From the Maximo Support Desk - Material Cost On Work Order Actuals Tab Appears To Be Calculated Incorrectly For LIFO/FIFO Items

Body

I have heard this observation from several Maximo clients when they are beginning to implement the use of LIFO and FIFO costing methods for inventory.  At first glance, it appears that Maximo LIFO/FIFO functionality is incorrectly using Average Cost instead of either LIFO or FIFO.  The important detail to know is that regardless of any item's Issue Cost Type, Maximo will display and "temporarily" use the AVERAGE value until the transaction is committed.

Problem:
Material Cost On Work Order Actuals Tab Appears To Be Calculated Incorrectly For LIFO/FIFO Items

Cause:
When there is a LIFO/FIFO item with multiple cost and receipt dates, the Unit Cost field on the Work Order Actuals/Materials tab temporarily displays the average issue cost UNTIL the transaction is committed.

Resolution: Save the record; once the LIFO/FIFO item is entered on the Actuals/Materials tab, the Work Order must be saved.  Upon Save, the Unit Cost field value will update and become persistent with the correct LIFO/FIFO cost value.

Example Scenario:

• There is a LIFO/FIFO item in the Storeroom; the Issue Cost Type field of an Inventory item to FIFO
• The Default Bin field of this item is "TEST"
• There is a Current Balance of 5 for this item/bin
• The Unit Cost for this item is $1.00

Adjust the current balance of this item:
-More Actions | Inventory Adjustments | Current Balance
-In the New Balance field enter 10, then click OK
-In the Unit Cost field enter $2.00 and tab out
-Click OK
*Observe that there are now 2 rows in the Inventory LIFO/FIFO Costs section as expected; 5 @ $1.00 and 5 @ $2.00

(the scenario for this would likely be a new receipt of this item at a different cost - the steps above demonstrate the same condition)

Create a Work Order and use this item:
-Verify that the Charge to Store checkbox is selected
-Save and Approve the Work Order

-On the Actuals tab | Materials tab | click the New Row button
-In the Item field enter the FIFO item and tab out
-Enter the Storeroom (for the FIFO item) and tab out
-In the Quantity field enter 3 and tab out
*The Line Cost will populates with $1.50 (average cost); this value appears to be incorrect
because this FIFO item should issue the first 5 at 1.00 and the second 5 at 2.00.

**Save the record - The Unit Cost field value updates to display $1.00, which is the correct, FIFO cost.

Tom Richardson is an IBM Maximo Support Engineer and frequent contributor to the Asset Management Blog community.  For a complete index of links to his articles, visit
Index of articles by Tom Richardson, Support Engineer