Inventory Pricing & Cost Calculation¶
This document explains how inventory costs and pricing values are calculated and applied throughout the system.
Cost Calculation Process¶
- Inventory costs are recalculated on a scheduled basis (currently nightly, with near-real-time recalculation planned).
- The system evaluates inventory on hand and works backward through received Purchase Orders to determine actual costs.
- These costs are averaged to calculate the Average Cost.
- From there, the system calculates Sales Cost and Initial Sales Price, applying any configured overrides (Mgmt Cost, Mgmt Sales Cost, Mgmt Initial Sales Price).
- When items are added to Quotes or Jobs, the calculated values and any overrides are saved as a snapshot in time to preserve historical accuracy.
Pricing Snapshots¶
- Once an inventory item is added to a Quote or Job, its pricing values are stored with that line item.
- Future changes to inventory costs or pricing rules do not affect existing Quotes or Jobs.
- This ensures pricing consistency and auditability over time.
Diagram¶
```text
Received POs (actual prices paid)
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v
Work backward through received POs (based on inventory on hand)
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v
Average Cost
| \
| \ (Mgmt Cost override replaces Average Cost)
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v
Sales Cost = (Average Cost or Mgmt Cost) × % + fixed sales cost
| \
| \ (Mgmt Sales Cost override replaces Sales Cost)
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v
Initial Sales Price = (Sales Cost or Mgmt Sales Cost) × minimum markup
| \
| \ (Mgmt Initial Sales Price override replaces Initial Sales Price)
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v
Quote / Job Line Item
(snapshot of costs/prices at time of creation)