dimension at the physical update of an issue.

NOTE: If you select the Primary stocking parameter for this dimension the Blank issue allowed parameter is automatically cleared.

Inventory Dimensions - Physical Inventory

If the Physical inventory parameter is selected the dimension is to be included in the physical inventory. Microsoft Dynamics AX 2009 checks the physical on-hand level based on the dimension value when the packing slip is created for issued items.

If the Physical inventory parameter is clear, the dimension is not considered when you make an issue for an item with the dimension group attached.

Example - Physical Inventory Selected

Thirty pieces of on-hand inventory for an item attached to the dimension group are distributed between:

• Warehouse GW = 20 pieces • Warehouse MW=10 pieces

Then you sell 30 pieces of the item from warehouse GW and now only 20 pieces are available at GW. Because the dimension setup requires that physical inventory be considered, even though there are an additional ten pieces at warehouse MW, an error is generated.

Example - Physical Inventory Cleared

Your warehouses are close to one another, or the cost of transferring the goods to the dispatch location is low. Therefore, you do not have to be precise about where the items are issued from if insufficient on-hand inventory exists at one warehouse location the remaining necessary on-hand inventory can easily be obtained from another location.

Inventory Dimensions - Financial Inventory

Select the Financial inventory parameter if the dimension is to be included in calculating the financial cost of an item sold. This flag ensures that you can control and track different cost prices for an item for the storage dimension, such as different prices in different warehouses, or for other types of dimensions.

If the Financial inventory parameter is cleared, the average cost of the item is distributed across all dimensions concerned.



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Example - Financial Inventory Selected

With the storage dimension, storage space in New York City is much more costly than warehouse space in Lisbon, Portugal. You have to account for the different costs of storage in calculating the cost of the item. Selecting this dimension enables you to track these costs.

Inventory Dimensions - Coverage Plan

Select the Coverage plan parameter if this dimension is to be included in coverage plans created through master planning. Selection lets you define criteria such as minimum/maximum, lead times and coverage groups for each dimension.

Example:

Many companies select to run master planning by warehouse. However, in some cases, it helps to run MRP based on a finer level of detail. This frequently occurs in companies that have slow moving or costly inventory. By selecting this check box, MRP will be calculated at the finest level of detail.

Inventory Dimensions - Use in Price Search

In addition to the parameters that you can specify on the Overview tab, on the General tab you can specify settings for the Use in price search parameters.

FIGURE 2.10 INVENTORY DIMENSIONS FORM - GENERAL TAB



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The following table describes the options in the Use in price search field group.

Field Function Description Purchase prices If selected, you can specify a purchase price or discount

for this dimension through trade agreements.

Sales prices If selected, you can specify a sale price or discount for this dimension through trade agreements.

In the Use in price search field group, the option of sales and or purchase price trade agreements can be enabled. If you have to set up a trade agreement or discount for a particular dimension, you can enable it here.

Demonstration: Use Price Search

This demonstration shows how to set up the dimension Color that is used in purchase price search.

1. Create a new dimension group named “Created”, with Color as an active item dimension and select the For purchase prices check box.

2. Create a new item 170210. Name the item Purchase price test and use Item group DVR.

3. Specify the new dimension group Created on the item. Specify the Inventory group FIFO.

4. Specify that the item is available in two colors; black and silver. 5. From the new item open Trade Agrmt. > Purchase prices. 6. In the Price (purch) form create one purchase price agreement with

vendor 1201. o Create a purchase price agreement for the color dimension black

for a price of 15.00 USD for each piece by selecting the color black and entering 1 in the Quantity field and 15.00 in the Price field.

o Create a purchase price agreement without specifying a color item dimension for 10.00 USD for each piece by entering 1 in the quantity field and 10 in the Price field.

7. Create a purchase order for vendor 1201. Create two lines with the

new item: one with color black specified, and one with color silver specified.

8. As the For purchase prices parameter is active, the line with color black specified on it has the price 15.00 USD whereas the other line receives the standard price undifferentiated by color of 10.00 USD.



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Inventory Dimensions - Serial Number Control

If the Serial number control parameter is selected, there must be one serial number for each item. If the parameter is cleared, a serial number is non-unique and can be assigned to more than one item.

Example:

You offer a warranty for all items. Therefore, it is important for traceability purposes that you have a unique serial number for each item you sell.

Inventory Dimensions - Editing Tab

The editing functionality under the Editing tab lets you change and specify the dimension when you create sales lines, purchase lines, inventory transactions and the other categories of transactions shown in the Allow entry field group.

FIGURE 2.11 INVENTORY DIMENSIONS FORM - EDITING TAB

When the Allow entry parameter is selected for a dimension, you have the option of changing the dimension when a new order is created. If it is cleared, you cannot edit the dimension.



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Scenario: Set Up Editing Dimensions

Your company wants to tightly control which warehouse receives certain items. For these items in the Purchase warehouse field in the Site specific order settings form, you specify GW, which is the warehouse where the item is received. You also attach a dimension group to the item which does not allow for editing for purchase order lines.

In this manner, whenever the purchaser creates a purchase order for this item the purchase order is always received into GW and the inventory dimension value GW cannot be changed to another warehouse.

Item Dimensions: Rename Tab

You can rename the two item dimensions Size and Color to suit the company's requirements.

FIGURE 2.12 INVENTORY DIMENSIONS FORM - RENAME TAB

Notice that the Configuration dimension cannot be renamed.

EXAMPLE: Your company uses the term Model instead of Size to distinguish items. You can rename the size dimension to Model.

NOTE: Dimension rename is global and affects dimensions in all dimension groups, not only the current dimension group.



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Procedure: Rename an Item Dimension

The following procedure shows how to rename an item dimension.

1. Click Inventory management > Setup > Dimensions >Dimension groups > Rename tab.

2. Click Rename. 3. Select the text that you want to rename and overwrite the old text

with a new text.

NOTE: If multiple languages are used, the dimension texts must be entered for each language. Renamed text(s) will be lost when you upgrade to a new version of Microsoft Dynamics AX. After confirming the new name(s), you must close all windows before the changes take effect.

Item Dimension Combinations Inventory management > Setup > Dimensions > Item dimensions > Item dimension combinations

Item dimensions are defined separately for each item when they have been enabled through the dimension group. The dimensions are entered in the following tables:

• Configuration • Size • Color

These are accessed through Inventory > Setup > Dimensions > Item dimensions or from the Setup button on the Items form.



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An item may have different sizes and colors but you may be unable to purchase and/or sell items in every combination of those dimensions. The available combinations must be created in the Combination of item dimensions form.

FIGURE 2.13 COMBINATIONS OF ITEM DIMENSIONS FORM

The Create Combinations button can help in creating the item dimension combinations for a new item. Combinations can be automatically created or manually added.

Procedure: Create Item Dimension Combinations

To create all dimension combinations automatically, follow these steps:

1. Click Inventory Management > Item details. 2. Select the item for which you want to have item dimension

combinations created. 3. Click the General tab. 4. Select Auto create combinations.

When you select the Auto create combinations parameter, every time that a new dimension is added, every combination is automatically created.

EXAMPLE: You create an item called Color Bulb, whose dimension group has the item dimensions Color and Size specified for them. Color Bulb is available in pastel and white and in 60 and 100 watt sizes. As you have selected Auto create combinations for the item, four item combinations were automatically created. The Contoso Entertainment Systems decides to sell the bulb in a low wattage 40 watt version. The 40 watt size is added to the size dimension for the item and two more dimension combinations for 40 watt pastel and 40 watt white are automatically created.



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Procedure: Create Combinations Manually

If you do not want all item dimension combinations, create the combinations manually.

To create item dimension combinations manually, follow these steps:

1. Create all the item dimensions that you need for the item. 2. Click Inventory management > Item details. 3. Select the item for which you want to create dimension

combinations. 4. Click Setup > Item dimension combination. 5. Click Create combinations. 6. Select the Select combination check box to create a combination of

item dimensions you can select, for example, from the sale or purchase order line.

Combination Cost Price

Combination cost price lets you use different pricing for different dimensions. For example, a vendor sells t-shirts with the following prices.

Cost Size Color Configuration 3.55 Small White 100% cotton

3.55 Medium White 100% cotton

3.55 Large White 100% cotton

2.85 Small White 80% cotton; 20% polyester

2.85 Medium White 80% cotton; 20% polyester

2.85 Large White 80% cotton; 20% polyester

3.75 Small Red 100% cotton

3.75 Medium Red 100% cotton

3.75 Large Red 100% cotton

If you use Combination cost price, these variations can be defined and then attached to the item, instead of requiring that a new item is set up for each combination.

Specify the item cost price for each dimension combination by selecting Use combination cost price on the General tab of the Items form. If this has been selected, the Cost price button on the Combinations of item dimensions form can be accessed and prices edited.



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Procedure: Specify Cost Price for each Item Dimension Combination

To specify a cost price for each item dimension combination, follow these steps:

1. Click Inventory management > Items. 2. Select an item on which there are item dimension combinations. 3. Click Setup > Item dimension combinations and then click the

Price button. 4. Enter the cost price information for the specific item dimension

combination in the Pending prices tab and then click the Activate button to apply it.

If you clear the Use combination cost price parameter, you cannot specify a cost price for each item dimension combination and the cost price for the item is used instead. Additionally, you cannot edit the cost price for each dimension combination.



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Lab 2.3 - Create an Inventory Dimension Group Contoso Entertainment Systems - Company CEU

NOTE: At the end of this lab, please rename the Dimension that you change back to Color.

Scenario

You plan to launch a new range of travel projectors and must create a dimension group to attach the new items in the line. The travel projectors are available in many sizes and finishes. The term Finish is used in your company instead of the word Color. Additionally, it has been decided that you want to track sales of these new travel projectors by site.

The specification for the dimension group is as follows:

• Dimension group ID must be TP • Name must be Travel Projectors

The inventory dimensions Size and Finish must be active and have Primary stocking selected (you must rename the dimension Color to Finish).

The dimension Site must have the following properties:

• It must be included in the physical inventory • The site dimension must be included in calculating the financial cost

of the items sold

Challenge Yourself!

1. Create an inventory dimension group for the new line of travel projector you are introducing into the market. Use the specifications from the scenario.

2. The dimension Site must be active and have Primary stocking selected.

Need a Little Help?

1. Click Inventory management > Setup > Dimensions > Dimension groups to create an inventory dimension group for the new line of travel projectors that you are introducing into the market. Use the specifications from the scenario.

2. To rename the dimension Color to Finish, look back to the procedure associated with renaming an item dimension.

3. Verify the selection status of the Physical inventory and Financial inventory parameters.



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Step by Step

1. Click Inventory management > Setup > Dimensions > Dimension groups.

2. Press CTRL+N to create a new dimension group. 3. Select the dimension Color. 4. Click the Rename tab. 5. Click Rename and overwrite the text for Color with Finish. 6. For the dimensions Finish and Size click the Active and Primary

stocking parameters. 7. For the Warehouse dimension ensure that the dimension group has

the parameters Active, Primary stocking, Financial inventory and Physical inventory.

IMPORTANT: Rename the dimension that you changed to Finish, back to Color. This is to ensure that future labs in Trade and Logistics I will perform succesfully.



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Inventory Parameters Inventory management > Setup > Parameters

Parameters in the Inventory management module are used to select between two or more important types of functionality. In the Parameters form, you can enter default information that must be used by Microsoft Dynamics AX 2009 if it has not been specified at a lower level, and select number sequences for the Inventory management module.

The primary setup that must be completed in this lesson is the default Unit field. This is found under Inventory management > Setup > Parameters, General tab. The unit setup specified here will be the default unit of measure used when a new item is created in the Items form.

For example, if the default is set to Pcs. (pieces), when you create a new item, the Unit of Measure value is Pcs. The Unit of measure can be changed or overwritten at the time that the item is created.

FIGURE 2.14 INVENTORY PARAMETERS FORM



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Item Setup Item Setup introduces how to create an item in the Items form and describes how applying settings to the item affects how transactions are created for the item.

Use the Items form to create and manage base data for goods, bills of materials (BOMs), and services. You must at least specify:

• An item number • An item group • An inventory model group • A dimension group

Additionally, you can specify relations to:

• Purchase • Sale • Warehouse management • Production • Master planning • Projects • Human resources

NOTE: Making changes to the item's base data in the Items form does not automatically change base data in other modules.

Items without inventory transactions can be deleted and item numbers can be changed.

Procedure: Create a New Item by Using Templates

To create a new item, follow this procedure:

1. Click Inventory management > Item details. 2. Press CTRL+N to create a new item. The Select a template for Item

table dialog box appears. 3. Select the template on which to base the new item by selecting the

check box next to the template. If you want to create the item from scratch, select the Blank template.



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4. Click OK. The default values of the template you selected are copied to the new item. Or, if you do not use a template to create an item, you must as a minimum enter values in the mandatory fields, those fields for which there is a red wavy line.

5. Enter settings for the item which are explained in the following topics and in other courses in the Trade and Logistics collection.

NOTE: When you press CTRL+N to create a new item, and select to create the new item with a template, you create the new item by using the default values of the selected template without the system prompting you. Select the Don't ask again check box in the Select a template for Item table dialog box if you do not want to see the templates list.

Items Form

The Items Form topic provides an overview of settings in the Items form. Not every field is documented here, as many of the fields are dealt with:

• In other topics in the Inventory course • Elsewhere in the Trade and Logistics course • In training manuals related to other functional areas of Microsoft

Dynamics AX 2009 such as Production, Warehouse Management and other application related courses

Therefore, only the settings that do not fall into any of the categories in the list are described here. The following pages provide a tab-by-tab overview of the Items form.



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Items Form: Overview tab

Inventory management > Item details > Overview tab

On the Overview tab you can view all items in the system.

FIGURE 2.15 ITEMS FORM - OVERVIEW TAB

You can specify values in the following fields:

• Item number • Item name • Item type

Item Number

The item number can be set up to be automatically generated or you can specify the item number manually. This function is controlled by the number sequence in Inventory management > Setup > Parameters.

Items Form: Item Name

Item name is not a required field. This is because Microsoft Dynamics AX 2009 uses the Item number as the primary key/ID to uniquely determine the item. Therefore, the name is only an option in Microsoft Dynamics AX 2009.

Item descriptions are written in different languages and printed on external documents or forms. Specify item names by clicking Setup > Language - Item description and entering the description under the selected language. The customer's and vendor's language codes determine which text is retrieved in Accounts receivable, and Accounts payable, respectively.



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EXAMPLE: You specify that the item name for item B-Pack-1 must appear as ‘’Batterier‘’ in Danish. You sell 100 units of B-Pack-1 to a one-time customer in Denmark and in the Create sales order form, specify that the language must be Danish. When you print the confirmation for the order, the item name is printed in the Danish translated form ‘’Batterier‘’.

Although the Item name field is optional, if completed, the content is copied to the Search name field. In the Search name field, you can overwrite the copied content to enter a name to use for a fast search. For example, use this field if a long item name was entered.

HINT: Searches are faster when done on Search names instead of Item names because they are indexed.

Items Form: Item Type

An item number can be one of three types, as shown in the following table:

Item Type Description Item The item type consists of purchased items that do not require

processing to be sold or used in a production.

BOM With items of type BOM, you can attach routes and a bill of material. The BOM can consist of other item numbers of all types. You can create an item number produced or composed of several item numbers by using the type BOM. If you change the item type to BOM, you can insert BOM lines. When the item type is changed from BOM to Service or Item, the BOM lines button disappears.

Service This can be used for hourly service (for example). Items of this kind do not have a physical on-hand inventory.



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Items Form: General Tab

Inventory management > Item details > General tab

On the General tab, you specify group settings related to the selected item.

FIGURE 2.16 ITEMS FORM – GENERAL TAB

In the Text field, enter a description of the item. For example, you can enter a description of the item's features.

Items Form: General Tab - Buyer Group and Packing Group

Buyer Group

You can associate employees and items with a Buyer group. When you create a purchase by using item coverage or by estimating production, the buyer group is copied to the purchase header, but only if no buyer group was set up for the vendor. The field is copied to planned orders, shown on reports, and can be used to filter on those reports.

EXAMPLE: Some companies find that using Buyer groups makes inventory and sales management, and planning simpler because purchasers are frequently assigned to items. When you attach a Buyer group to an item, one buyer can be made responsible for managing the inventory and sales of that item. Then, sales of that item can be tracked.



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Packing Group

Select the packaging group to associate with the item. Packaging groups are used with packaging material and packaging material fees and are specified in the Packing groups form.

Items Form: Setup Tab

Inventory management > Items > Setup tab

On the Setup tab, specify price update and item physical dimension settings.

FIGURE 2.17 ITEMS FORM - SETUP TAB

The following table describes some fields on the Setup tab.

Field Description Volume This displays the volume for one unit of the item in

inventory units. This information is used as shipping information where the item's volume is indicated, such as on packing slips.

Packing Quantity This displays the amount in inventory units on which to calculate packing duty.



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Field Description

Net Weight This displays the net weight in the selected inventory unit. This information is used for printed records, such as packing slips, on which the item's weight is given as shipping information. If the item is of the type BOM, the net weight can be calculated as the sum of the net weight for the items on the bill of material.

Tare Weight This displays tare weight of the item for one inventory unit.

Gross Weight This displays the gross weight of the item for one inventory unit.

Gross Depth This displays the depth of one unit. This includes packaging.

Gross Width This displays the width of one unit. This includes packaging.

Gross Height This displays the height of one unit. This includes packaging.



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Items Form: References Tab

Inventory management > Items > References tab

This topic will cover the Vendor and the Item sales tax group fields on the References tab.

FIGURE 2.18 ITEMS FORM - REFERENCES TAB

Vendor

The Vendor field is where you specify if a main vendor is associated with the item.

It is important for item coverage because you use this vendor to create the planned purchase order for the item. The field is also helpful for printing items such as purchase statistics and item lists for each vendor, and for filtering transactions in the Items table.



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Item Sales Tax Group

The Item sales tax group field specifies the Item sales tax group. When you create an item, specify the item tax code for the Purchase and Sales groups on the Setup tab. The item sales tax group consists of one or more sales tax codes. Sales tax codes contain information about a tax, such as the percentage, the ledger accounts where posting is to occur, and the name of the tax code. Everything that has anything to do with sales tax is set up and managed through Sales tax.

Items Form: Price/Discount Tab

Inventory management > Items > Price/Discount tab

Specify the price settings for the item for purchase order, sales order and inventory in the Price/Discount tab.

FIGURE 2.19 ITEMS FORM - PRICE/DISCOUNT TAB

Price In the Price field, under the Base purchase price, Base cost price, and Base sales price group headings, enter the price for each number of units given in the Price unit field.

Price Unit

The Price unit field displays the number of units for which the cost applies. If the value is 1 or blank, the cost applies for one unit of the item. If the value is 100, the cost applies for 100 units of the item. When you enter purchase order lines, sales order lines, and inventory journal lines, the unit price is automatically converted for the quantity given on the line. This set up makes sense if the item costs are low.



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Price Misc. Charges

A price misc. charge is a fixed additional sum on the price. This is only applied to the Items form, compared to purchase, production, and/or sales.

A price misc. charge is a 0-point adjustment of the price. It is an amount added to the price independently of the quantity. It can be for example, production and setup costs, fees, or freight. You can make a price misc. charge dependent of quantity by filling in the Price quantity field and selecting the Incl. in unit price box.

EXAMPLE: A price misc. charge of 80.00 U.S. Dollars (USD) is attached to a sales price of 100.00 USD. When you create an order for the item, the Base sales price, Price field for the order line shows 100.00 USD, and 80.00 USD is added to the balance. When you create an order, all price misc. charges will be scanned.

Price quantity

The Price quantity field displays the number that is used when dividing the given price markup for each unit.

Date of price

The Date of price field displays the date the price was last changed, either manually or, in regard to a purchase or sales order update (for example).

Incl. in Unit Price

If you select the Incl. in unit price field, the miscellaneous charge will be divided by the number that is specified in the Price quantity field and then added to the price given in Price misc. charges.



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Items Form: Other Tab

Inventory management > Items > Other tab

On the Other tab, specify alternative item settings and Intrastat settings for the current item.

FIGURE 2.20 ITEMS FORM - OTHER TAB

Items Form: Other Tab - Alternative Items

The fields in the Item alternative field group are to set up the ability to use alternative items.

Select the Use field when you use an alternative item number for the current item. The following table describes the options available in the Use field.

Setting Description Never If the order quantity exceeds the quantity of

available on-hand inventory, then the alternative item number is not used and orders are registered as backorders.

Nothing in inventory The alternative item is delivered if the quantity of available stock on-hand is less than or equal to 0 (zero).

Always The alternative item number is always delivered, for example, if the current item is replaced by a new item.



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Examples: Alternative Items

If an item number is voided and replaced by a new number, enter the new item number as an alternative item number for the old item. For the old item, the field can be set to Always. If orders are entered for the old item number, the new item number will be delivered.

The field can also be set to Nothing in inventory for the old item. This ensures that the new item number is delivered first when levels of the old item are used up and therefore equal 0 (zero). If two or more item numbers cover a single item number, in other words, regardless of the item number that is entered when the sale is made, it will always be a specific item number that is delivered.

NOTE: Alternative item numbers functionality only applies to sales orders. Alternative item functionality is unavailable for Production issues. If you use alternative item numbers, item numbers and texts retrieved from the alternative item are printed on the invoice. The sales statistics are updated for the alternative item number.

Items Form: Other Tab - Alternative Items - Field Descriptions

The remaining fields in the Item alternative field group are described in the following table.

Field Description Alternative Item Number Alternative item number used if the value

of the field is set to Nothing in inventory or Always, and this is where you select that item that should be the alternative.

Configuration Specify an alternative configuration associated with the alternative item number and which can be used if the value in the Use field is set to Nothing in inventory or Always.

Size Specify an alternative size associated with the alternative item number and which can be used if the value in the Use field is set to Nothing in inventory or Always.

Color Specify an alternative color associated with the alternative item number and which can be used if the value in the Use field is set to Nothing in inventory or Always.



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Items Form: Other Tab - Foreign Trade

The fields in the Foreign trade field group are used to set up parameters that are used in Intrastat reporting within the European community.

• Commodity: The item's code for Intrastat reporting. • Additional Units: Additional Units are used for reporting to Intrastat

on trade between countries/regions in the European Union. The field is used when several items are sold under the same Intrastat code.

• Misc. Charges Pct.: This is a statistic that can be used for Intrastat reporting.

• Country/region: This displays the item's country/region of origin. This information is used for Intrastat reporting.

• State: Select the State of origin for the item from the drop-down box.

Items Form: Dimension Tab

Inventory management > Items > Dimension tab

In the Dimension fields, you can specify a default Department, Cost center and Purpose for reporting throughout the company.

FIGURE 2.21 ITEMS FORM - DIMENSION TAB



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Default Order Settings Microsoft Dynamics AX 2009 uses Default order settings when Master Planning generates sales orders, purchase orders, and inventory orders. The main settings involve defining:

• A warehouse to use for each module when orders are created • The settings that modify order quantities for each module when

orders are created

There are two versions of the Default settings form.

• Default order settings form. Use this form to define the default order settings for an item. When you operate in a single-site environment, you can only use this version of the form.

• Site specific order settings form. Use this form to define settings that differ from the default order settings for an item on a different site. The multisite functionality must be enabled to use this version of the form.

NOTE: When the multisite functionality is enabled, the default warehouse settings are transferred from the General tab of the Default order settings form to the Overview tab of the Site specific order settings form. The default warehouse settings on the General tab of the Default order settings form are replaced by the default site settings.



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General Tab

Inventory Management > Item details > Setup > Default Order Settings > General tab

Use the General tab to set up default sites for Purchase, Inventory and Sales.

FIGURE 2.22 DEFAULT ORDER SETTINGS FORM

When multisite is enabled, this tab appears in the Site specific order settings form.

You will find fields that have the same names on the Purchase order tab, Sales order tab and Inventory tab of the Default order settings form.

This is because they have similar functions that are applied to different forms.

Purchase, Inventory and Sales Unit and Site

This Purchase unit, Inventory unit and Sales unit fields display the stock-keeping unit for purchase, inventory (inventory journals and production), and sales. Items may be purchased in tons, produced in pounds, and sold for each piece.

EXAMPLE: An item can be purchased in tons, produced in kilos, and sold to customers in bags. The item is stocked with an item number, and the conversion factors handle conversion between purchase, production, and sales. With an item number and conversion factors, an item is more manageable in the context of recording, master scheduling and coverage planning.



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The Purchase site, Inventory site and Sales site fields is where you enter the default site for orders that are created for the item. You can change the site unless the Mandatory site check box is selected.

Multiple

On the Purchase order tab, the default quantity in the purchase package, that is the quantity of the item number in stock keeping units, proposed as a default for purchases and requirement calculations, and as a multiple of the purchase quantity. You can always change the default.

On the Inventory tab, the Multiple field displays the default quantity in which the item is to be produced. The field refers to the production module, where the information is used in the manufacture of a BOM item. However, you can always change the default quantity.

On the Sales order tab, the Multiple field is the number of inventory units in which an item is sold. A value on the order line is always rounded off for the whole sales quantity. If the number of sales units changes, you can indicate a new number.

Min. Order Quantity

The Min. order quantity field specifies the lowest order quantity allowed. The quantity corresponds to the lowest desired number of receipts/issues for the item number. The value is used in purchase, sales, inventory journals, and item coverage.

Example:

A company receives a discount on an item if it purchases a minimum of ten items. The number ten (10) is entered in the Min. order quantity field of the Purchase order tab of the Default order settings form. Later, whenever a purchase order line is created for the item, ten is the proposed quantity in the Quantity field (on the purchase order line). If you change the quantity to eight, you receive a message that the minimum quantity is ten, and are advised to change the quantity to ten. If you select No, the quantity of eight is kept, despite the settings.

Max. Order Quantity

The Max. order quantity field specifies the largest quantity that is accepted in purchase, sales, inventory journals, and production, for example, the largest quantity for which there is room at the warehouse.



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Example:

Delivery is paid for when the purchase is made. Delivery is made by a truck able to carry quantities of thirty five. In this case the Max. Order quantity on the Purchase order tab of the Default order settings form is set to 35, unless you will use multiple trucks. The value 35 is also entered in the Multiple field. If you create a purchase order line with the value of 45, Microsoft Dynamics AX 2009 suggests buying a quantity of 70.

Standard Order Quantity

On the Purchase order tab, you can specify a default quantity used when you create a purchase order line. Specify this value when the item is always purchased in a particular quantity.

On the Sales order tab, you can specify the standard quantity for a sales order. That quantity is automatically inserted on the sales order line.

EXAMPLE: For purchase orders, you might want to specify the Standard order quantity as the quantity that qualifies you for a discount with your vendor. In this manner, every time that you create a purchase order with a vendor you will, by default, order a quantity that will entitle you to a discount according to the trade agreement made with the vendor.

Purchase, Inventory and Sales Lead Time

The Purchase lead time, Inventory lead time and Sales lead time fields show the standard delivery-, lead-, or acquisition times for items.

NOTE: If you are using the Delivery date control for sales or transfer orders, the value in the Lead time field on the Sales order tab overrides the value that you specify in Accounts receivable > Setup > Parameters > Sales lead time.

Working Days

Select the Working days check box if days must be specified in open days. Open days exclude, for example, weekends, company shutdowns, public holidays, and other non-open days. Open days are defined in calendars attached to the company, warehouses, work centers, and so on.

Stopped

Select the Stopped check box if the item is blocked. When an item is blocked and you enter a purchase line, a warning message appears. When the item is blocked, inventory transactions that are related to the purchase order line cannot be modified, for example, when you post a packing slip or an invoice.



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You can block a purchased item and concurrently sell it. In this case, the Stopped field is selected in Purchase. However, it is blank in Inventory and Sales.

An item number can be blocked for sale, for example, if:

• The item is still under development or manufacture, and you do not want the item to be sold or reserved.

• You have received many defective items. The defects must be corrected before the item can be sold. Therefore, you can block the item in the meantime.

You cannot block a series or a lot of the item. If parts of the item are to be blocked, you can block them by moving inventory or by blocking the full stock of the item for that period.

Warehouse and Mandatory

Use the Site specific order settings form when mulitisite is enabled to set up default warehouses.

Specify the item's default warehouse or placement for the Purchase order, Inventory, and Sales order field groups. The warehouse is then proposed for item transactions.

When you select the Mandatory field, the specified mandatory warehouse will be used for the item for the Purchase order, Inventory, and Sales group. Only inventory transactions at the warehouse specified in Warehouse are accepted.

Units of Measure In Microsoft Dynamics AX 2009, an item cannot be sold or purchased unless a unit of measure is associated with it. You must specify all units used by a company in the Units form.

Set Up Units of Measure

In the Default order settings form you can specify Units of measure for purchase orders, inventory, and sales orders. For example, an item may be purchased in pounds, stocked in liters, and sold in pints.

The following procedures show how to create units of measure and unit conversions.



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Procedure: Set Up Units of Measure and Unit Conversion

To set up units for the company, follow these steps:

1. Click Basic > Setup > Units > Units. 2. Select an existing unit or create a new unit. 3. Specify the number of decimals for the stock-keeping unit to display.

You can now continue to specify a unit conversion formula for the unit.

Procedure: Specify a Unit Conversion for the Unit

To set up a unit conversion for the unit, follow these steps:

1. Select the unit from which you want to make the unit conversion. 2. Click Setup > Unit conversion. 3. Press CTRL+N to create a new unit conversion. Create the unit

conversion line by using the unit form from which you opened the form.

4. You can specify the conversion with a specific item if it is necessary. This means that the unit conversion is only valid for the selected item.

Item specificity is important because, for example, a pack of one type of bulbs might contain five pieces whereas a pack of another type of bulbs may contain ten pieces. Therefore, the unit Pack can be used for different quantities of pieces, dependent on the item.

5. Specify the factor by which the unit must be multiplied to equal the

To unit. For example, if there are five pieces in a pack and the Unit conversion form is opened from pieces, enter ‘5’ in the Factor field.

6. In the To unit field, specify the unit to which you want to convert. 7. Specify any additional quantity if you have to specify an additional

quantity of the unit on conversion. For example, you create a conversion for one cable roll of RM-Cable/3 to 200 meters. You specify one meter in the Additional field because when you receive one cable roll, you actually receive 201 meters of sheet metal but one meter in total is scrapped. This is because when you cut the metal into one meter pieces, 0.5 centimeters is scrapped.

8. Click the Example tab to check that the conversion is set up correctly.

Procedure: Set Up Different Language Texts for the Unit

Specify unit texts for the unit so that the customer or vendor's language code will determine which description of the unit is used on the reports.



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To set up different language texts for the unit:

1. Click Basic > Setup > Units > Units. 2. Click Setup > Unit Texts. 3. Select the language and enter the translated text.

Whenever you create an order for an item with a unit text for another language specified on it, and the order's language is the same as the language that is used for the unit text, the unit is printed in its translated form.

Unit Creation Wizard

Basic > Setup > Units > Unit conversion

Perform an automatic conversion between the units by using the conversion rules specified in the Unit conversion form.

Use the item creation wizard to specify a new default unit value and to update the unit conversions between different types of units.

If you click the Function button in the Units form, you can use a wizard where Microsoft Dynamics AX 2009 will create general unit conversions for you, such as equating 100cm with 1m.

NOTE: When you perform a conversion, the system first checks whether a specific conversion has been created for the item. If not, the general conversion without item number is used. When a conversion is set up from one unit to the other, you must also create the conversion the opposite way. For example, 1m = 100cm and 1 cm = 0.01m.

Warehouse Management Inventory management > Setup > Inventory breakdown > Warehouses

Warehouse Management discusses how to create a warehouse and attach it to an item.

BEST PRACTICE: If you have enabled the Warehouse dimension in the Inventory dimension group, it is good practice to ensure that the warehouse is always specified by selecting it as Primary stocking.

Procedure: Create a Warehouse

To create a new warehouse:

1. Click Inventory management > Setup > Inventory breakdown > Warehouse.

2. Press CTRL+N to create a new warehouse. 3. On the Overview tab, specify the following information:



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4. Warehouse ID and description 5. Site 6. Warehouse type:

o Default o Quarantine - Attach warehouses of the type Quarantine to

regular warehouses of the type Default.

When you purchase items that are quarantine-controlled to a warehouse, they are automatically put in the warehouse of the type Quarantine that is attached to the receiving warehouse.

When you finish the quarantine warehouse the items are then transferred back to the specified receipt warehouse.

o Transit - This warehouse type is used for transfer orders and the

sales order delivery date control function. Transit warehouses are the system-technical intermediary warehouses between the From and To warehouses, or warehouse and delivery location with the delivery date control functionality.

HINT: You can specify transport times with regard to the selected warehouse by clicking the Transport button. Transport times are used in the delivery date calculation when you use the delivery date control and with transfer orders.

Procedure: Set Up a Warehouse on an Item

To set up a warehouse on an item in a multisite environment, follow these steps:

1. Click Inventory management > Item details. 2. Select the item and then click Setup > Site specific order settings. 3. Select the site for which you are setting up the item. 4. In the Purchase warehouse, Inventory warehouse and Sales

warehouse fields, select the warehouse to be proposed as default for the purchase, storage or sale of an item.

5. Select the Mandatory fields and only inventory transactions at the warehouse specified in the Warehouse field are accepted.

NOTE: If you do not specify a warehouse on the item, you must specify the warehouse from which the items are to be sold or purchased on the sales and purchase order header and on the individual lines. The warehouse specified in the header applies to all lines, unless otherwise individually specified, either on the item or manually on an order line.



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Lab 2.4 - Create a New Item Contoso Entertainment Systems - Company CEU

Scenario

You are an employee of Contoso Entertainment Systems, and have been asked to show how to create a new item Long Life Projector Bulb, and specify ordering quantities and some warehouse controls.

Specifications for the new item Long Life Projector Bulb are as follows:

• The Item number is 160906. • The Item name is Long Life Projector Bulb. • The Item group is Projectors. • The Inventory model group is FIFO. • The Dimension group is N-W. • This bulb can only be purchased in multiples of ten at a cost of 200

U.S. dollars (USD) each. The minimum order amount is ten pieces and the maximum is 100. The standard order quantity is ten. These settings are also the same for Inventory.

• The bulbs must be purchased into and stored in to Site 2, and Warehouse 21 and must not be moved from here. Therefore, they can only be sold from this warehouse, too.

• Contoso Entertainment Systems sells the bulbs in boxes of two. Therefore, two pieces equals one box. Each box has a sales price of 520 USD.

• Create a purchase unit of measure as pieces (Pcs), and a sales order unit of measure as Box, and set up a conversion.

Challenge Yourself!

1. Create the item with the specifications from the scenario.

STOP HERE: The rest of this lab requires knowledge and skills you will gain later in Microsoft Dynamics AX 2009 Trade and Logistics I. The rest of the lab, in Challenge Yourself Part 2, is therefore an instructor-led demonstration. The reason for continuing the lab is to show the effect that item setup has on transactions with the item. You may want to revisit this lab later when you have completed the two courses, at which stage you can execute all the steps in the lab.



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1. Create a purchase order with vendor 1103 for 150 pieces of the new item 160906.

2. Questions: o What does the prompt ask you? o How do you override the check and have the 150 pieces inserted

in the purchase order line?

3. Invoice update the purchase order. 4. Create a sales order with customer 1202 for 80 boxes of item number

160906. 5. Try to invoice update the sales order. 6. Question: Why is the update canceled?

Need a Little Help?

1. All the setup you must do for the item is performed from Inventory management > Items.

2. You must perform a unit conversion to convert pieces into boxes. 3. You perform the order quantity and storage setup in Default order

settings form and Site specific order settings form.

Step by Step


1. Click Inventory management > Item details. 2. Press CTRL+N to create a new item. 3. Enter the Item number “160906”. 4. Enter the Item name “Long Life Projector Bulb”. 5. TAB to the Item group, click the arrow, and select Projectors. 6. Click the General tab, click the arrow in the Inventory model

group field, and select FIFO. 7. Click the arrow in the Dimension group field and select N-W. 8. Press CTRL+S to save the record. 9. Click the References tab, and then select Pcs in the Purchase unit

field. 10. Click Setup > Unit conversion and press CTRL+N to create a new

line. 11. Select Pcs in the From unit field, and then type “2.0” in the Factor

field. 12. Select Box in the To unit field, and notice the “2 pieces = 1 box”

formula at the bottom of the form. 13. Close the Unit conversion form.



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14. In the References tab of the Items form, select Box in the Sales unit field, and then select Pcs in the Inventory unit field.

15. Click Setup > Default order settings > General tab, and then modify these fields as follows: a. Purchase site = 2 b. Inventory site = 2 c. Sales site = 2

16. Click the Purchase order tab, and then modify these fields as

follows: a. Mandatory site = selected b. Multiple = 10 c. Min. order quantity = 10 d. Max. order quantity = 100 e. Standard order quantity = 10

17. Click the Inventory tab, and then modify these fields as follows:

a. Mandatory site = selected b. Multiple = 10 c. Min. order quantity = 10 d. Max. order quantity = 100 e. Standard order quantity = 10

18. Click the Sales order tab, and then modify these fields as follows:

a. Mandatory site = selected

19. Close the Default order settings form. 20. Click Setup > Site specific order settings, and then modify these

fields as follows: a. Site = 2 b. Purchase warehouse = 21 c. Inventory warehouse = 21 d. Sales warehouse = 21

21. Click the Purchase order tab and select the Mandatory warehouse

check box. 22. Click the Inventory tab and select the Mandatory warehouse check

box. 23. Click the Sales order tab and select the Mandatory warehouse

check box and close the Site specific order settings form. 24. Click the Price/Discount tab.



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25. In the Price field in the Base purchase price field group, enter “200”

26. In the Price field in the Base sales price field group enter “520” 27. Close the Items form.


1. Create a purchase order as per the instructions in the lab. 2. Answers:

a. You are warned that the maximum order quantity is 100 pieces. b. Click No to override the maximum order quantity.

3. To invoice the purchase order click Posting > Invoice, in the

Quantity field, select All and enter a number in the Invoice field. 4. Click OK to run the update. 5. Create the sales order as specified in the lab. 6. Click Posting > Invoice. In the Quantity field select All. 7. Click OK. 8. Answer: The sales order update is canceled as there is insufficient

on-hand inventory to fill the order. This is because 80 boxes equals 160 pieces of the item which is ten pieces more than you purchased.



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Item Pricing You can set up an item's price by using Costing versions or by manually specifying base prices on the Price/Discount tab of the Items form.

Costing Versions

Costing versions enable users to create distinct user-defined environments, for maintaining and calculating items’ planned costs. The Costing versions setup form is found in Inventory management > Setup > Costing versions.

Manual Specification of Base Prices

In the Items form on the Price/Discount tab, specify price information for an item if you are not using the costing method Standard cost, and if you are not using Costing versions.

In the price information fields, specify a purchase order price, a cost price and a sales price for the item. You can first specify these values manually or you can have the system update any or all prices based on transactions in the system by using Sales price models.

Costing Versions

Users can enter and maintain planned items’ costs, cost categories’ rate, indirect costs’ rate, and ratio in Costing versions. The BOM calculation executed on the Costing version calculates and appends the manufactured item planned costs to it.

The costs created with a status of Pending can be activated, discreetly or else in mass, to become effective and be applied to production costing.

Attributes on Costing versions, enable constraints of content and cost calculations in that version. Items’ costs in a Costing version can be analyzed and maintained individually or for each Costing version. Active cost history is kept, with full details.



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You create and setup Costing versions in Inventory management > Setup > Costing versions.

FIGURE 2.23 COSTING VERSIONS FORM

You maintain Costing versions in Inventory management > Periodic > Bill of materials > Costing versions.

You maintain and setup Costing versions for individual items in Inventory management > Item Details > Prices.

NOTE: The Costing version feature is available on all types of costing methods. However, when standard cost is enabled, there are principles in the Costing version setup form that are restricted and cannot be changed.

Scenario: Costing Version

Vince, the Operating Manager wants to build up next year's standard costs.

Vince creates a new dedicated Costing version for those. Various contributors populate the Costing version with next year’s purchased item costs, cost category rate, and indirect cost ratios.

A BOM calculation, executed on the Costing version, calculates and inserts the standard costs for a manufactured item in the version. The calculation is based on the Costing version cost set. Vince reviews the content of the Costing version, correcting as necessary and locking the Costing version as soon as he is satisfied with its content.

At the beginning of the new year, Vince mass activates the Costing version’s costs. This makes them effective and applied for inventory valuation and production costing in the new year.



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Costing Version Types

There are three Costing version types.

• Planned Cost: Use this Costing version for items that do not use the Standard cost Costing method.

• Standard Cost: Use this Costing version for those items that use the Standard cost Costing method and all other items that rollup directly to a Standard cost based BOM.

• Conversion: Use this Costing version when you convert an item from a non standard cost Costing method to the Standard cost Costing method.

You can select the Planned cost and Standard cost Costing version types in the Costing versions form.

You can create the Conversion Costing version in the Standard cost conversion form.

Costing Versions - BOM Calculation

A Costing version can also contain data about item sales prices or purchase prices for BOM calculation purposes only.

• A BOM calculation can calculate a sales price for manufactured items, and can also generate an associated sales price record within the Costing version.

• A BOM calculation with planned costs can be based on item purchase price records within the Costing version, instead of item cost records. The item purchase price records must be manually entered.

• The item sales price records and purchase price records are only used for BOM calculation purposes.

Item Price Form

Inventory management > Item details > Price button

The Item price form is used to view cost history and maintain item cost records for an individual item. You would typically use the Item price form to create cost prices for a new item and use the Costing versions form to create cost prices for existing items.



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Data maintenance includes entering pending costs for a purchased item, calculating pending costs for a manufactured item, and activating pending cost records. Activating a pending cost record will change its status from Pending to Active and will change its effective date to the activation date. The Item price form displays pending and active cost records on different tabs. Different cost records for an item may reflect a different Costing version, site, effective date, or status.

FIGURE 2.24 ITEM PRICE FORM - PENDING TAB

The form can also be used to view and maintain information about item sales price records and item purchase price records within a Costing version. Generate an item's sales price record by using the BOM calculation form to calculate an item's sales price.

Item Price Form Details

The following table describes the fields in the Pending prices tab of the Item price form.

Field Description Price type

Shows whether the information applies to an item cost record, an item sales price record, or an item purchase price record.

Version Costing version for the record.

Name Name of the Costing version for the record.

Site Show the applicable site for the record. Item cost records must be maintained by site (when you use multisite functionality).



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Field Description Price Enter the pending cost, display the calculated pending

cost for a manufactured item, or display the active cost for a cost record.

Price unit Show the quantity that is related to the item cost record. An item's cost is typically expressed for a quantity of 1. However, it may be expressed for every 100 or 1000 to handle decimal precision issues.

Price misc. charges Enter pending costs for miscellaneous charges for a purchased item, calculate the miscellaneous charges for a manufactured item (based on the amortization of constant costs), or display the miscellaneous charges for an active cost record.

Price quantity Show the quantity that is related to the item's miscellaneous charges. The miscellaneous charges will be amortized over the specified quantity.

Incl. in unit price Show if miscellaneous charges will be included in the item's unit cost. Miscellaneous charges must be included when the Costing version reflects a standard cost type.

Unit Displays the unit of measure for the cost record. An item cost record must be expressed in the item's inventory unit of measure.

From date Show the intended effective date for a pending cost record. The date may be defaulted from the Costing version.

Blocked A system-assigned flag that indicates that an active cost record cannot be maintained, or that the blocking flag for the Costing version has blocked changes to pending cost records.

Calculated A system-assigned flag that indicates that the cost record contains a calculated cost for a manufactured item.

Log A system-assigned flag that indicates that an Infolog exists for the cost record. You can view this by clicking the Log button. The Infolog contains warnings that are generated by the BOM calculation for the cost record.



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Activate Pending Prices

To activate a pending price for an item, click Activate in the Pending prices tab.

The Active prices tab has an additional field Activation date, that shows when the price was activated.

To activate pending prices for many items, use the Costing version form.

Procedure: Create a Costing Version

To create a Costing version, perform the following:

1. Open Inventory management > Setup > Costing versions. 2. Press CTRL+N to create a new line. 3. Select a Costing type. 4. Insert text in the Version field. 5. Insert text in the Name field. 6. Select “Yes”, or “No” in the Block field (depending on if the version

needs to be blocked for usage or not). 7. Set Block activation to “Yes”. 8. Save the record.

Procedure: Add Items in a Costing Version

To add an item's costs in a Costing version, perform the following:

1. Open Inventory management > Periodic > Bills of materials > Costing versions.

2. Select a record in the Costing version maintenance form. 3. Click button Price > Item price. 4. Complete fields as required on the Pending prices > Overview tab. 5. Save the record and close the Item price form.

Procedure: Activate Cost Prices from a Costing Version

To activate cost prices from a Costing version setup form, perform the following:

1. Open Inventory management > Setup > Costing versions. 2. Select a record in the Costing version setup form. 3. Ensure that the Block field is set to “No”. Otherwise, it will be

blocked for input. 4. Select “No” in the Block activation field to ensure activation can be

performed. 5. Click the Activate button.



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6. Select only the Cost price check box to activate the cost price only. 7. Click OK.

Procedure: Specify Prices Manually in the Items Form

To specify prices manually for an item:

1. Click Inventory management > Item details. 2. Click the Price/Discount tab. 3. Enter a value in the Price field of the Base purchase price, Base

cost price or Base sales price headings or all prices for the item.

NOTE: If you select the Fixed receipt price field on the Setup tab in the Inventory model groups form, item receipts are always made at the price specified in the Price field under the Base cost price heading and item issues are made at the current inventory value. Fixed receipt price cannot be selected when you use the Standard cost Costing method.

The price for a specific item is based on the number of units specified in the Price unit field. If the value is 1 or blank, the cost applies for one unit of the item. However, if you specify a value more than one or zero then the price applies for this multiple quantity of the item.

EXAMPLE: You buy a box of 50 items where the price unit equals 50, the cost applies for 50 units of the item. When you enter purchase order lines, sales order lines, or inventory journal lines, the unit price is automatically converted for the quantity given on the line.

Procedure: Update Prices Automatically in the Items Form

As mentioned earlier, you can also set Microsoft Dynamics AX 2009 to automatically update prices. To have prices automatically updated, follow these steps:

1. Click Inventory management > Item details. 2. Select an item. 3. Click the Setup tab. 4. Select or clear the Latest purchase price check box. By selecting

this check box you can update the purchase order price in the Items form with the latest purchase order price excluding discount and miscellaneous charges.

EXAMPLE: The price of oil or steel fluctuates greatly. When you purchase these items, the best guide to the purchase price is probably the last price that you paid.



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5. Select or clear the Cost price field to always update for the last receipt from the inventory journal or from a production report-as-finished where a BOM line is returned to inventory. If you leave this check box blank, production costs will only be updated manually.

6. Select how sales price must be updated. The following table shows the methods you can select to update the sales price.

Sales Price Model Methods

Sales price model Calculation method None Setting of the sales price is manual and no automatic

updating of the sales price occurs.

Contribution ration Calculate sales price by using a percentage markup on either the purchase or cost price. The formula for the calculation of the sales price with this setting is as follows: Sales price = 100*Cost/Purchase price (100-Contribution ratio) Example: Purchase price = 40 USD Contribution ration = 10 percent Sales price: 100*40 = 44.44 USD (100-10)

Misc. charges pct. Miscellaneous charges represent, for example, freight, handling fees, or import fees. In sales price calculation, the Misc. charges pct. is multiplied by the base price, either the purchase or cost price for the item, and then added to the price of the item. For example, the item QRI has the sales price model Misc. charges pct. and the miscellaneous charges percent is 20. The sales price is therefore 20% * 0.45, the base price selected price, 0.09 plus 0.45 USD. The sales price on the sales order line for one pieces of QRI is therefore = 0.54 USD.

If a sales price model is used and then discontinued, all sales price updates will be made based on values proposed on a new line.



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Summary Inventory reviewed how to use the functionality associated with inventory management in Microsoft Dynamics AX 2009. The following areas were covered:

• Setting up item groups and examining the posting types • Setting up inventory model groups and inventory dimension groups

and reviewing how they affect the way item transactions are handled • Creating items and setting up unit conversions and item pricing

Discovering how inventory management works in Microsoft Dynamics AX 2009 helps you manage the following:

• How and if posting occurs • Control of receipt and issue of items • How inventory costing is set up with regard to dimensions • The level of detail with which you categorize and store items

Additionally, learning about how to set up items in the context of inventory management helps you determine how items must be set up and priced according to the specific needs of the business.



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Test Your Knowledge Test your knowledge with the following questions.

1. To which account in Item groups do you post costs associated with a sales order, at the point of packing slip update?

( ) Sales order tab > Packing slip revenue ( ) Purchase order tab > Packing slip ( ) Sales order tab > Revenue ( ) Sales order tab > Packing slip

2. To which account in Item groups do you post commission paid to a salesperson, after a sale has been completed?

( ) Sales order tab > Commission offset ( ) Sales order tab > Revenue ( ) Sales order tab > Salesperson commission ( ) Sales order tab > Commission

3. To which account in Item groups do you post tax associated with a purchase order, at the point of packing slip update?

( ) Purchase order tab > Packing slip tax ( ) Purchase order tab > Packing slip revenue tax ( ) Purchase order tab > Packing slip purchase ( ) Purchase order tab > Charge

4. To which account in Item groups do you post discounts granted on sales orders?

( ) Sales order tab > Consumption ( ) Sales order tab > Issue ( ) Sales order tab > Discount ( ) Sales order tab > Line discount

5. To which account in Item groups do you post the variance in the amount an item was sold for, compared to the cost of the item at the time that it was returned?

( ) Sales order > Credit note ( ) Sales order tab > Consumption ( ) Purchase order > Stock variation ( ) Inventory > Standard cost profit & Standard cost loss



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6. Which parameter enables items attached to the inventory group to be sold even though there are no physically updated quantities of the item available?

( ) Negative financial inventory ( ) Negative physical inventory ( ) Post physical inventory ( ) Quarantine management

7. What is the name of the inventory model group parameter that together with the Post packing slip in the ledger parameter in Accounts receivable/Accounts payable enables ledger posting at physical update?

( ) Post financial inventory ( ) Post physical inventory ( ) Physical negative inventory ( ) Post packing slip

8. How, in the inventory model group, do you ensure that all items attached to this group have their receipts registered at the company?

( ) Select Picking requirements ( ) Select Post physical purchase ( ) Select Registration requirements ( ) Select Quarantine management

9. Which of the following is not an item dimension?

( ) Configuration ( ) Color ( ) Batch ( ) Size

10. Which parameter must you select for a dimension to ensure that average cost prices are calculated for each dimension value when you run inventory closing?

( ) Financial inventory ( ) Physical inventory ( ) Primary stocking ( ) Coverage plan by dimension



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11. Which of the following is not true about inventory dimensions?

( ) You can create combinations of item dimensions. ( ) You can lock dimensions for editing on purchase and sales order lines. ( ) Serial numbers are always unique. ( ) If a dimension in a dimension group has Primary stocking selected, you

must specify the dimension value before physical updates are made for items attached to the group.

12. Which item setting can be translated into other languages to appear, for example, on external documents in its translated form?

( ) Item number ( ) Search name ( ) Item name ( ) Company item

13. When you specify the cost for an item, in which field do you specify the quantity for which the cost applies?

( ) Multiple ( ) Price unit ( ) Price number ( ) Price quantity

14. Which setting in Items ensures that only one specific warehouse is used for purchase, storage, or sale orders or all three?

( ) Stopped ( ) Mandatory ( ) Locked ( ) Closed



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Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this chapter:

1.

2.

3.



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Solutions Test Your Knowledge

1. To which account in Item groups do you post costs associated with a sales order, at the point of packing slip update?

( ) Sales order tab > Packing slip revenue ( ) Purchase order tab > Packing slip ( ) Sales order tab > Revenue (•) Sales order tab > Packing slip

2. To which account in Item groups do you post commission paid to a salesperson, after a sale has been completed?

( ) Sales order tab > Commission offset ( ) Sales order tab > Revenue ( ) Sales order tab > Salesperson commission (•) Sales order tab > Commission

3. To which account in Item groups do you post tax associated with a purchase order, at the point of packing slip update?

(•) Purchase order tab > Packing slip tax ( ) Purchase order tab > Packing slip revenue tax ( ) Purchase order tab > Packing slip purchase ( ) Purchase order tab > Charge

4. To which account in Item groups do you post discounts granted on sales orders?

( ) Sales order tab > Consumption ( ) Sales order tab > Issue (•) Sales order tab > Discount ( ) Sales order tab > Line discount

5. To which account in Item groups do you post the variance in the amount an item was sold for, compared to the cost of the item at the time that it was returned?

( ) Sales order > Credit note (•) Sales order tab > Consumption ( ) Purchase order > Stock variation ( ) Inventory > Standard cost profit & Standard cost loss



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6. Which parameter enables items attached to the inventory group to be sold even though there are no physically updated quantities of the item available?

( ) Negative financial inventory (•) Negative physical inventory ( ) Post physical inventory ( ) Quarantine management

7. What is the name of the inventory model group parameter that together with the Post packing slip in the ledger parameter in Accounts receivable/Accounts payable enables ledger posting at physical update?

( ) Post financial inventory (•) Post physical inventory ( ) Physical negative inventory ( ) Post packing slip

8. How, in the inventory model group, do you ensure that all items attached to this group have their receipts registered at the company?

( ) Select Picking requirements ( ) Select Post physical purchase (•) Select Registration requirements ( ) Select Quarantine management

9. Which of the following is not an item dimension?

( ) Configuration ( ) Color (•) Batch ( ) Size

10. Which parameter must you select for a dimension to ensure that average cost prices are calculated for each dimension value when you run inventory closing?

(•) Financial inventory ( ) Physical inventory ( ) Primary stocking ( ) Coverage plan by dimension



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11. Which of the following is not true about inventory dimensions?

( ) You can create combinations of item dimensions. ( ) You can lock dimensions for editing on purchase and sales order lines. (•) Serial numbers are always unique. ( ) If a dimension in a dimension group has Primary stocking selected, you

must specify the dimension value before physical updates are made for items attached to the group.

12. Which item setting can be translated into other languages to appear, for example, on external documents in its translated form?

( ) Item number ( ) Search name (•) Item name ( ) Company item

13. When you specify the cost for an item, in which field do you specify the quantity for which the cost applies?

( ) Multiple (•) Price unit ( ) Price number ( ) Price quantity

14. Which setting in Items ensures that only one specific warehouse is used for purchase, storage, or sale orders or all three?

( ) Stopped (•) Mandatory ( ) Locked ( ) Closed


Documents

AX2009_ENUS_TL1_02