IBM Support

Why does an item with the FIFO cost cost an average cost at the time of its consumption?

Technical Blog Post


Abstract

Why does an item with the FIFO cost cost an average cost at the time of its consumption?

Body

When you issue an item with FIFO (or LIFO) cost type,  the Maximo indeed use the average cost into unit cost. This is occurs because Maximo needs to determine the specific unit cost used at the time transactions are created, the cost shown on the screen is the average of all the FIFO costs.
When you save the transaction the actual FIFO (or LIFO) cost will be used. This is especially important in the case where the quantity consumed is greater than the available cost records at a particular cost. In this case, Maximo will write as many unique financial transactions as there are cost records used.
 
See the example bellow:
 
I create a FIFO item:
 
Initial loaded quantity 2 and $0,00
I made a 2nd transaction adding quantity 4 with $90,20

imagem

When I issue this item, I got  $60,13 and it should be $0
imagem

After I click OK, I will check the transactions of this item and there I see that the unit cost was $ 0 and not the $ 60.13 reported at the time of issue

imagem

[{"Business Unit":{"code":"BU005","label":"IoT"}, "Product":{"code":"SSLKT6","label":"Maximo Asset Management"},"Component":"","Platform":[{"code":"PF025","label":"Platform Independent"}],"Version":"","Edition":""}]

UID

ibm11129743