What should you configure?

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A company is implementing Dynamics 365 Supply Chain Management. Inventory is valued through FIFO costing.

The company is preparing for cutover and go-live activities. The accounting manager wants to ensure that on-hand inventory is brought into Dynamics 365 Supply Chain Management at the correct cost.

Item A has the following costing tiers:

• Tier 1: 20 each, $5

• Tier 2: 20 each, $10

• Tier 3: 20 each, $15

You need to configure the item and journals to meet the cutover requirement.

What should you configure? To answer, select the appropriate options in the answer area. NOTE: Each correct selection is worth one point.

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Answer:

Explanation:

Box 1: item model group

Item model groups contain settings that determine how items are controlled and handled on item receipts and issues. They also determine how item consumption is calculated. Select FIFO for this procedure.

Note: FIFO with the Include physical value option

If the Include physical value checkbox is selected for an item on the Item model group page, the system uses both physical and financial receipt transactions to calculate the running average cost price. Where applicable, the system also adjusts the physically updated issue transaction. Inventory close that uses the FIFO inventory model makes settlements only to transactions that are financially updated.

The illustration that follows shows these transactions:

1a. Inventory physical receipt for a quantity of 1 at a cost of USD 10.00 each.

1b. Inventory financial receipt for a quantity of 1 at a cost of USD 10.00 each.

2a. Inventory physical receipt for a quantity of 1 at a cost of USD 20.00 each.

2b. Inventory financial receipt for a quantity of 1 at a cost of USD 22.00 each

Box 2: Counting by tier

Counting journals let you correct the current on-hand inventory that is registered for items or groups of items, and then post the actual physical count, so that you can make the adjustments that are required to reconcile the differences. You can associate counting policies with counting groups to help group items that have various characteristics, so that those items can be included in a counting journal.