What is the difference in using LIFO/FIFO versus AVG (=Average) Cost in Maximo 7.5.x?

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I have been in Maximo Support for many years and often the question comes up what does LIFO/FIFO do?

You can define your costs on an item by item basis by changing the cost type in Inventory on that item or a default for your site in the Organization application->Select Action->Inventory Options->Inventory Costs.

In here, you can define what accounting method you want to track so that your costs reflect the standard for that item.

When you do that, the Inventory application displays a different table.

Before LIFO/FIFO was incorporated in Maximo 7.5.x, it would display Inventory Costs. However, now it displays INVLIFOFIFOCOST.

The INVLIFOFIFOCOST will now display what you have paid for every item still in Inventory (the quantity will equal your current balance).

It will also be sorted by default based on the date acquired.

Your accounting method will obviously choose which item would be consumed first, and thus the cost associated with it.

A great example is ITEM 28149 (Stem Packing) for SITE BEDFORD in a demo database .

If you don't have a demo database, IBM has one showing as preview site here:

http://www-01.ibm.com/support/docview.wss?uid=swg21499350

Unlike STD and AVG Cost, you will not be able to have a negative balance and Maximo will need to know what the cost will be to charge accordingly.

In most other ways the rest of Maximo functions the same as it did with the previous methods.

Most users won't need to realize the costing method in order to do their jobs, Maximo will do it all for the users.

If you liked this costing clarification, I'd be grateful if you click the "Like" button at the top of this page :-)