Exercise 12: Set up Inventory

Task 1: Configure the Inventory Setup

Scenario

Concerning the processing of inventory-related transactions and the inventory valuation, Contoso’s account manager has expressed the following requirements:

  • The web shop items for computer hardware are numbered separately from other items. They are incremented by 1, starting from the number CHW1000.

  • All items should be always tracked across the different warehouses.

  • Inventory value should be visible in the g/l balance accounts at each invoice/credit memo posting, while interim values are not registered.

  • To improve the inventory value process, negative inventory must be prohibited.

You will perform

  1. Set up and assign number series.

  2. Complete inventory costing setup.

  3. Make location mandatory and prevent negative inventory.

Steps

  1. Set up and assign number series.

    1. Select the Search icon in the top-right corner of the page, enter Inventory Setup, and then choose the related link.

    2. In the Inventory Setup page, go to the Numbering FastTab.

    3. In the Item Nos. field, the value ITEM is already filled in. Click on the Look Up Value button and select + New.

    4. In the opened No. Series List page, fill in the following fields:

      1. In the Code field, enter COMPHW

      2. In the Description field, enter Computer Hardware.

      3. Select the Default Nos. check box.

    5. Click on the Lookup again and Click on View Details. Click the ellipses (…) and then select Lines.

    6. In the opened No. Series Lines page, select + New.

      1. Leave the Starting Date field blank.

      2. In the Starting No. field, enter CHW1000.

      3. In the Increment-by No. field, enter the value 1.

    7. Close the No. Series Lines page.

    8. In the opened No. Series List page, select the number series ITEM.

    9. Click the ellipses (…) and then select Relationships.

    10. In the No. Series Relationships page, select + New.

    11. In the Series Code field, enter COMPHW.

    12. Close the No. Series Relationships page.

    13. Close the No. Series List page by clicking OK.

    14. The number series ITEM remains filled in in the Item Nos. field, in the Inventory Setup page.

  2. Complete inventory costing setup.

    1. In the Inventory Setup page, go to the General FastTab.

    2. Click Show more.

    3. Select the Automatic Cost Posting checkbox.

    4. Deselect the Expected Cost Posting to G/L checkbox.

    5. In the Automatic Cost Adjustment field, leave the Always option selected.

  3. Make location mandatory and prevent negative inventory.

    1. In the Inventory Setup page, go to the General FastTab.

    2. Select the Prevent Negative Inventory checkbox.

    3. In the Location FastTab, select the Location Mandatory checkbox.

Task 2: Create and configure items

Scenario

For the sales of computer hardware items, Contoso has invested in a new warehouse located in Europe. This warehouse contains only computer hardware, and none of the other resale items. No warehouse tasks are required.

Also, in the chart of accounts the inventory value is registered separately on the balance sheet account 10710, and the income statement account 50150.

You need to set up a new inventory posting group COMPHW and make sure the general posting setup is configured correctly.

So far, only a few computer hardware items have been set up. These will be created manually.

Different item features, such as inch, processor, color, will be registered as additional information on the item cards. More specifically the following computer hardware items are created:

You need to set up new item categories and configure the correct attributes.

Then you can manually enter the computer hardware items, using a configuration template.

You will perform

  1. Create a location.

  2. Set up an Inventory Posting Group and complete the Inventory Posting Setup.

  3. Set up Item Categories and Item Attributes.

  4. Create and configure a new item.

Steps

  1. Create a location.

    1. Select the Search icon in the top-right corner of the page, enter Locations, and then choose the related link.

    2. In the Locations page, select +New

    3. In the Location Card page, on the General FastTab, fill in the following fields:

      1. In the Code field, enter EUROP.

      2. In the Name field, enter European warehouse.

    4. On the Warehouse FastTab, leave all the checkboxes deselected.

  2. Set up an Inventory Posting Setup.

    1. Select the Search icon in the top-right corner of the page, enter Inventory Posting Groups, and then choose the related link.

    2. In the Inventory Posting Groups page, select + New.

    3. In the Code field, enter COMPHW.

    4. In the Description field, enter Computer Hardware

    5. Select Setup.

    6. In the opened Inventory Posting Setup page, select + New.

    7. In the opened Inventory Posting Setup Card page, fill in the following fields:

      1. In the Location Code field, enter EUROP.

      2. The Invt. Posting Group Code field is automatically filled in with COMPHW.

      3. In the Inventory Account field, enter 10710.

    8. Close the Inventory Posting Setup Card.

    9. Select the Search icon in the top-right corner of the page, enter General Posting Setup, and then choose the related link.

    10. In the General Posting Setup page, for each combination where the Gen. Prod. Posting Group field contains the value COMPUTERHW, make sure the following fields are filled in:

      1. In the COGS Account field, enter 50150.

      2. In the Inventory Adjmt. Account field, enter 50150.

      3. In the Direct Cost Applied Account field, enter 50150.

      4. In the Overhead Applied Account field, enter 50150.

  3. Set up Item Categories and Item Attributes.

    1. Select the Search icon in the top-right corner of the page, enter Item Categories, and then choose the related link.

    2. In the Item Categories page, select + New.

    3. In the opened Item Category Card page, fill in the following fields:

      1. In the Code field, enter COMPHW.

      2. In the Description field, enter Computer hardware.

      3. In the Attributes section, enter a new line, filling in the following fields:

        1. In the Attribute field, click on the Look Up Value button and click Select from full list.

        2. In the opened Item Attributes page, select the Color attribute.

        3. Click on the Values of Color.

          1. In the opened Item Attributes Values page, click + New.

          2. In the Value field, enter Grey

          3. Close the Item Attributes Value page.

        4. Click OK to close the Item Attributes page.

        5. The new code is automatically filled in in the Attribute field on the item category card.

      4. Close the item category card.

    4. In the Item Categories page, select + New.

    5. In the opened Item Category Card page, fill in the following fields:

      1. In the Code field, enter COMPUTER.

      2. In the Description field, enter Computer.

      3. In the Parent Category field, enter COMPHW.

      4. In the Attributes section, enter a new line, filling in the following fields:

        1. In the Attribute field, click on the Look Up Value button and click + New.

        2. In the opened Item Attributes page, on the new line, fill in the following fields:

          1. In the Name field, enter Processor.

          2. In the Type field, select the Text option.

          3. Make sure the new line is selected.

          4. Click OK to close the page.

        3. The new code is automatically filled in in the Attribute field on the item category card.

      5. Close the item category card.

    6. In the Item Categories page, select + New.

    7. In the opened Item Category Card page, fill in the following fields:

      1. In the Code field, enter MONITOR.

      2. In the Description field, enter Monitor.

      3. In the Parent Category field, enter COMPHW.

      4. In the Attributes section, enter a new line, filling in the following fields:

        1. In the Attribute field, click on the Look Up Value button and click + New.

        2. In the opened Item Attributes page, on the new line, fill in the following fields:

          1. In the Name field, enter Inch.

          2. In the Type field, select the Decimal option.

          3. Make sure the new line is selected.

          4. Click OK to close the page.

        3. The new code is automatically filled in in the Attribute field on the item category card.

      5. Close the item category card.

    8. In the Item Categories page, select + New.

    9. In the opened Item Category Card page, fill in the following fields:

      1. In the Code field, enter ACCESSORIES.

      2. In the Description field, enter Computer accessories.

      3. In the Parent Category field, enter COMPHW.

      4. Close the item category card.

  4. Create an Item template.

    1. Select the Search icon in the top-right corner of the page, enter Item Templates, and then choose the related link.

    2. In the Item Templates page, select + New.

    3. In the Item Template page, fill in the following fields:

      1. In the Code field, enter COMPHW

      2. In the Description field, enter Computer hardware

      3. In the No. Series field, enter COMPHW.

    4. Then go to the Cost & Posting FastTab and fill in the following fields

      1. In the Gen. Prod. Posting Group field, enter COMPUTERHW.

      2. In the Inventory Posting Group field, enter COMPHW.

  5. Close the item template.

  6. Create and configure a new item.

    1. Select the Search for page icon in the top-right corner of the page, enter Items, and then choose the related link.

    2. On the Items page, select New and +New

    3. Select the template Computer hardware and click OK.

    4. A new item card is created with number CHW1000.

    5. On the Item FastTab, fill in the following fields:

      1. In the Description field, enter Computer III 533 MHz.

      2. In the Item Category Code field, enter COMPUTER.

      3. The Base Unit of Measure field is filled in with the default value PCS.

    6. On the Item Attribute FactBox in the right side, select Edit.

      1. For the attribute Color, select the value Black.

      2. For the attribute Processor, enter the value 533 Mhz.

      3. Click OK to close the FactBox.

    7. Close the item card.

    8. On the Items page, select + New.

    9. Select the template Computer hardware and click OK.

    10. A new item card is created with number CHW1001.

    11. On the Item FastTab, fill in the following fields:

      1. In the Description field enter Computer III 600 MHz.

      2. In the Item Category Code field, enter COMPUTER.

      3. The Base Unit of Measure field is filled in with the default value PCS.

    12. On the Item Attribute FactBox, select Edit.

      1. For the attribute Color, select the value Black.

      2. For the attribute Processor, enter the value 600 Mhz.

      3. Click OK to close the FactBox.

    13. Close the item card.

    14. On the Items page, select + New.

    15. Select the template Computer hardware and click OK.

    16. A new item card is created with number CHW1002.

    17. On the Item FastTab, fill in the following fields:

      1. In the Description field, enter 15” 1501 FP Flat Panel.

      2. In the Item Category Code field, enter MONITOR.

      3. The Base Unit of Measure field is filled in with the default value PCS.

    18. On the Item Attribute FactBox, select Edit.

      1. For the attribute Color, select the value Black.

      2. For the attribute Inch, enter the value 15.

      3. Click OK to close the FactBox.

    19. Close the item card.

    20. On the Items page, select + New.

    21. Select the template Computer hardware and click OK.

    22. A new item card is created with number CHW1003.

    23. On the Item FastTab, fill in the following fields:

      1. In the Description field, enter 17” M780 Monitor.

      2. In the Item Category Code field, enter MONITOR.

      3. The Base Unit of Measure field is filled in with the default value PCS.

    24. On the Item Attribute FactBox, select Edit.

      1. For the attribute Color, select the value Black.

      2. For the attribute Inch, enter the value 17.

      3. Click OK to close the FactBox.

    25. Close the item card.

    26. On the Items page, select + New.

    27. Select the template Computer hardware and click OK.

    28. A new item card is created with number CHW1004.

    29. On the Item FastTab, fill in the following fields:

      1. In the Description field, enter Advanced Mouse.

      2. In the Item Category Code field, enter ACCESSORIES.

      3. The Base Unit of Measure field is filled in with the default value PCS.

    30. On the Item Attribute FactBox, select Edit.

      1. For the attribute Color, select the value Grey.

      2. Click OK to close the FactBox.

    31. Close the item card.

    32. On the Items page, select + New.

    33. Select the template Computer hardware and click OK.

    34. A new item card is created with number CHW1005.

    35. On the Item FastTab, fill in the following fields:

      1. In the Description field, enter Quietkey keyboard.

      2. In the Item Category Code field, enter ACCESSORIES.

      3. The Base Unit of Measure field is filled in with the default value PCS.

    36. On the Item Attribute FactBox, select Edit.

      1. For the attribute Color, select the value Grey.

      2. Click OK to close the FactBox.

    37. Close the item card.

    38. On the Items page, select + New.

    39. Select the template Computer hardware and click OK.

    40. A new item card is created with number CHW1006.

    41. On the Item FastTab, fill in the following fields:

      1. In the Description field, enter Speakers.

      2. In the Item Category Code field, enter ACCESSORIES.

      3. The Base Unit of Measure field is filled in with the default value PCS. Change the value to BOX.

    42. On the Item Attribute FactBox, select Edit.

      1. For the attribute Color, select the value White.

      2. Click OK to close the FactBox.

    43. Close the item card.